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Is now the best time to buy solar panels?

Solar panel

Although summer is nearly over, now might be the best time to buy solar panels. Will you be rushing out to buy some?

A government scheme, called the Feed-in Tariff, pays owners of solar photovoltaic (PV) panels for each unit of electricity their solar system produces. The rate of the Feed-in Tariff was very generous when it was first launched in 2010, but has since been cut a few times to manage a big uptake of solar PV panels amongst householders.

Once you sign up to the Feed-in Tariff the rate is guaranteed for the next 20 years. This has meant that buying a solar PV system has been a good financial investment for many, with the initial upfront cost likely to be recuperated in about 8-12 years. The remaining years of Feed-in Tariff income are then straight profit.

Should you buy solar panels now?

Three things play a part in why now might be the best time to buy solar panels:

1. Price of solar panels have been coming down

Our survey of solar panel owning Which? members found that while they used to pay on average £11,329 for a solar system back in 2011, those who splashed out this year have paid just £6,750 on average.

Cost of solar PV

2. But at the same time the rate of FiT is dropping

The government’s proposing a big cut to the payments solar panel owners get for generating their own electricity. Currently, the Feed-in Tariff pays 12.92p per kWh for any electricity generated, but the government is proposing to cut this by 87% to 1.63p from January. Those already on the Feed-in tariff though will keep the rate they signed up for.

Nothing has been confirmed yet and this proposal is going through a period of consultation but it feels that whatever the final outcome will be, it’s very likely there will be further cuts to the Feed-in Tariff rate.

3. Prices could go up by 15%

A recent EU ruling is likely to push costs of solar PV systems up by 15%. The EU concluded that the 5% VAT currently charged in the UK for energy-saving materials for housing (including insulation, as well as solar panels) violates the EU’s VAT Directive. So VAT would have to be charged at 20% on solar panels.

The government’s studying the judgement and considering its next steps, so we’ll have to see which way this one will go.

Any change as a result of the ruling wouldn’t be retrospective and wouldn’t affect anyone who had already pre-ordered or prepaid for their solar panels.

So what do you think? Should we rush to buy solar panels before January next year?

Comments
Member

Whilst I am in favour of sensible micro-generation schemes such as PV panels I find it strange that we have strict planning laws that govern the appearance of buildings, including roofs, and then abandon those to allow solar panels to be fitted. The appearance of a building and environment can suffer markedly, as the picture on the Which? Guides – Solar panels – online shows.
Personally I would much rather PV installations were done on a larger scale by local authorities for example where they can be more efficiently installed. On roofs in an industrial estate or open sites with no other potential. Council tax payers might then benefit.

Member

I have been looking at houses recently and realise just how ugly solar panels (PV and water) are. On the other hand, the demand for energy is such that perhaps we just have to put up with the appearance, as we have with TV aerials and satellite dishes. It would be good if new housing and other buildings were built with solar panels fitted and orientated so as to get the maximum benefit from the sun. Surely it must be possible to design solar panels that are more visually acceptable. With existing housing, the opportunity to install solar panels will depend on various factors. I feel they could look less visually intrusive if they were part of a roof rather than bolted on to it.

With solar PV, I don’t think anyone should receive more via the feed-in tariff than what they would pay for the same electricity.

Member

The feed-in tariff was originally introduced by HMG because they would not give grants for solar panels so making the price on a par with electricity prices would null the incentive for installing them . Exactly on par with the governments policy of removing green energy as a means of supplying English Electricity via grants to be removed in April 2016, and substituting nukes.

Member

“how ugly solar panels….”. I agree . We happen to live in an area with strict planning laws, including a village plan. These control the development and alteration of properties and specify the types of materials that can be used, including the colour and material of roof tiles, to preserve the character. But then you can covour your roof with solar panels! Whatever the enery benfits it just makes a nonsense of planning objectives.

I see little point in having individual installations of PV panels when much larger, more economic, installations could be created that would feed into the grid. Plenty of large commercial and industrial roofs available as sites.

Member

One of my friends lives very close to a very rural area that is heavily protected for its wildlife (SAC, SPA, Ramsar and SSSI), which in theory should make it difficult for development. Apparently the rules are being ignored there so I am not surprised that solar panels are appearing in villages. As energy prices rise there will be more demand, so hopefully the appearance of solar panels can be improved.

Member

I should be very pleased if there were no more incentives to install solar panels [such as feed-in tariffs that exceed the normal consumption tariff]. The only people I see who seem to be benefiting from this scheme are those who are wealthy enough to install a lot of solar panels and fortunate enough to have a roof that faces the right way; the “incentive” is paid for by the rest of the population. Installation grants might have been a more equitable way of achieving the micro-generation objective. Perhaps Messrs Miliband and Brown hadn’t thought it through properly.

Member

Some houses near us were built with two large solar water-heating panels on the roof, largely as a marketing initiative I think but the houses were premium-priced accordingly so I hope the owners are finding the extra cost worth while. Although they don’t look too bad – not much different to Velux windows except for their large area – the panels are not exactly integrated into the profile of the roof but just sit on it.

I dislike the arrays of PV panels that many houses have now, especially when, in order to maximise the export potential, they do not maintain a strict rectangular grid but have ‘wings’ at the sides to fit round chimney stacks or dormer windows or to squeeze another one in within the shape of the hipped roof. Panels on bungalows usually look completely out of scale to me but, of course, they often have much larger roofs in order to cover the same area of accommodation.

Member

I wonder if it would be possible to construct a roof of (replaceable) solar PV panels, which might look less visually intrusive than the present designs that look decidedly out of place. That might be an attractive option where a roof is due for replacement anyway.

The only people I know with solar panels have them out of sight at the back of their houses. I have no idea if anyone has solar panels near my home but if they do they are not visible from the road.