Leaving aside the politics and legality of the whole thing, what will an Israeli/American attack on Iran mean for the cost of energy in the UK? And how will it affect solar installations?
Even casual news watchers will by now be well aware that the US and Israel have launched a war of aggression against the Iranian people -supported by the UK government- and that in response Iran has announced the closure of the Strait of Hormuz, though which approximately 20% of the world crude oil transits, and have also attacked oil refining facilities in Saudi Arabia. which will have a dramatic effect on global wholesale gas markets. While the UK does not import gas directly from Iran, around 38% of UK electricity is generated from natural gas, so a blockade of the Straits of Hormuz, or even a disruption to supply, would force the UK to compete with Asian markets for non-Middle Eastern supplies meaning any global price spike will directly increase the cost of domestic electricity here in Britain. Even without a physical supply shortage, nervous markets will price-in in risk, causing immediate spikes in forward contracts. Recently, tensions saw day-ahead power prices jump over 10% in a single day.
So, whilst it presently remains unclear just how great the extent of short to medium term increase will be in the cost of UK electricity, we do know that it will for certain lead to higher household electricity bills here at home -especially once the current 3 month price cap has ended- and in all likelihood substantially so. But whilst the international geopolitical situation is going to be ´fuelling´ domestic energy prices here at home -making the already extremely attractive return on investment provided by a solar installation, even more compelling- what is likely to make it an even more appealing investment still, is how the conflict is negatively affecting alternative investment vehicles (which in truth were significantly inferior to solar even before these attacks), as many solar customers take money out of an investment portfolio in order to take advantage of the higher returns and greater predictability of solar panels installation versus other types of financial investment.
The FTSE 100 has opened trading on Monday down around 0.6 per cent, as investors start to react to weekend events.
US futures markets show the S&P 500 likely to open around 1.5 per cent down and the Nasdaq even further in the red, around 1.9 per cent down. Some European markets are even stronger-hit: France’s CAC 40 sits at -1.8 per cent, Germany’s DAX is at -2.2 per cent and Spain’s Ibex 35 sits at -3.0 per cent. The Euro Stoxx 50, which includes some of the biggest firms from Netherlands and Italy as well as those is at -2.6 per cent in early trading.It all means that people with even diverse investments might be seeing dips at the start of this week, be they in stocks and shares ISAs, workplace pensions or SIPPs.
The good news is that returns on a solar panel installation by Ecotekk already exceed more than 10% (completely tax-free) ROI in most instances -something which could jump significantly if the conflict continues, and could go through the roof if the war lasts for years as the both the Iranian and Americans are proclaiming they are prepared for. If you were going to use money held in a share portfolio that is already haemorrhaging value, now is the time to take advantage of the sure thing represented by a Solar PV installation. Why keep your money tied up in a (relatively) low-yielding bank account or investment portfolio when you could get a much better and more reliable return from Solar energy, and which at the same time improves your home, adds value to your property, future-proofs your family against future energy price rises, and could provide a back—up in the event of grid-failure or a disruption in supply, some which is, alarmingly, looking increasingly likely to happen more often here in the UK?
In reality, even before this latest Middle East conflict, solar energy already did make everyone who had it installed (so long as they paid a fair price and it was all installed correctly -as you always get with an Ecotekk solar panel installation), significantly better off for doing so. This just makes the logic even more compelling, and the urgency all the greater. The British and US governments may well do very little to intentionally boost solar panel installations in Wales and England. But they do a great deal indirectly, through their poor policy choices. Ultimately both the economic as well as the moral case for having solar panels installed has never been more powerful, and anyone with eyes and who can see, can take advantage of.
So if you’re reading this and considering getting solar installed, why wait till bills go absolutely through the roof? Why wait until the liogfwhts are going out? Why waste another day of sunshine’