Does the money you save take into account inflation?
Also - what happens if your solar panels break down. Will the company fix them? And if so - what happens if the company is bust 5/10 years from now?
My brother runs a company which installs solar panels (and other renewable energy products) and he doesn't have solar panels installed on his house. And he hasn't encouraged his family to get them installed either.
Also - the government cut the feed-in-tarriff a year ago. So - the deal you are getting now won't be as good as it was a year ago.
And I am not sure how feed-in-tarriffs work. Do you get locked into an agreed amount of savings? Or does the government have the right to reduce it (or cancel it) whenever they want? I suspect it is the latter - but I am not sure. As such - your future savings could be at the mercy of any futue decisions made by the government.
You have to remember that the wind (pardon the pun) is blowing against renewable energy. There is a serious chance of black-outs in the next 2-4 years - since the UK has closed too many traditional power stations in the name of helping the environment (completely pointless - since the exact same power stations will just be transported to the third world where there are even fewer environmental regulations).
And the rising cost of electrictiy bills is a growing issue in politics (Ed Milliband 'won' the recent party conference season by campaigning on this). And the feed-in-tarriff is paid for by a top-up in everybody else's electricity bills. So - I can easily imagine it coming under further scrutiny in the future.
Personally - I am sceptical about this sort of thing. Once you have your money tied up in this - you can't get it out. Whereas if you spent the money on shares (or other investments) - you can easily withdraw it any time you want.
The money is just an investment - and you have to ask yourself if the risk/reward is worth it when you take into account the potential future pitfalls.
You say the money is index-linked at 2.5%. Well - I am guessing that means the money will rise by 2.5% each year - to take into account inflation.
Well - the government's target for inflation is 2% (with a variation between 1-3% being deemed acceptable). If you study the charts - you will see that inflation has been above 2.5% for most of the UK's history:
http://www.bankofengland.co.uk/education...chart.aspx
And the important point is that Britain currently has record low interest rates, and is currently printing money to prop up the economy. As such - we could be in line for much higher inflation as Britain takes the unofficial policy of trying to inflate away our national debt.
One other thing. We are (hopefully) about to enter a revolution in Britain's energy supply - as we undergo the shale gas fracking revolution. In recent years - this technology has lead to gas prices halving in America. Similarly it is hoped that the same will happen in the UK. One hopes if this happens that it will bring pressure to help force down the price of electricity as well.
So - as you can tell - my gut instinct is to be sceptical of this. Whenever the government organises projects which will pay off decades in the future - I am very sceptical. Since within 5-8 years - the very people responsible for such projects have long since moved on from those positions of power. And it is often in the interests of those who take over to sabotage any schemes left behind so as to show that they were hare-brained ideas in the first place.
Imagine how much of a shit politicians of today would give to promises made by opposition parties back in 2003 or 1993?
I could go on further here. But I think it is telling that alot of the people selling these products (such as my brother) are not actually choosing to install it in their own properties. And on a side note - alot of the claims made about the power generated by solar power - do not live up to reality. The numbers produced in a laboratory - often depend on solar panels being in excellent working order - and having access to direct sunlight.
How are such numbers calculated? Do they assume the sun shines 24 hours a day? Do they assume the sun shines all year round? These are obvious questions - but one thing that isn't so obvious, is that any shadows that are cast on to your solar panels can badly affect the figures as well (this is more common that you might think since the sun moves during the day - as such shadows can pop up at certain times of the day depending on the location of nearby trees and so on).
To finish. The people selling these equipment often don't have it installed in their own property. And the people who do buy these equipment, are often schools (who want a nice story for the school newspaper) or companies that want to burnish their green image. And middle-class folks who care passionately about the environment.
With that in mind - the demand is not largely drived by those who think this is a sure-fire way of saving enough money to make the investment worthwhile. Which is odd - since if that were the case, there would be no logical reason why everyone in the country wouldn't be clamoring for solar panels.
That is the way I feel about this. But I am no expert. A good place to hear people discuss these issues is on the (excellent) moneysavingexpert site.
http://www.moneysavingexpert.com/utiliti..._content=1
And here is an example of the sort of intelligent discussions on this issue you will find on the moneysavingexpert forum:
http://forums.moneysavingexpert.com/show...599&page=1
The above is just my opinions. I am going on my own take here - which means I may be totally wrong in some way. Or it means I may be coming to some intelligent conclusions which others have overlooked. Hopefully it is the latter.
