The Pros and Cons of Solar Energy – is the Algarve sunny enough?

One of the many benefits of owning property in the Algarve is the glorious sunshine that adorns this magnificent Mediterranean haven. With over 300 days of sunlight shining down on us, it is no wonder so many homeowners are taking advantage of this renewable resource to generate energy for personal consumption. And why not? Solar energy is after all a form of renewable energy that offers many environmental and financial benefits.

However, while going solar will make sense for some, it isn’t a perfect fit for everyone. It does depend on your geographic location, roof orientation, and current electricity usage. In this article, we will explore these points, as well as the return on your initial investment, equipment maintenance, benefits and downsides – so that you can make a more informed decision.

What are solar panels?

Solar panels use Photovoltaic (PV) cells which absorb photons from sunlight. This process creates an electric field, and that electricity can be used or stored for later use. Sunlight hits the solar panels and generates a direct current (DC), which is then transformed into an alternating current (AC) by an inverter, so that you can then use it with household appliances.

If you produce more electricity than you need, you can store this in a battery storage unit for later use. If you produce more than you can use and store, the excess will then be exported to the grid so that others can use it.

How much do solar panels cost?

Although the upfront cost of solar panel installation is still quite high, this has dropped significantly in recent years. Also, there are many companies offering financing options with easy to manage payment plans.

The Environmental Fund’s More Sustainable Buildings program announced for 2022, an amount of 45 million euros available to support investments made in equipment capable of making properties more sustainable in terms of energy – such as the installation of solar panels. The program, which is in force until the end of 2022, has added another 15 million to the incentives, bringing this total to 60 million. So, applications can be made where you can benefit from a co-payment of up to 85% of the investment up to a maximum limit of €2500 (excluding VAT) – depending on the project.

In addition to this, tax benefits could also be on the horizon. A proposal for the State Budget for 2022 was submitted and discussed in Parliament at the end of April 2022, for the creation of another category of deductions in the annual tax return (IRS), related to expenses with improving the energy efficiency of homes. The result of this is yet to be announced.

As for the actual cost of solar panels, this varies depending on how many panels you install and which company you go with. Solar panels can last 25 years or longer and on average, you can expect to break even within six to eleven years through utility bill savings.

With EDP Comercial, the installation cost for four panels would be in the region of just over €2300. You would have the option of paying for this in monthly installments of just under €50 over a period of 48 months. EDP estimates that in cases where there is nobody at home during the day and the usage is mostly after 6pm, you would achieve an annual saving of approximately €200 on your electricity costs. Expectation for breakeven would be within approximately 11 years. 

For a scenario where there are people at home during the day, with the same four panels, the annual saving would increase to approximately €250 and you could expect to break even within approximately 9 years.

However, it is always worth shopping around as there are many offers on the market. If we compare SunEnergy’s estimates to the ones provided by EDP above, the numbers are a little more attractive. For the same four panels, the total cost would be approximately €2000 with an annual saving on bills of approximately €430 and a breakeven period of 4.5 years. While these figures sound a lot better, you should bear in mind that they have been calculated on a bi-hourly plan, in which the cost of electricity during the day is higher, thus exponentiating the potential benefits in the phases of the day when you get the most income from your panels.

If you were to take the number of panels up to 330W (12 panels), you could expect prices to start at around €4000 without a battery and €5500 with a battery. These costs would include installation costs.

Maintenance of solar panels

Solar panels require very little maintenance. They are quite durable and can withstand all kinds of weather conditions. Once your solar panels have been installed, you won’t need to give them much thought, apart from occasionally checking if nearby trees aren’t overshadowing them, thus reducing their efficiency.

Where to place solar panels

Typically, solar panels are placed on the roof. However, if your roof isn’t facing the optimum direction (somewhere between south and west), you can opt for a backyard or terrace surface pole mounted installation instead. The main aim is to ensure that your panels receive the maximum sunlight throughout the day. Each panel needs approximately 2m₂ and must not have shadows as this will affect energy production.

If you own a house, it is easier to install a solar energy system as you own the roof, terrace or land in question. However, it is also possible to install solar panels in an apartment, as long as there is adequate space for this, with the correct conditions and where there is 2/3 approval at the condominium assembly.

What are the benefits of having solar panels?

As well as increasing the value of your home, solar power is a proven technology that can also help you save on your electricity bill. Although you are looking at anything from 4.5 years to 11 years before you break even, once this has been achieved, the savings will be substantial. In an age when electricity prices are forever increasing, this is a great investment for the future. Also, while you are waiting to reach the breakeven point, you will receive a financial return for any excess solar energy that you do not consume or store.

For those keen to give something back to the planet, solar panels are a clean, renewable source of energy that can help reduce carbon dioxide and other greenhouse gas emissions and lower your impact on the natural environment, thus reducing your carbon footprint.

What are the downsides of having solar panels?

Apart from the initial investment required, another important factor to consider is that solar panels don’t work at night. This means that you will either have to rely on battery storage or on utility grids for your night-time electricity needs.

In addition to this, there is the issue of how much space they require. If your roof isn’t a suitable location for the panels, either due to the direction it is facing or maybe the type of roof tile making the installation problematic, you will need to find an alternative location. If the solar panels are installed on your roof, in most cases, this is a custom installation which makes moving them to a new location in the future a less likely option.

On an environmental level, as well as there being a lack of recycling options for solar panels, they are also a manufactured product, which means that there is an associated environmental impact. However, it is important to remember that solar is still one of the least-polluting forms of energy generation available.

So, going back to our initial question, yes, the Algarve is indeed sunny enough and a good candidate for solar energy production. Overall, this source of energy is not only growing in popularity, but it also offers a variety of financial and environmental benefits. As with any investment, it is always best to get expert advice before embarking on the installation of solar panels. If you are interested in finding out more about this, feel free to contact our team and we will be only too happy to point you in the right direction.

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