Solar panel prices continued their price drop in October and have dropped nearly two-thirds in price since early 2011. A 4kWp system (16 solar panels) that used to cost £15.000 is currently available from £5.400. On a South-facing roof in these panels will pay back about £1.000 per year, which is a return of 19%. Due to these price drops, solar panels still provide an excellent return despite the Feed-in-Tariff subsidy cuts.
Solar Panel Price Index: from £15.000 towards £5.400 and below
Our price index for solar panels (incl. VAT and installation) is currently 65% lower than early 2011. Our expectation is that prices will stabilize around £5.500 due to consumer demand picking up after the Feed-in-tariff cuts. Only a few installers are currently offering these low prices (lowest prices are at £5.000), but the experience learns that once a lower price point is set, the rest of the market will follow. Some actual examples of low prices are:
Scotland solar panels: £5.850 for 4kWp (Energy & Management UK)
Manchester solar panels: £5.410 for 4kWp (CTS Renewables)
Kent solar panels: £5.700 for 4kWp (South Eastern Solar)
Bristol solar panels: £5.000 for 3.8kWp (Your Power UK)
Year One Return: Still excellent after many Feed-in-Tariff cuts
On a South-facing roof in e.g. Exeter a 4kWp system will produce around 4.000 kWh per year. This will provide a year one return of around £1.000 (based on 15.44 pence FiT and 50% of electricity exported), which is around 19% on the best available solar panel prices (around £5.400), as shown in the second graph. The current financial return is better than most months during higher Feed-in-Tariff rates due to the strong price drops of solar panels. We expect the solar panel return to stabilize in the next few months due to fewer prices cuts from solar installers.