You'll have probably heard on the news the announcement that the Ofgem energy price cap has been lowered once again, going from 24.5p per kWh to 22.36p per kWh, but does this mean energy prices are going to continue to go down and what does this mean for those considering an investment in solar panels?
The most important point is that solar is still a great investment. The 2.1p drop in the standard unit of electricity, while it will impact the gains from solar, does not wipe them out. Even if it were here to stay, which it likely won't be, our current estimates suggest that you can still recoup your investment inside of ten years.
Energy prices are likely to rise again come winter, as predicted by the majority of forecasts. The outlook is in fact quite gloomy, with the forecast price rises in October expected to wipe out the decreases in price earlier in the year. This is an important consideration for those looking to install solar in the short or medium term, as with the DNO lead time being as long as three months, it is likely that any solar system that is signed off now will become operational around the end of summer. Reaching out about solar today is likely to mean you'll be taking advantage of the cheaper electricity come the increase in prices next quarter. Additionally, the price of install in the solar market is low at the moment, as the market contracts following the gold rush in 2022 - so now's a great time to reach out and talk about solar.
There is always an element of risk when relying on the market, no-one knows for sure what will happen to energy prices, and geopolitical events can have a huge impact and cause prices to spike at relatively short notice, as the 2022 invasion of Ukraine and resulting sanctions on Russia demonstrated. Ofgem's price cap is designed to protect the UK consumer from such shocks, but generally only delays the impact. With solar, you are locking in cheap energy for the next 25-30 years, and this can give you peace of mind whatever the geopolitical situation and wholesale energy price.
Overall, an investment in solar is a long term investment that shouldn't rely on the quarter to quarter fluctuations in energy prices. You're harvesting the power of the sun for up to 30 years, and who knows what the state of play will be in the energy markets even five years from now let alone 10 years to 20 years. Investing in solar locks in cheap energy and insulates you from the mercurial nature of wholesale energy prices, how much money you will be saving may very year to year, but with energy inflation averaging around 5.4% since 1990, what's certain is that you will save, and save big. Why not get in contact for a free quote and financial analysis today by filling out our online form, giving us a call, or emailing info@spiritenergy.co.uk - our team of experts will be happy to answer any questions you have.