Existing clients of mine have recently been in touch asking how we can help them invest in a more responsible way. By using our PWM Green Matrix Panel I was able to help them do this with their financial planning and investment management needs. In their drive to be more sustainable and being mindful of rising energy costs, they had also purchased solar panels for their home and an electric car. It was from my meetings with these clients that I decided to research the topic in greater detail, to be able to provide further assistance for other clients who may also wish to consider solar panels and an electric car. Here’s a short summary of my journey of discovery so far.
Many households are moving to solar panels both for a sustainable energy solution, and to try and reduce energy costs. Over 3,000 solar systems are currently being installed each week, which is a huge increase from 1,000 a week in July 2020. Most home solar systems are 4kw in size (12 panels), with the average system starting at around £6,500 for a three-bedroom semi-detached house1. You also need to factor in scaffolding costs which can vary from £500 to £1,200. A typical 4kw system will generate about 3,500 kwh a year in most parts of the UK.
Depending on your system and home energy use, you could save between £500 and £700 on energy annually based on a 4kw system and up to £1,500 with battery storage.
Panels can be installed on your home and outbuildings without the need for a south-facing roof because solar technology reacts to daylight, not sunlight. Roof mounted solar installations count as permitted developments and do not need planning consent unless your home is listed. However, ground mounted systems do require planning permission.
You also need to organise a contract with an electricity provider to ensure a suitable price for the solar power generated, and a smart meter to monitor the usage. Solar power for home use is zero rated for VAT.
Solar power batteries
Adding a battery to the system can reduce bills even further and create more value from the solar panel investment. There are many battery options on the market, ranging from £8,000 for a 10kw and up to £10,000 for 13.5kw of storage and a back-up function in the event of a power cut.
Electric cars – the facts
Many people are leasing rather than buying new electric cars as the technology is moving so fast, allowing the flexibility to move to a more advanced car in the future. Fully electric, plugged-in cars can achieve 200 to 300 miles on a full charge, while hybrid cars (combining a battery and petrol or diesel engine) can now achieve 15 to 50 miles on the battery alone.
Motoring and tax
If you have work income and are self-employed or receive a salary, there are some generous allowances to reduce your Income Tax if you drive an electric or hybrid car.
If employed, you can benefit from some very generous benefit in kind rates depending on the value of the car, ranging from 30% for a typical petrol car down to only 2% for an electric car. If you are self-employed, potentially 100% of the cost of the car in the first year can be written off against tax. We would recommend speaking to an accountant to discuss these options in more detail if you are interested.
More articles will follow on this exciting, positive move to sustainable motoring and renewable energy as I continue on my personal journey.
On a firmwide level, we have been on our own sustainable investing journey. We have been leading the conversation with our clients to understand their thoughts on green investment, aspirations for our planet and future generations and helping them understand the opportunities and threats within green investing. Building on our relationship with Asset Risk Consultants and based on extensive research, we launched the PWM Green Matrix, which allows us to construct investment strategies which dovetail with client’s individual sustainable beliefs and requirements.
If you would like further information regarding any of the issues raised, please do get in touch with your usual Partners Wealth Management adviser.
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The contents of the article have been prepared solely for information purposes. The article contains information on financial products and services and such information is designed for and addressed solely to individuals seeking generic industry information. Past performance is no guide to future returns. The above content does not represent a personal recommendation. Taxation depends on your individual circumstances and may be subject to future change.