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Solar PV return on investment

The Feed in Tariff (FIT) for a solar PV system of up to 4kW in size is 41.3pence per kwh produced and this pays for a guaranteed period of 25 years. 

A 2kW system will generate approx 1650kwh annually, creating a FIT of around £680. Added to this figure is any electricity your solar PV system generates but doesn't get used by you within the home. This can be sold back to your Electricity Company via the grid - the proposed minimum price for exporting electricity is 3p per kWh, but this figure may be higher depending upon your provider.

A 2kW solar PV system would require an investment of £9,000 and this is likely to produce 1,650kWh per year. Most electricity is produced during the middle of the day, but, because your family is likely to be out at work/school you'll be using the least amount of electricity yourself. In this scenario, 40-50% of what the system generates may be sold back to the national grid.

Typical example

You use 50% of the output generated by your system, (825kWh), saving you 13.3p per kWh = £109
You sell 50% of the output, 825kWh, paying you 3p per kWh = £25
You get a FIT payment of 41.3p per kWh generated =£681
The total return to you = £815

  • The return on your investment therefore is about 9.05% (better than you'll get at a bank!) 
  • The Feed in Tariff payments are index linked to the RPI, thus keep in line with the inflation rate.
  • The FIT pays for a guaranteed period of 25 years - long after the system has paid for itself
  • If you sell your house within 25 years, you can assign this income stream to the house's value

If you would like to know more about solar panels, or indeed any of the other services we provide, please complete our survey request form or call us on 0844 241 2605.

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