In the article below we look at whether solar PV increases the value of the home and some of the factors at play.
DOES SOLAR PV REALLY INCREASE THE VALUE OF MY HOME?
Solar PV is still a very attractive option for many homeowners. Despite the fall in the feed-in tariff, the price of solar panels has dramatically fallen too, so you can now get a large 4kW solar PV system installed for just lb6,000 - back in 2010 the same system may well of cost double that.
To be honest, provided you get it installed by a MCS installer and you can claim the FIT payments then the payback is just 8 years and then you will receive a return of lb800 (based on a 3.5kW system) for another 12 years after that (so 20 years in total). So from a pure investment point of view - the solar PV is surely a shrewd one.
EFFECT OF THE FEED-IN TARIFF ON VALUE OF YOUR HOME
One thing that people don't tend to take into account is the effect of solar PV on the value of their property. Now the feed-in tariff payments go to the resident of the home (or the investment company when you consider the solar rent a roof schemes). This means that that you will get a physical financial return for 20 years after installing the payments. If you sell your house 2 years after you have paid for the solar PV installation then the new residents will take over this payments - they will have bought a cash generating asset when they bought the house. This should therefore help increase the value of the house, although the extent to which it does depends on when the new residents moved in. Obviously the sooner you sell the property having invested in the solar panels, the more the install is worth to the new owner.
The distance you are through the Feed-in tariff therefore has a huge impact on the value of your solar PV system and the value of the house as a whole when you come to sell it on. This doesn't even take into account the savings produced on you energy bills since you can use the electricity you produce meaning you don't need to buy it from the grid at a cost of 15 per kWh.
WHEN DID YOU GET THE SOLAR SYSTEM INSTALLED?
Not only does the distance through the feed-in tariff play a large part on the value that the solar system adds to your home - the year the solar system was installed also impacts this.
The reason for this is the feed-in tariff payments have reduced over time, so in October 2011, the amount paid for each unit of electricity produced from the solar system was 43.3p / kWh. Now (January 15) the rates are just 13.88p / kWh. In addition the payment used to be made for a total term of 25 years. Now the feed-in tariff is just paid over 20 years.
This means that if the solar system was installed prior to October 2011, then the value of the system (and therefore the impact it will have on the value of the house as a whole) is much higher.
WAS THE SYSTEM INSTALLED WITH ONE INVERTER OR MICRO INVERTERS?
When the solar industry took off (about the same time the feed in tariff was introduced coincidentally!), most solar PV systems were installed with one string inverter.
There are several issues with these string inverters - including efficiency of the system; basically each panel would operate at the level of the worst operating panel. The issue here though is that the high voltages going through these inverters mean they don't last too long - in fact they last about 10 years. Therefore they need to be replaced at a cost of about lb1,000.
> STRING INVERTERS VERSUS MICRO INVERTERS
