Invoice for Solar panels before 12th December

[richlatham]

Hi

Installations of solar panels after 12th December attract a FIT of 21p as compared to the 43p before.

I've somewhat missed the boat, but an installer has told me that he can do all the paperwork to ensure I get the 43p rate, but install next week - ie after the cut-off date.

I thought the installation had to be completed before 12th December.

Any advice appreciated.

:confused5:

 

[VMan]

Its illegal and you can be convicted of fraud if you are found out to claim the FIT's with false information. up to you..but you have been warned.

 

[BruceB]

Broadcasting such arrangements on a public forum if there is the slightest chance you can be identified is unwise.

The criterion is that an installation has to be accredited before the 12th.
In order to be accredited it must first be commissioned.
In order to be commissioned it must first exist.

 

[Earthstore]

He would be breaking the law, it's fraud.
Your installation has to be installed, commissioned, and your FIT forms have to be with an energy supplier (filled in correctly) by the 12th.
All is not lost though, the price of systems has come down, and even if, and only if, as it is somewhat up in the air at the moment, the tariff is set at 21p, some of us can still offer you a ROI between 8-10%
Hope this helps.

 

[richlatham]

Ok... Thanks for the advice.

I wasn't sure what the exact rules were so asking the question on a public forum is a good plan because I expected I'd get some knowledgable replies - and I did, even though they weren't quite what I would have liked to hear!

Like I said, I missed the boat....

 

[jamescdrw]

lol could you install in the garden on the floor / grass commission it then go back and do your non conform ?

 

[Earthstore]

No, non compliment.

 

[TMGL]

Can't See a problem with 'ground commissioning' as long as you've got a gen meter and inverter. No rule saying you can't move it from garden to roof later is there?

 

[solarsavings]

There may be a few moved from the roof to the ground this week.

 

[Earthstore]

So how would you mount them? Would you get planning?, Would it conform to MSC ? Would it conform to REAL? What if you do this and it backfires and the customer does not get the tariff you promised?
I am sure somebody will risk it, why? Because they have no intention of trading in the next 12 months.
Good practice, anybody working in this industry should always use Good practice.

 

[finchy]

Any installations after the 12 will be suspicious as per the REAL guidance we can not sell Solar PV until a definite rate has been set (miss selling). So basically all installations ones see's after this date is illegal, until the Government makes their mind up. I completed our last install yesterday and spoke to a very helpful lady at EON, she said they have been receiving 1000 FIT applications a day !

I think when the governments bean counters have done the sums, they might revise down the FIT rate, in a state of shock ! I hope not but, if their justification was based projections (albeit very dodgy maths) I don't think they expected this amount of installs in 6 weeks !!

 

[SRE]

We have a local firm who are continuing installations after 12/12. I don't think they understand the whole consultation situation.
Imagine a system generating 3000kwh/pa.

3000 x 0.21 = £630
3000 x 0.18 = £540
3000 x 0.16 = £480

If the government decide that the 46k installations in November is too high and they drop the fit to 18p anyone installing would potentially be liable for the £90 difference a year for 25 years.

I think we're stuffed until Feb :mad2:

 

[SolarCity]

The more I've read about this, the more I think you're right.

As you understand it, if installs are carried out after the December 12th they may well be subject to a rate LESS than 21p? I have a meeting on Monday with a customer that wishes to proceed. I have no idea what to tell him.

 

[finchy]

You need to have some sort of waiver that he signs to say they understand the FIT rate has not been set and you have explained the consultation process....Just tell him to wait the prices have already dropped since monday (including the holy Sanyo's) ! Re book in the new year !

CYA (cover your ar5e) - As one would say !

 

[SRE]

As ever it will boil down to your moral approach to customers. I can't sell to someone not knowing what rate of fit they will get and think that it is ok because I've got them to sign a waiver but others will do that and consider it's ok. I think it will be difficult to prove that a waiver is justified if the rate comes down but some will take the risk.

We're planning to do surveys up to the end of Jan, take orders for the day that the result of the consultation is announced but we're not taking any deposits and our customers will be free to cancel if the government does the dirty again. For us it's the only honest way to deal with our customers.

