The Solar Trade Association claims new calculations show that investing in solar still attractive for domestic properties despite reductions in the Feed-in Tariff.
It says that for a family installing a 4 kW system in August costing £8,000, the STA Calculator shows the system will have paid for itself within 10 years, with returns of 9.2 per cent over the 20 year life of the Feed-in Tariff.
STA CEO Paul Barwell said: “Our figures show that solar is a no brainer investment. Compared to the returns you can get these days in banks and many other investments, solar provides a very solid and attractive return.
“That is particularly the case if you consider energy bills are rising faster than anyone expected.
“Investors in solar are also helping us to drive an exciting energy revolution, putting power in the hands of everyday people, while saving the planet.”
In a statement the STA said: “The STA Calculator is based on the government’s own projected increases in electricity prices and on established national average yields from solar power.
“In practice electricity prices are rising faster than government is projecting and power yields from solar in some parts of the country are higher.
“Because solar partly replaces the import of electricity from the grid, this is an important part of the returns calculation. In reality electricity prices are rising faster than the government data used in STA’s model predicts.
“This means households will save even more money by switching to solar. Analysis of government statistics by the REA shows that the average annual increase in electricity bills for the period 2005 to 2011 was 6.6 per cent above inflation.
“While the STA Calculator is based on conservative assumptions, using this real-world rate of increase in electricity prices means returns on the example above of a 4 kW system for a family home installed in August, rise from 9.2 per cent to 11.4 per cent, with payback after 9 years.”
Mr Barwell said: “Nobody knows what electricity prices will be in future but we do know they have gone up substantially over the past few years. This trend may well continue as the UK becomes more reliant on importing its energy in an increasingly competitive world.
“Solar gives people the opportunity to take control of their electricity bills and help us move away from damaging fossil-fuel dependence. We believe the smart money is on solar.”