With the days getting longer and, hopefully, many hours of uninterrupted sunshine ahead, you may be considering fitting solar panels to your home.
The argument for installing solar panels sounds logical enough: harness the power of the sun to lower your electricity bills, offsetting the cost of installation. Solar panels cost between £4,000 and £7,000, but this will depend on the size of your system, the installer and the quality of the panels. The more electricity your system can generate, the higher the installation cost, but the savings will also be higher in the long term.
However, you need to be aware that many of the financial incentives from the Government, which created a boom in solar panels, no longer exist. In fact, the HMRC recently announced proposals to remove the discounted rate of VAT on energy saving materials, including solar panels and battery storage units, effectively increasing VAT from 5% to the full 20% rate.
Until last month, people generating solar or wind power at home could also receive money by applying to the Government's Feed-in Tariff (FIT) scheme. The FIT consisted of two payments from energy suppliers: a fixed amount for every kilowatt hour of electricity generated and an export payment for any extra units sent back to the energy supplier. This scheme is still in operation, but is closed to new entrants.
The Government has proposed a new system called the Smart Export Guarantee, but this will only continue the export payments.
Meanwhile, the Labour Party announced ambitious plans to kickstart a green energy revolution in the UK, by proposing to fit a million rooftop solar panels providing free energy for social and low-income homes. Labour estimates that households would save an average of £117 a year on electricity bills.
Labour said its policy could create 16,900 jobs and save 7.1 million tonnes of CO2, equivalent to taking four million cars off the roads. The party predicts that the unused electricity sold onto the National Grid would give local authorities a £66 million boost.
Obviously, the Labour proposal is only an idea and does nothing to help private homeowners.
In conclusion, although the cost of solar panels has dropped in recent years, so have the tax breaks and grants. This means you really do need to do your sums to see if they economic sense for your home and personal situation. If you do decide to go ahead, obtain a range of quotes from solar installers to ensure you get the best price and the correct equipment for your home.
If you are intending to become a buy-to-let landlord, you can request a free, no obligation chat with Knight Property Management. Call us today on 01992 308181.
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