Solar PV makes economic sense

Solar PV (solar electricity) is the most economic, simple and clean renewable energy technology available that can be easily installed into both new builds and existing buildings. Aside from the environmental benefits, there is a measurable and assured return on investment on solar PV.

Energy concerns are ever more pressing for Irish businesses and home owners, and Ireland's economy is one of the most dependent on imported fossil fuel in the world. Besides spiralling fuel prices, the Irish property market has to cope with the new energy ratings system for buildings, and Kyoto fines around the corner.

Solar PV return on investment - in brief

Solar energy systems also have major economic benefits, as you are no longer held to ransom by rising oil and energy prices:

• As a home owner, you reduce your energy costs, improve your home's energy rating and increase the value of your property
• You can also get paid for any surplus electricity that you export to the national grid as part of the Irish renewable energy feed-in tariff (REFIT).
• For engineers, architects and developers, your project becomes green and sustainable, and there are clear benefits in terms of capital and recurrent costs
• For companies and institutions, solar power is an ethical investment and makes sound economic sense

Solar PV return on investment - in detail

In the past, solar panels had a reputation of being expensive, but only because they were seen as a short-term cost. Your solar PV system is a high quality, long life product that makes sound financial sense as a long-term investment.

Because Solar PV is a long-term investment, conventional payback calculations are inappropriate. Here are a couple of points to keep in mind:

Note: Figures are based on a 1.65 kWp system at December 2008 prices, for a 120m2 house, and an annual delivered electricity price inflation of 12.5%. A spreadsheet of the calculations underpinning these figures is available on request - email info@coolpower.ie

• Payback time is instant. The day you put solar PV on your house the value of your house increases by more than the value of the PV.
• Compared to solar thermal (hot water) systems, Cool Power's solar electricity flatpacks offer a 72% greater reduction in CO2 emissions and up to 236% greater annual bill savings.
• When an energy efficient household installs solar PV, monthly electricity bills can be expected to fall by 20 to 36%. A 1.65 kWp system will generate circa 1,650 kWh of electricity annually which will result in savings of between €245 and €263 in year 1.
• These savings will increase every year, as energy costs continue to go up and the electricity produced by your solar PV system remains free. Electricity is expected to increase at 10-15% per year in the foreseeable future. Allowing for this we estimate that your bill savings will have increased to €2470 in year 20.
• Therefore, the average annual saving for the first 20 years will be between €900 and €1000.
• Viewed as a long-term investment, solar PV provides the equivalent of a taxed return on investment of 17.5% to 19% (for people paying the higher rate of tax). This doesn't take into account the increase in property value or any carbon premiums, credits or taxes that may be introduced.
• Solar PV also reduces your carbon footprint every day for the 20+ years life of the system. A 1.65 kWp system reduces your carbon footprint by over 21 tonnes over twenty years.
• Your property's BER (Building Energy Rating) – and hence its value - is improved by the addition of solar PV. Cool Power's Solar PV flatpacks are the most cost effective way to improve BER.
• Solar PV systems are guaranteed for 20 years and can be expected to last for 50 years. They require little or no maintenance so any maintenance costs are unlikely.
• You can continue to invest in your solar PV system simply by adding more panels whenever you want.
• When it comes to selling two identical houses the one with PV will sell first and fetch a higher price.
• Alternatively, if you do move house, you can take your solar PV system with you.

Note: Figures are based on a 1.65 kWp system at December 2008 prices, for a 120m2 house, and an annual delivered electricity price inflation of 12.5%. The spreadsheet of calculations is available on request - email info@coolpower.ie