Engel & Völkers Licence Partner Hondarribia and Irun > Blog > 5 compelling reasons to invest in solar energy

5 compelling reasons to invest in solar energy

The sun is an unbeatable source of renewable energy, providing the Earth with more energy in a single hour than the world's population uses in one year. If you’re looking for ways to boost sustainability in your home, solar panels make sense. But are they a good financial investment? Here are five compelling reasons to consider them.

 Hondarribia, Spain
- 5 compelling reasons to invest in solar energy

1. Free electricity

If you look at your solar power system as a financial product, you could expect it to generate annual returns ranging from 10 to 30 percent or more over time. While this may vary depending on your country’s incentives and tax rebates, on average it’s estimated that a solar power investment is paid off within eight years by providing free electricity and cutting energy bills. Today’s solar panels last for upwards of 25 years, with few associated maintenance costs, automatically generating savings for more than two decades.

2. Consistent increases in ROI

The cost of electricity varies regionally, with residents of Germany and Denmark paying the highest fees at 35 US cents/kWh and 41 US cents/kWh respectively. Yet no matter which country you reside in, the cost increases each year. This means that your annual return on investment rises accordingly, as you save money on these higher energy costs well into the future.

3. Tax incentives and rebates

A third reason to invest in solar energy is for tax rebates or other government incentives. In the USA, a federal investment tax credit was in effect until 2016, allowing individuals to apply 30 percent of a solar panel investment cost towards their income tax bill. This now varies by state, with many offering rebates or deductions.

4. Potential income from feed-in tariffs

If your residence generates more electricity than it needs, you can sell the excess back to the grid and make money with feed-in tariffs. Many countries – from China to Australia – take part in this type of scheme to encourage residents to invest in solar energy. In the UK, contracts roll for 20 years, offering a price per kilowatt hour of energy linked to the Retail Prices Index measure of inflation.

5. Increased property values

A final factor to consider is how your solar panel investment will impact your property’s value. Buyers are increasingly interested in eco-friendly homes and the increased efficiency with a pre-installed solar panel system is an added bonus. This type of renewable energy investment can boost property values, particularly if you install aesthetically pleasing solar shingles designed to blend in with your roof’s existing slates.

As you can see, there are plenty of factors that determine whether or not you should invest in solar energy. Your household’s existing energy use, geographical placement and local incentives should all be taken into account when calculating your potential ROI. Yet as electricity prices climb and the cost of solar panel installation falls, a renewable energy investment is increasingly looking like a smart choice.

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