Are solar panels worth it?
The short answer is yes for most homeowners – but not for all.
And if you make these 5 common mistakes when going solar, you’re screwed no matter your situation!
But let’s assume you’ve read our Free Solar Guide and you won’t make those mistakes.
Then, whether solar panels are worth it or not comes down to a couple of things…
Financial Model of a Solar Panel
In the simplest sense, you invest a substantial sum now (a good system normally costs between £10,000 and £19,000 pounds), and then you get a yearly payback for 30 years.
Your returns consist of:
- The money you don’t have to spend buying electricity
- The money you get from selling your surplus electricity
Point 1 is the big driver of your returns.
However, there is also a third factor that will increase your returns.
When you install solar the value of your home increases. Several studies have been made in the UK estimating a 3-14% increase in the value of your home.
Back to point 1…
More and more homeowners are turning to solar as a way of lowering their bills.
In 2023 a total of 189,826 smaller solar systems (up to 50kW) were installed. Which is a new yearly record.
Why the increase?
I think the UK Chief of Solar Energy said it well,
“The reasons behind the extraordinary place of rooftop solar deployment are simple. Power from the grid remains expensive, whereas solar is cheap, paying back in a handful of years in most circumstances. It’s one of the best investments that home and small business owners can make.”
Solar is also one of very few investments you can make as a homeowner that will protect you against rising inflation.
Even if you take out a loan to finance the system.
In the last 10 years, the yearly increase in power prices have been around 7.3%.
If you finance the system with a loan, you will have an asset that increases in price (as the electricity your system generates will be worth more over time).
But the value of the loan doesn’t increase, it actually decreases.
The loan is for a fixed sum, and as you get paid more and more for the electricity generated from your system, it will be easier and easier to pay back the loan.
As part of our solar guide, we have a solar savings calculator that enables you to calculate this price/value dynamic for your own specific situation.
This is one of the best ways to check if solar is suitable for you.
Another reason for the popularity of solar is of course the positive environmental impact.
Solar is one of very few things you can do that is both good for your wallet and the environment.
But solar isn’t for everybody.
Let's talk about when it doesn’t make sense to go solar:
- You don’t have a suitable roof – If your roof’s too small, too old or you have a lot of shade, solar won’t be worth it for you.
- You don’t have the cash – Solar is a big upfront investment. If you don’t have money in the bank (and let’s face it, who does nowdays…) you will have to take out a loan. For most homeowners in the UK, this is a very profitable loan to take. But if you are firmly against taking out debt, this might be a dealbreaker.
- You are short-term focused – Solar isn’t a get-quick-rich scheme but a long-term investment. If you are planning to move within a couple of years, I would advise against going solar. Your property value will increase when going solar, but it’s a tad aggressive to count on that as your major driver of ROI.
If you think solar is right for you, we can help make your solar journey as smooth as possible.
And the first piece of advice is to avoid these critical mistakes!
Because solar can be one of the most worthwhile investments of your life, but only if you have the knowledge to navigate the solar jungle!
