Should you still invest in Solar? Now the government has reduced FITs.

You have no doubt heard about the reduction in the solar feed in tariffs that have been slashed recently to 50% of the current and existing levels. Many questions are still in the air about whether the new scheme presents a viable option for the thousands of home owners who have still not gotten around to installing solar energy. Will it still be worth it for those who have not made the 12th Decemember 2011 deadline?

What we can be sure of is solar can still save you money, but the payback economics have changed somewhat from before where the payback period may have been shorter. However, solar install prices are likely to get even keener as businesses struggle to remain in business ensuring that some quotes will be exceptional value for money.

We advise all our readers, to do only one thing: Calculate, and Calculate again. You should take as many quotes as possible to ensure that you fully understand the economic position that installation will put you in. By this, you must look at the total payback period – i.e. the period it will take to get your full investment back.

You can annualize this payback time to calculate an effective payback rate. This is rather like saying after e.g. 8 years the system will have paid for itself fully and the system will be generating essentially pure profit for the home-owner. We have seen plenty of double digit payback rates over the years…but we think anything over about 6-7% is still rather good. Where that point of purchase lies is¬†absolutely¬†up to you, but look at other investments to gauge where you think you should be.

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