 

[JulianC]

Not that it needs to be said among esteemed company, but just be honest with the customer. Give them the facts unclouded by personal opinion and let them make their own minds up. It's all we can do at the moment. We can still quote for a top quality PV installation at a fair price, regardless of the final FIT rate. It just might be a while before the orders come rolling in!

 

[mdovey]

I think this may be one to point out to the lawyers involved in the court cases against the government (if they aren't on this already). By having the cut off date before the final decision on the consultation, the government are in effect creating a 4-6 week period during with solar installers cannot makes sales or install panels without being in danger violating the government's own legally binding consumer protection schemes, and a period during which the uncertainty on the final FiT as regards the customer will have a greater impact during this period than the final FIT reduction.

 

[martin fuller]

Re ground mount,,, I went along this route, and the planning for a 'stand alone' system is a nightmare, ( not closer than 5 mtrs to curtledge boundary) etc etc, only option is on a building!!! check out wikkapedia definition of a building,' a some construction with a roof and sides designed to be used as a , store, dwelling,' for some purpose !!
So a building is the only option, least is with our local council,
cheers

 

[gricks]

..... at the moment, the tariff is set at 21p, some of us can still offer you a ROI between 8-10%
Hope this helps.

What does "ROI between 8-10%" mean? Halving the FIT to 21p/kWh has meant the break even point has moved from say 11 years to 22 years leaving say 3 years of profit at say £500/yr. If customer spends £11,000 on the install at 10% for 25 years then using a compound interest calculator e.g. Compound Interest Calculator the amount after 25 years is a fantastic £119,182. Are you sure you didn't mean to advertise half a percent per year as this gives £12,461 i.e. £11,000 back with £1,461 profit.

 

[Earthstore]

I will try and explain.
ROI (return on investment) of 8-10% is still possible. The FIT for generating electricity @ 43.3p now reduced to 21p only makes up part of the ROI, you also have to take into account savings on your electricity bill (if you are using what you have produced from your PV system you will not be buying it from your energy provider) saving around 13p per unit, also the electricity that you sell back to the grid.
Add into the "mixing pot" around 25% reduction on capital expenditure.
Also for a 25year investment you need to add in an assumption of what the RPI will be, as it is linked, oh yes and it's tax free.
Now, as mentioned in other threads, I personally am not willing to sell until the outcome of the FIT consultation has been announced.
Hope this helps
Earthstore Energy

 

[solarsparkie]

earthstore , whats the lowest costs you have found for standing charges on export back to the grid and have you taken these into account in your roi figs? ( 13 p unit must be domestic your on about and the 25% reduction in capital expediture must have nothing to do with corperation tax but reduced sale prices , what level of rpi are you using and are you allowing for repair costs if you are going to using the cheapest nasty chinese kit our there )

I will try and explain.
ROI (return on investment) of 8-10% is still possible. The FIT for generating electricity @ 43.3p now reduced to 21p only makes up part of the ROI, you also have to take into account savings on your electricity bill (if you are using what you have produced from your PV system you will not be buying it from your energy provider) saving around 13p per unit, also the electricity that you sell back to the grid.
Add into the "mixing pot" around 25% reduction on capital expenditure.
Also for a 25year investment you need to add in an assumption of what the RPI will be, as it is linked, oh yes and it's tax free.
Now, as mentioned in other threads, I personally am not willing to sell until the outcome of the FIT consultation has been announced.
Hope this helps
Earthstore Energy

 

[Earthstore]

I crunched the numbers for a commercial system around a 30KWP output, using an export meter supplied by their own energy provider, with the cost of running the meter and the uplift on the export would have left the customer £200 per year worse off,working on an assumption that the customer would export 80%.
This particular one was even more complex as there were potential upgrades from the DNO, that we had to factor in also.
I contacted several other companies for their charges of installing and running an export meter, but then it gets very complex, you then have to factor in the pence per unit that they supply at, the lower cost of running their meter, an uplift from 3.1 to 5p export and there are also the tax implications, just to obtain an end result.
If you care to read my post I do not use a 25 year ROI, I added for the benefit of a previous post that they need to factor the RPI into their calculations. but for your informational 4% is the lower forecast.
25% capital expenditure is just what it say's, the reduction in system costs, It has nothing at all to do with corporation tax, as you are aware, that is for limited companies.
I do not think SMA would take kindly to being referred to as "cheapest nasty Chinese kit"!
The bones of this are, I can still make the numbers work, calculated correctly,system designed correctly, using quality equipment.
The ROI is only back to where it was 18-24 months ago, you just have to work harder to get there.
Do you not think that any old Tom, Dick or Harry could obtain his MCS, pop down to his local panel supplier, plonk them on a roof, and say there you go 13% ROI was going to sustain an industry?
Why do you think we are in this mess?

