At SolarLinker, we write extensively about all the money you can save and earn by installing photovoltaic (PV) panels on your home. These are easy, tangible numbers to understand.
However, solar is ultimately an investment.
- Yes – you can use free sunshine to reduce your utility bills
- Yes – solar can also put money in the bank year after year
Still, installing panels only makes sense if what you get back in return exceeds what you put in. We find it best to treat solar energy almost like traditional investments such as stocks or pension funds.
Why almost?
Because solar energy is unlike any other investment vehicle you’ve ever encountered before. It stands apart for 2 important reasons:
Solar Consistently Delivers Higher Returns
From 2005 to 2014, Wall Street’s S&P 500 offered average returns of 9.37%. Between 2002 and 2012, UK pension funds averaged 8.3%.
By contrast, a standard 4 kW solar PV installation offers an average return of 10.2% across the United Kingdom.
Solar Energy Is a Risk-Free Investment
Pensions and stocks can have stellar years. However, they can also have terrible ones. During the 2008 financial crisis, UK pension funds offered a weighted average return of -13.6% (that’s a negative).
There are some lucky individuals who managed to outperform the market. By definition, however, most people won’t. Equity is risky by nature. In order for some to win, others must lose.
Solar works differently.
It delivers consistent and reliable returns for a minimum of 20 years (backed by the government and by the manufacturer’s warranty). Better still, your solar installation will likely last many decades longer if you use high quality parts installed by a certified professional.
We’re talking about decades of measurable and guaranteed solar returns – with absolutely zero losers (except fossil fuel companies).
Pretty impressive, right?
Numbers like these explain why UK Energy Minister, Greg Barker, believes that:
“Anyone considering retiring should seriously consider whether solar panels are right for them, because in some circumstances, they will get a higher return than from putting the money into an annuity.”
However, these attractive numbers only capture part of the picture.
Going solar offers another type of return on investment in the form of property value increases. Solar-ready homes can receive boosts as high as £16,000, which is considerably more than the upfront cost of installing PV panels.
It really is a no-brainer.
There are thousands of investments out there you can try. Risk-seekers often turn to the stock market. Real estate is a little safer as long as there isn’t a global economic crisis. The truly risk-averse might bet on education. However, even this traditional standby can disappoint (just ask the 40% of graduates who don’t have jobs 6 months after leaving university).
Solar doesn’t suffer from any of these dangers.
It’s an investment that offers financial and environmental dividends for decades – guaranteed. To better understand how solar energy savings, earnings, and payback periods work, read our in-depth guide on Solar Economics in the UK.
If you’re ready to begin exploring your solar PV options, request 3 free quotes today!