It’s been a while since my last solar panels blog post…oops.
So in the last post, I went through my own experience of buying solar panels and how they formed part of a 20 year investment. But could the same (or similar) sustainable investment be made in 2020?
Now that the government Feed in Tariff has been scrapped, can it still turn a profit? While the government did scrap the Feed in Tariff, they have introduced a “Smart Export Guarantee”. This is essentially a replacement for the export tariff section of the Feed in Tariff.
With this guarantee, suppliers will have to pay you for exported power from your solar panels.
How it works?
Let’s get something out of the way before we start, this will only be valid for solar panels that aren’t taking advantage of the Feed in Tariff. So this means panels installed after 1st April 2019 will be eligible for this scheme.
The scheme works by providing a guaranteed payment for each Kilowatt hour (kWh) of energy exported. However, the scheme only stipulates that companies provide a ‘non- zero’ payment for exported energy. Unfortunately, this does mean many companies provide as little as 0.5p/kWh. The highest I could find at the time of writing was 5.6p/kWh.
Exports can be measured using a smart meter generation, which can be installed for free. This means you’ll need to have a smart meter or extra equipment to be eligible. For this scenario let’s assume the export is 50% of the generated energy.
Many providers have caveats with regards to who is eligible, such as being a customer on one of their import tariffs. In addition, if you install a solar battery alongside, you can save on your bill. However, only certain providers will pay for energy exported from the battery, so it’s worth taking this into account.
Luckily someone else has done all the work on who has the best SEG rates. Less work for me! To see a table of the best rates and some of those caveats take a look at the Solar Trade export league table.
Let’s do the maths!
To make a comparison with my own solar array and the numbers from the last post, let’s start with some assumptions:
- The solar array will be the same as my own at 3.5kW
- We’ll use the average yearly energy generation from my array – 3.3MWh
- Potential gains over 20 years
- The best price for the same or similar solar panel types ~£4,800 including the 5% VAT
- The same average savings on bills of £150 a year
- A solar array installation only, no batteries
Using the highest price available of 5.6p/kWh, the annual export payments are:
£0.056 x 3300kWh = £184.80
Export payment – £184.80
Average annual saving on bill – £150
= £334.80 x 20 years = £6,696
So over a 20 year period, you will make gains of £1,896.
Still worth it?
Technically yes, you will likely gain in the long term. You could even strengthen these gains with a cheap solar battery installed.
However, you’re not going to see similar gains, when compared to a solar array with the Feed in Tariff. Those crazy days of 48p/kWh of generated energy are long gone. But with the cost of solar panels having dropped by 70% in 10 years, it’s certainly still financially viable.
Finally, a moment of gravity. I’ve only talked about the financial gains to be had from solar panels. However, the societal losses we will have from inaction over climate change cannot be ignored. Actions are facilitated with governmental policies like these; and those in the know can utilise them, to help their wallets and everyone’s futures.