 

[gricks]

Add into the "mixing pot" around 25% reduction on capital expenditure.

Are you deriving the "ROI (return on investment) of 8-10%" partly because you guarantee to buy back the system from the customer at the end of 25 years at 75% of whatever they paid ? Who pays for the scaffolding ?

As nobody can predict future RPI inflation trends and inflation affects other parts of the calculation solar calculators like Solar Energy Calculator / Solar panels (PV) / Generate your own energy / Home (United Kingdom) - Energy Saving Trust utilise a flat model that avoids unknowns.

If you made up some hypothetical RPI then Dodgy Dick Solar Company could dream up a bigger RPI and pinch your customers with a promise of ROI of 11-13%.

Do you think that people seeing adverts like Cash ISA 4% versus Solar panels 'promises' 10% had anything to do with the 4991 registrations of 4kWp systems and below in week ending 23Oct2011 just before the consultation leak, causing the government to panic and close down the whole industry?

 

[BruceB]

I have said before, but in my opinion you should not be applying a rpi figure. The FIT rate received will be inflated by rpi anyway so using the current non inflated rate gives you a good estimate of a 'net present value' figure which is a sensible way of doing it. If you inflate by rpi in your calculations what you are in effect saying is that say £10,000 in 25 years time is worth the same as £10,000 now.

 

[Earthstore]

Gricks, are you aware of how ROI is calculated on a PV system?
It is easy if you know how, you calculate what output the PV system will produce per year, using a SAP formula, on average in the area I live our systems are performing 10% above this formula, fact.
Then you calculate by the FIT now @21p add the savings and export then using the cost of the installed system you have your ROI simples.
As I said before, I do not use 25year speadsheets as you can alter any assumptions to make the end result whatever you want it to be.
If you do not believe it is possible then do not buy a PV system, but please do not keep accusing me of any false calculations.
I am beginning to resent some comments, I trade locally and honestly.

 

[G_FUNK]

Some people just can't see the light!

 

[gricks]

An ROI example taken from Energy Savings Trust [EST] Ref1
Postcode SW1A 0AA 21p/kWh Faces South with optimum 30deg tilt.
Use EST calculator as fewer inputs to manipulate, it includes FIT/export/savings/S-values/degradation and after all EST is DECC funded.
As we use DECC proposed 21p/kWh then it must be new or retrofit =< 4kWp so as Ref1 use 2.9kWp
The EST calculator gives Total Income over 25 years is £14,548 (i.e. Gain). Please check!
it also suggests Total Costs of £11,700 and Ref1 suggests £11,500 so we'll use the mean 11600.
Ref2 and others define ROI as (Gain-Cost)/Cost and this is the same as (Gain/Cost) - 1
We need to multiply by 100 to get percent and divide by the Period to get % per year.
Simple Annualised ROI=((Gain/Costs)-1)*100%/Period so over Period=25 years this simplifies to...
ROI=((Gain/Costs)-1)*4 for above example this is ((14548/11600)-1)*4 = 1.017 %/year Note 1
Reasonable as the EST calculator and Ref1 gave Payback time 20 years so only 5 years are profitable.

If Mr Bloggs claims "ROI (return on investment) of 8-10% is still possible" we can now find out how much they charge to install including scaffolding. With Annualised ROI=10% then 10=((Gain/Cost)-1)*4
So Cost = Gain/3.5 = 14548/3.5 = £4156.57 ... Chinese gear can be very good. Note 2

Note 1: Check using Ref3 an ROI calculator. Original Investment=11600 Returned Value=14548 Go from 6/1/2000 to 6/1/205 press [Calculate] we get Simple Annualized ROI 1.0%
Note 2: Change Original Investment to 4156.57 press [Calculate] we get Simple Annualized ROI 10.0%

Ref1: TinyURL.com - shorten that long URL into a tiny URL
Ref2: Return On Investment (ROI) Definition
Ref3: http://www.money-zine.com/Calculators/Investment-Calculators/Return-on-Investment-Calculator
Part 2 to follow - why a standard way of stating returns in a familiar form to the public is good news for the solar PV industry- the light at the end of the tunnel.

