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Solar Panels for Stellar Returns and Retirement!Reports Mark Hoskin, 23rd April 2010On April 1st the UK introduced Feed in Tariffs for "micro-generation" systems, such as solar photo voltaic panels under 5MW. This may mean little if you are not an expert in government policy, but it actually could be the best investment you make this year if you have a south facing roof and a spare £12,000 to £17,000 to invest. It may sound unbelievable, but if you put solar panels on the roof of your house with a capacity under 4kW, which is likely to be as large a unit as you could achieve on a residential roof (4kW is likely to take up a space of 9m by 2.4m) by 31st March 2012, then for a contract period of 25 years, for every kWhr you produce you will be paid by an electricity company 41.3p, guaranteed by the UK government. For roofs facing the right way and not shaded the returns can be in the 7% range and if it is your roof, it is tax free income! But that is not all - All the electricity produced from the unit is yours and you don't pay for it, plus if you export any of it to the grid, you will be paid an extra 3p per kwhr, which could add to the returns. And to top it off, anecdotal evidence suggests that electricity companies have decided it is too costly to work out how much of the electricity you produce is exported and so currently are assuming that 50% of the electricity is used and 50% exported. But again that is not all! - While you can expect the solar panels to degrade, reducing the electricity output each year by approximately 0.32%, the tariff paid for the electricity produced goes up each year with inflation (measured by the retail price index). And the tariff may only be in place for 25 years, but the panels are likely to last for 40. So, in short, solar on your roof could equate to 7% tax free income in year 1, rising with inflation over 25 years, together with free electricity for 40 years. Is there a better way to invest, or to enter retirement?
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