Why you shouldn’t consider solar panels UNLESS you want to prepare for possible future
power outages. If you do, then fine -
How so?
Let’s say that you want a solar panel array for your home. A typical solar array will cost just short of £10,000. It proposes to provide you with free energy to the extent that you will retrieve your capital expenditure (the amount you initially pay out) within a few years (spoiler alert: you won’t). To do this effectively, you will need batteries to store the energy when you can’t use the power provided. This is the difference between a £6,000 solar panel system and a £10,000 one. Battery storage is what is being promoted as the way to go. Let’s look at the figures for a typical system with batteries...
Purchase cost of a TYPICAL 3kW system with batteries £10,000
Generates 2,500 kW a year. At 21p per kWh that is a saving per year of £525
Put that away in a bank and you’ll get interest of around 3% £16
A yearly total then of £541
So it LOOKS LIKE you will see a return of your £10,000 after about 15 years (£10,000 divided by £541 = circa 15). This is called the ‘payback period’ and it’s the biggest lie told in the solar panel trade. You will see it everywhere. However, sadly it is totally untrue. Remember, you had that £10,000 in a bank account…
Minus loss of interest (on the £10,000 you had in an account @ 3%/year) £300
This means that you have to DEDUCT the interest that you are losing. So we’re actually down to an annual saving of just £241
Minus the yearly cost of maintenance & repairs which is £4,000 over the 25 years £160
This means a ‘profit’ of £81
…every year. So, after 15 years, you have accumulated £1,215
Unfortunately, after 15 years, a new inverter and battery will be required £9,900
This means that over the 25 year period of owning your solar panels, you will have LOST £8,685…which is £579 a year. This loss accumulates, so by the time your panels are knackered (around 25 years, and definitely NOT the 35 years shown in the above advertising lie!) you’ve lost a considerable sum of money. The panels also degrade, so with every year that passes, your panels generate less electricity.
[The data is from Contact Solar, a company selling and installing solar panel arrays. Interest for savings has been assumed at 3%. The cost of a new inverter and battery pack has had inflation added. Inverter and batteries could fail twice during the ownership period of 25 years! Electricity cost of 21p per kilowatt hour – as of July 2024. The more the cost of electricity falls, the worse the figures are.]