 

[gricks]

Erratum in last post: Note 1: should read "Go from 6/1/2000 to 6/1/2025" - dodgy keyboard to blame.

 

[Earthstore]

From table
Savings
Export	50%	3.1	Export
Total Savings/Income
	VAT

[TD="colspan: 2"] Feed-In Tariff [/TD]
[TD="width: 103, colspan: 2"] Output [/TD]
[TD="width: 66"] X Feed in Tarriff Rate [/TD]
[TD="width: 94"]
[/TD]
[TD="width: 66"]
[/TD]
[TD="width: 101"] Total [/TD]

[TD="bgcolor: #CCCCFF, colspan: 2"] 3433.6 [/TD]
[TD="bgcolor: #FFFF00"] 21 [/TD]

[TD="bgcolor: #CCCCFF"] £721.06 [/TD]

[TD="bgcolor: #FFFF00"] 50% [/TD]
[TD="colspan: 2"] Cost (pence) [/TD]
[TD="bgcolor: #FFFF00"] 13 [/TD]

[TD="bgcolor: #CCCCFF"] £223.18 [/TD]

[TD="bgcolor: #CCCCFF"] £53.22 [/TD]

[TD="bgcolor: #CCCCFF"] £997.46 [/TD]

[TD="colspan: 2"] Cost of installation [/TD]
[TD="bgcolor: #FFFF00, colspan: 2"] £9,520.81 [/TD]

[TD="bgcolor: #CCCCFF"] £9,996.85 [/TD]

[TD="bgcolor: #FFFF00"] 5% [/TD]

[TD="colspan: 2"] Annual return on investment [/TD]
[TD="colspan: 2"]
[/TD]

[TD="bgcolor: #FF99CC"] 10.0% [/TD]

Well you really are trying to dazzle us with your brilliance, and as fantastic as it may be it is flawed.
Please see the table above, this is for a 4KWP system, fully fitted, including scaffold, the performance figure of 3433.6 is for the optimum roof according to the SAP formula.
If I was certain of the FIT rate I would supply this system to you.
It clearly shows the ROI (the pink section), so, yes it is possible.
As stated again and again, this is for year one, if the system out performs the calculation, which in my area they are your ROI will increase, also the FIT is indexed linked, and energy prices are rising, but in my opinion you have to use too many assumptions for a 25year ROI
Why you are pursing this matter in such a negative way is quite beyond me, are you trying to prove to us all that you are in some way superior?

 

[SolarCity]

Earthstore - just a difference of opinion, is it not?

Keep it civil, ladies.

 

[Worcester]

Actually guys from an accountant and investors point of view you are not talking about ROI (return on ibnvestment) you are talking about the IRR - internal Rate of Return.

Given the above figures from Earthstore, assuming no maintenance costs:

Over a 10 year period, you ROI is -20.1%
Your 10 Year IRR is -5.7%


i.e it doesn't add up.

If you take 25 years and assume maintenance costs at 2% per annum (e.g. inverter replacement)

Your 25 year ROI is 63%
and your 25 Year IRR is 6.5%
giving you a multiple of 1.63
and the Present Value of your investment is £16,416.42

It's the IRR that matters.

Just getting my money back doesn't count.
The problem from an investors point of view (on a house) is that it is a tied asset - once bought it has no intrinisic value until the property is sold - the money is locked down and can't be used for anything else, also no-one has been able yet to prove increased property values.
If I have stocks and shares, or a cash ISA, I can realise that assett at any time.

On a commercial installation it may be different since these could be sold retrospectively to effectively become a roof to rent scheme, they could also be used as 'guaranteed' income as security for other loans. - Doubt you'd get that on a house though!

