Solar - A tax free energy solution?

The Government's feed in tariff (FIT) scheme has been far more successful than expected, with around 176,000 photovoltaic (solar PV) installations between April 2010 and February 2012.

It means a tax free, index linked return on investment of up to 10% - even at its lower 21pkWh tariff rate. Solar PV also increases the value of your house, and can half your energy bill. With energy prices rising with no sign of stopping, Solar PV is increasingly being described as the way forward.

Yearly Profit
Solar PV systems cost somewhere between £5,000 and £10,000 depending on size. Larger systems have more capacity for generating power, which means more profit. The main profit comes from the energy you produce, not the energy you sell back to the grid. On a 3kW system, at the 21pkW rate, you can expect to make around £670 per year, which accumulates significantly over the PV panels' expected lifespan of 30 years.

That is just energy production. In addition you can expect to cut your energy bills by around £100 per year - and by even more if you are often at home during the day.

The feed in tariff (FIT) scheme is attractive because it is contractual and the rates are tied-in. Given that the variables most likely to change are energy prices and inflation, an energy deal that is tax free and index-linked has clear benefits.

Reliable Metrics
Solar companies can reliably gauge how effective and profitable a solar PV system will be, based on the tilt of the panels, sunlight hours and the amount of shading. Their metrics can provide you with estimated earnings per year, and information on the deployment of your panels.

The UK solar industry has been going for around 30 years, and the best solar PV companies will have significant trading history and be MCS accredited.

PV Panels – Key Facts

• Solar PV panels take energy from sunlight not temperature, so a UK climate is perfect - we might not have the warmest temperatures but we do have a reliable annual number of sunlight hours. South-facing rooftops are best.

• A solar PV system is roughly the size of two saloon cars per 1kW. So a 3kW PV system will need roofspace of around 24 square metres.

• Solar PV panels are 'fit and forget', and only take a couple of days to be up and running. They do not require cleaning and the only moving part is the inverter. There is almost no upkeep required.

How to think about Solar PV?
Solar PV is an investment with a brilliant rate of return and almost no maintenance costs. It is not a way to make a quick buck, but a way to make a small fortune over time. PV panels are designed to last around 30 years – the longer term of your investment, the more of a return you will see.

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