Investment returns for solar PV.

[chrishooper78]

I am looking into the financials for domestic solar PV installs and wondered if anyone could help me with the following queries:

1. Whilst the FIT rates are supposedly 'locked-in' for 20 years, is it not possible that successive governments could reduce or abolish these payouts as it suits them?

2. Typically, energy companies will offer 50% as an assumed generation/use rate. One of my installer friends believes 70% is more typical, but the Energy Saving Trust works on 25%. The effects on income are substantial (higher is better!). I realise it depends on the individual case, but with smart meters coming in I would be worried if this were, as a rule, less than 50%.

3. In terms of working out an equivalent return on investment, surely when investing cash you get your capital back but with solar PV after 20 years the panels are worthless? By this reckoning I think solar PV is worth around 7% ROI over 20 years (more like a paltry 5% over 10 years).

Any takers for these highly ignorant and ill-defined questions?

Cheers,

 

[MCS Renewables]

1. A contract is a contract and I am sure some future government would not be stupid enough to mess around with it. For a start it would dampen any future ideas/schemes if the government started backtracking. Also Three of my customers are barristers and two are high court judges, countless are JP's so it would be a interesting legal battle.

2. You get paid for generation and the export bonus is only worth about £75 a year. If you have an immersun or similar your exported over generation can be diverted to give you hot water without affecting export bonus. IMO the export bonus is not worth the hours and hours of discussion it invokes.

3. There is a system in Germany that has been working since 1955 so why should your panels be worthless after 20 years. It was working at 79% of original peak and that is 1950's technology. 20 years is the length of the FIT contract and provided you install decent equipment it should work longer.

Solar PV protects a certain amount of kW hours per year. Assuming this figure is 3000 hours, import price rises only affect the other hours. According to the Energy Savings Trust import costs double every seven years so a 4kW South facing PV system, with German inverter and decent panels costing around £6500 installed pays for itself in import energy savings alone over the twenty years!
The best ISA pays about 3%, solar pays between 10 and 12%. Guaranteed for twenty years ......nothing gets anywhere near solar for ROI.
We have a customer who bought a £6500 system on a interest free credit card and is using the FIT payments to pay it off.
If tastefully installed solar makes you house more attractive to any purchaser as you are selling an ECO property with tax free income.

 

[chrishooper78]

I certainly hear what you're saying on points 1/3, on careful analysis it does seem like a good investment.

On point 2 I was thinking more in terms of the offset on electricity bills from using self-generated electric. The amount you can use does make a big difference to the financial benefit, so I'm wondering if 70% is realistic.

 

[MCS Renewables]

Unfortunately its not an exact science as it depends solely on the home owner.

For instance a retired couple who are home a lot can organise their usage around generation peaks however a single sales rep who stays away from home a lot cannot.

We have projects with immersun units diverting over production into hot water cylinders which works well, especially if you replace the cylinder for one with an immersion at the bottom of the cylinder, and then doing bathroom towel rails when the cylinder is satisfied. These customers are giving nothing (or very little) away but it costs more to replace the cylinder and install some towel rails ! They are saving gas or oil as well so they are extra happy.

Only you know how your electrical usage is throughout the day.
Only you can change your usage to soak up your generated electricity to reduce export hours and import costs.

50% export bonus seems fair enough to me.

You could always pay for an export meter or wait until you get one installed under the EU directive which says we are all getting one by 2020.

I have yet to meet an unhappy owner of a correctly installed and sensibly priced PV system.

 

[SolarCity]

I have yet to meet an unhappy owner of a correctly installed and sensibly priced PV system.

Me either. I doubt they exist.

 

[Worcester]

Importnat side note re Smart Meters and Export.

Export for <=30kWp systems is ONLY deemed if an (approved) export meter is not installed. The final specification for SMART Meters is that they should have the ability to record export.

You can refuse to have a smart meter fitted.

See this thread for full info: http://www.electriciansforums.net/p...ose-if-you-have-smart-meter-fitted-later.html

 

[puddy]

I went with the free solar I couldn’t raise the cash for a solar system!

I have just paid off my mortgage and didn’t want to get a secured loan just for solar panels. I am 48 and disabled and I am at home all day with the wife. We also switched from economy 7 to economy 10 and using the solar for all appliances in the day has helped us bring our electricity bill down

We have a boilermate (not a combi) so only heat the water when we use it, I was thinking of switching it to electric so saving oil too

I hope the electric hybrid cars like the Vauxhall Amp will be available soon on lease so I could get to the doctors and hospital without using petrol/diesel on Electric


I am pleased with the deal I got but it’s a personal choice we all want to keeps our bills down

Regards

Puddy

Ps I use a solar-log 200 Wi-Fi box Fronius inverter I use solaranalyzer pro software android/Win to give me a overview in KW £ Day Month Year

 

[MicraShed]

Im up on my first year of PV.

Last night I submitted my meter readings to the Norweb Federation who dropped my monthy gas & electric DD by £20/ month.

Total income from FIT From a 2.5kWp system has been £490.
Total savings on gas & electric compared with the previous year (we have an Immersun) is £240

Total for the year £730

Total investment was £5000 for the PV and £500 for the Immersun.

 

[MicraShed]

Pleasing little graph on my latest eBill showing nearly 40% less gas use and over 30% less electricity use for this time last year.