Is solar heating a better investment than an ISA?

Should you invest in solar heating?  Given the fact that the British summer is often a washout – flaming June rarely lives up to its name and the August Bank Holiday is a fancy name for a wet weekend! – you might be forgiven for thinking that solar heating is fine for Continentals but a no-no for us natives.

But before you dismiss the idea out of hand, it’s worth addressing some of the common misconceptions about solar heating and renewable energy in general.  First of all, solar panels do not depend on direct sunlight to function.  Diffused sunlight (that’s cloudy weather to you) is fine, and is only marginally less efficient for heat collection.

And even taking that into account, year round solar radiation in the UK is a respectable 65% of what they enjoy in Spain.  In real terms that means that solar heating can supply 80% to 90% of your hot water requirements in summer, and even in winter it will meet 20% to 30% of your hot water needs, which represents a significant saving on your fuel bill.

Over the year you can effectively halve your annual heating costs.  And as a bonus you’ll earn money from the Government’s Feed-in-Tariff scheme for producing electricity.

Ah yes, you say, but how long will it take to recoup my investment?  And haven’t the Government recently made cuts on their Feed-in-Tariff scheme?

Well, the first bit of good news is that the cost of installing solar panels has dropped dramatically in recent years.  The other is that once you’ve registered for the Feed-in-Tariff, you’re locked into it for 20 years and will receive your payments at the agreed rate, regardless of any future cuts to the Tariff.  So the sooner you do so the better.

So what do you stand to gain?  Obviously it will vary from property to property and installation to installation, but a typical 4kW system will deliver earnings and savings of around £8,080 over 20 years.  That’s a return on investment of 4.8%, which is probably better than putting your money in an ISA or pension account.  And it’s tax free!

Whilst we’re not recommending an investment in solar heating as your primary source of income, it could prove to be a useful supplement to your savings.  Bear in mind that electricity and gas costs will continue to rise, whereas sunlight is free – and you’ll be doing your bit for the environment into the bargain.

At Harpers we’ve made a bit of a speciality of solar and renewable heating installations.  We’re agents for Worcester’s Green Sky solar heating system, and Nu-Heat, the largest specialist supplier of underfloor heating systems to the UK domestic market.

Come rain or shine, we’re happy to advise on the best system for your needs, and supply a firm quotation, free and without obligation.

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