When it comes to the economics of solar energy, it can be approached in two ways. The one that most people think about, of course, is their own personal finances. You can also think about it in terms of the wider economy though, especially now that the government has got involved with the feed in tariff.
Personal Finance
Solar panels have to be treated as an investment. And with any sort of investment you have to look at two things. How much it costs, and how much money you can expect to get from it, and when. There are two ways of making money here, the savings on energy bills and the feed in tariff.
For most people of course, the most important thing is going to be how much it costs. That's because if it is out of their budget range then the rest of it really doesn't matter. So while precise figures cannot be given, for an average installation it usually costs from 8,000 to 12,000. You might be able to get a loan if you don't have that sort of money though.
So do the savings that you will make make the costs of the installation worth it? It depends on your circumstances, and how much weight you put on the environmental advantages. From a purely financial standpoint though they probably don't, as it can take about 25 years just to get your money back in this way alone, and that's about the life span of solar panels anyway.
Fortunately though you no longer have to only rely on savings. That's because now you will also have the feed in tariff available to you. That's a government scheme which pays out for every kilowatt hour of energy produced by PV solar panels. With that, you'll pay off the costs in about 10 years and then you'll be making money.
The Wider Economy
The main reason that the government gives for introducing the feed in tariff is that it will help the environment by reducing the demand for fossil fuels. That's important, they say, because that is what causes global warming, which must be averted as much as possible. And that's fair enough.
What doesn't make so much sense though is when they say that it will also help the economy. It certainly true that the green economy will be bolstered, as with a greater demand for solar panels there will also need to be a greater supply, so jobs will be created in that sector. However that doesn't mean that the whole economy is going to benefit.
That's because, even though many economists do not recognise this, the government cannot actually improve the economy. This comes down to simple logistics. They get their money by taking it from other people, so it would have been spent in some way in any case. That doesn't just mean that it is all equal though, because the people spend money on what they want, whereas the government spends it on what they think they should want or what the government wants.
There's nothing to stop the government spending money in the same way that people would of course. Of course, for one thing, there is no way of saying what that would be. Also though, if that was their intention then they might as well just leave the whole thing alone.
The whole reason that people get a job to earn money to buy things is to increase their standard of living. If that's what they do when they are left alone then, the government can only cause the opposite of that. That's why the action might be good for the green economy, but it won't be good for the economy as a whole.
Personal Finance
Solar panels have to be treated as an investment. And with any sort of investment you have to look at two things. How much it costs, and how much money you can expect to get from it, and when. There are two ways of making money here, the savings on energy bills and the feed in tariff.
For most people of course, the most important thing is going to be how much it costs. That's because if it is out of their budget range then the rest of it really doesn't matter. So while precise figures cannot be given, for an average installation it usually costs from 8,000 to 12,000. You might be able to get a loan if you don't have that sort of money though.
So do the savings that you will make make the costs of the installation worth it? It depends on your circumstances, and how much weight you put on the environmental advantages. From a purely financial standpoint though they probably don't, as it can take about 25 years just to get your money back in this way alone, and that's about the life span of solar panels anyway.
Fortunately though you no longer have to only rely on savings. That's because now you will also have the feed in tariff available to you. That's a government scheme which pays out for every kilowatt hour of energy produced by PV solar panels. With that, you'll pay off the costs in about 10 years and then you'll be making money.
The Wider Economy
The main reason that the government gives for introducing the feed in tariff is that it will help the environment by reducing the demand for fossil fuels. That's important, they say, because that is what causes global warming, which must be averted as much as possible. And that's fair enough.
What doesn't make so much sense though is when they say that it will also help the economy. It certainly true that the green economy will be bolstered, as with a greater demand for solar panels there will also need to be a greater supply, so jobs will be created in that sector. However that doesn't mean that the whole economy is going to benefit.
That's because, even though many economists do not recognise this, the government cannot actually improve the economy. This comes down to simple logistics. They get their money by taking it from other people, so it would have been spent in some way in any case. That doesn't just mean that it is all equal though, because the people spend money on what they want, whereas the government spends it on what they think they should want or what the government wants.
There's nothing to stop the government spending money in the same way that people would of course. Of course, for one thing, there is no way of saying what that would be. Also though, if that was their intention then they might as well just leave the whole thing alone.
The whole reason that people get a job to earn money to buy things is to increase their standard of living. If that's what they do when they are left alone then, the government can only cause the opposite of that. That's why the action might be good for the green economy, but it won't be good for the economy as a whole.
About the Author:
If you'd be interested in finding out more concerning how you can help in the battle against climate change, discover more by Jacob Cleaves on solar energy at Solar Energy UK.
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