 

[solarsparkie]

well thanks for that , could you show me the export tarriff provider which dosnt charge a standing charge please

From table
Savings
Export	50%	3.1	Export
Total Savings/Income
	VAT

[TD="colspan: 2"] Feed-In Tariff
[/TD]
[TD="colspan: 2"] Output
[/TD]
[TD="width: 66"] X Feed in Tarriff Rate
[/TD]
[TD="width: 94"]

[/TD]
[TD="width: 66"]

[/TD]
[TD="width: 101"] Total
[/TD]

[TD="bgcolor: #CCCCFF, colspan: 2"] 3433.6
[/TD]
[TD="bgcolor: #FFFF00"] 21
[/TD]

[TD="bgcolor: #CCCCFF"] £721.06
[/TD]

[TD="bgcolor: #FFFF00"] 50%
[/TD]
[TD="colspan: 2"] Cost (pence)
[/TD]
[TD="bgcolor: #FFFF00"] 13
[/TD]

[TD="bgcolor: #CCCCFF"] £223.18
[/TD]

[TD="bgcolor: #CCCCFF"] £53.22
[/TD]

[TD="bgcolor: #CCCCFF"] £997.46
[/TD]

[TD="colspan: 2"] Cost of installation
[/TD]
[TD="bgcolor: #FFFF00, colspan: 2"] £9,520.81
[/TD]

[TD="bgcolor: #CCCCFF"] £9,996.85
[/TD]

[TD="bgcolor: #FFFF00"] 5%
[/TD]

[TD="colspan: 2"] Annual return on investment
[/TD]
[TD="colspan: 2"]

[/TD]

[TD="bgcolor: #FF99CC"] 10.0%
[/TD]

Well you really are trying to dazzle us with your brilliance, and as fantastic as it may be it is flawed.
Please see the table above, this is for a 4KWP system, fully fitted, including scaffold, the performance figure of 3433.6 is for the optimum roof according to the SAP formula.
If I was certain of the FIT rate I would supply this system to you.
It clearly shows the ROI (the pink section), so, yes it is possible.
As stated again and again, this is for year one, if the system out performs the calculation, which in my area they are your ROI will increase, also the FIT is indexed linked, and energy prices are rising, but in my opinion you have to use too many assumptions for a 25year ROI
Why you are pursing this matter in such a negative way is quite beyond me, are you trying to prove to us all that you are in some way superior?

 

[solarsparkie]

thankyou very much worcs , the voice of reason at last

 

[Earthstore]

Would you be kind enough to explain how a 10% ROI over 10 years equates to a -20.1% loss?
£997.46x10=£9974.6, investment was £9996.85 loss of £22.25.
But this does not include RPI or energy price rises, if you were to add in some assumptions for these, then the small loss would be a gain, would you not agree?

Sorry, export provider making a charge? The example given is for a 4KWP system, there is no export meter installed.

 

[solarsparkie]

so where does the export money come from?

 

[Earthstore]

Are you not aware how the FIT works?
Do you understand at what output you have to have an export meter? ( this may vary with different DNO'S).
I am always willing to help on here if I can, but recently I have been shot down by trying to help, I am fully aware of my mathematics, I keep it simple.
I respect Worcester's comments, (not sure about clik fit though) but as I asked, if you have a 10% return over 10 years, how does that equate into a 20% loss? 10x10 =100.

 

[solarsparkie]

earth store , you get a standing charge if you want an export contract as i understand it you have to take that off your income , if you have found someone to provide you free export remuneration it would be very usefull to everyone here

 

[Earthstore]

You are correct, if you have an export contract.
This varies according to the suppliers, also so does the tariff they pay you, shop around you can get up to 5p export, however with the cost of running the export meter, and their various charges you have to calculate which one is the most viable.
My example was for a 4KWP system, so there would be no export meter installed, so energy companies assume that you use 50% and they buy 50% back from you.
If you calculate correctly on a customers system and take into account their usage/export, some may benefit from an export meter and some may not.
It is normally the later.
I really hope this helps.
Do you always install an export meter?

 

[solarsparkie]

in a word no , when standing charge factored in wasnt worth it but if you have found someone to pay on the 50% no charges please enlighten me , i keep askin and you keep avoiding giving me an answer

 

[Earthstore]

We are all sorted on this one, phones are a fantastic invention.
Time for me to retire from this thread, but thanks for any constructive posts.
Merry Christmas