Solar Benefits

Buying solar panels is a long-term investment that should help cut your electricity bills and carbon footprint. But will they pay for themselves and earn you money?

Solar panels are often marketed as a way to save money on electricity, and sometimes as a way to make money too. This is because you can get paid for the electricity they produce that you don’t use.

Of course, many people install solar panels for other primary reasons – such as that they want to use greener energy and be less reliant on the National Grid for their energy supply. But it’s still worth knowing how soon you’ll see a financial return on your investment.

Keep reading to find out how long it’s likely to take to break even if you buy solar panels, and how much you could earn from them.

Put Money in your pocket instead of your utility company’s

Instead of flushing your money down the drain every month paying the utility company, you can now build equity in an asset on your home. With Enerphy Suisse you own the system installed on your home and you get the upside value– not some 3rd party company.

• The system will be custom designed for your home.
• Enerphy Suisse manages all the system permitting required for your city.
• You receive a manufacturer’s warranty and a production guarantee.

How long do solar panels take to pay for themselves?

How long it will take for your solar panels to pay for themselves, and whether you can make money from them, will depend on a range of factors.

• The location, size, angle, orientation, and shading of your roof
• The cost of your solar PV installation
• How much of the electricity generated you are able to use – for example whether you are often home (or at least able to run appliances) during the day
• Whether, and how much, you are paid for electricity exported

A more expensive system upfront will need to be balanced with how much money you can save by using the renewable electricity it generates (instead of buying power from your energy firm), plus how much you can earn from selling any excess.

Below we’ve calculated how much you might expect to save on your bills and earn from selling electricity, and therefore how long it could take for a typical rooftop solar panel system to pay for itself, across the UK.

Your actual fuel bill savings will depend on a number of factors including the size, efficiency, and location of your PV system and how much electricity you use when the system is generating. If your system costs more to install, it could take longer to pay for itself. However, if your system produces more electricity, you could save more on your bills or earn more from SEG payments, meaning it pays for itself quicker.

Calculations are based on a 4kWp system on a south-facing, 30-degree pitched roof with no shading. Occupants are assumed to be at home during the day. Electricity bill savings are based on 28.34 CHF/kWh electricity cost and estimated electricity used from the grid by the Energy Saving Trust’s solar energy calculator. Smart Export Guarantee payments are based on the mean average SEG rate of 4.1 CHF and estimated exported electricity by the Energy Saving Trust’s solar energy calculator. No maintenance or repair costs are included.

You can cut the time your solar system takes to pay for itself by finding the best SEG tariff rate, so you get paid more for electricity you produce, and by maximising how much electricity you use (eg. to run appliances) while the sun is up. Find out how much you could earn with the Smart Export Guarantee.

If the price of electricity continues to rise, the amount you can save also increases, so the payback time will become shorter. That means solar PV could be an even more attractive investment.

The investment potential of solar panels is advertised by some companies, however there are distinct differences from traditional investment options. If you have already received Feed-In Tariff payments, they are secure for 20-25 years, with a yearly adjustment to the kilowatt-hour price based on the Retail Prices Index.

On the other hand, using the Smart Export Guarantee scheme for exporting excess energy from newly installed solar panels offers less security as the variable tariff rates may change. While the fixed tariffs only last for a year, the agreement for the Smart Export Guarantee can be shopped around, but current rates are lower than the retail price of grid electricity, making it more economical to use the generated energy rather than selling it.

Paying for your solar panels

Financing the installation of solar PV panels through your own savings is the most economical option. If you’re unable to pay upfront, a loan or remortgage may be considered, but caution must be taken as loan repayments could surpass the returns from your solar panels.

Interest-free financing options offered by energy suppliers and companies may seem attractive, but the terms and conditions should be thoroughly evaluated as additional work costs may not be covered and it could limit you to a less suitable energy tariff.

Enerphy Suisse offers the ‘Free solar panels and solar buyback’ or ‘rent-a-roof’ scheme as an alternative option for funding solar projects.

How do free solar panel schemes work?

The “rent-a-roof” or “free” solar panel schemes, which were popular a few years ago, enabled companies to benefit from the government’s Feed-in Tariff (FIT) program. We would lease homeowners’ roofs, install and maintain solar panels, and receive payment in exchange for the electricity generated. Homeowners would benefit from free electricity without any upfront costs. However, with the drastic cut in FIT payments in 2016 and its termination in 2019, free solar panel schemes are rare and few and far between, except for some government-supported grants. Nowadays, solar buyback schemes are becoming more prevalent, particularly for those who already have solar panels.

What is solar buyback?

Solar buyback is also referred to as solar equity release, and you may also see offers to ‘sell your feed-in tariff’. That’s essentially what it is: Enerphy Suisse offers a lump sum to householders who already have solar PV installed, in exchange for receiving the remainder of their feed-in tariff. As with free solar panel schemes, we are keen to cash in on the feed-in tariff.

Find out more about the feed-in tariff.

Is there anything else to consider with solar buyback?

Besides comparing your total expected feed-in tariff earnings with the amount offered as solar equity release, consider the following if you’re thinking about signing up:

• Who owns your solar panels during the period in which a company is receiving your feed-in tariff?
• Are you liable to pay for any maintenance and repairs?
• What happens to your solar panels at the end (especially if they have reached the end of their life)?
• How does it affect your ability to renew your mortgage or change mortgage provider? Speak with your mortgage provider to find out.
• Does it affect the value of your home if you plan to sell? Some mortgage lenders are wary when third parties own assets on the property.

Could I make money by selling my feed-in tariff?

A potential to earn as much as CHF 20,000 through solar buyback can be achieved. This is a process where our company pays a lump sum for the remaining feed-in tariff payments of a household that has already installed solar panels. The household can still use the free electricity generated by the panels.

The amount offered is based on various factors, such as the current feed-in tariff rate, the time remaining to receive payments, the size of the solar panel system, and the current energy generation readings. While a large upfront payment is promised, keep in mind that you would have received the feed-in tariff gradually over 20 years as your panels generate energy.

On the other hand, using the Smart Export Guarantee scheme for exporting excess energy from newly installed solar panels offers less security as the variable tariff rates may change. While the fixed tariffs only last for a year, the agreement for the Smart Export Guarantee can be shopped around, but current rates are lower than the retail price of grid electricity, making it more economical to use the generated energy rather than selling it.

Compare the total expected feed-in tariff payments with the upfront payment offered by the solar buyback company before making a decision. Although you may receive the total amount later, waiting is likely to result in a better outcome in the long run, as it would not make sense for the company otherwise.