Lazy and misleading or truth Which report

Prices based on a 3kW system for £10K? That price is a year out of date at least. Very disappointing article.
 
Very misleading. Why does it not take into account the inflation indexed linking? why not include electricty costs that rise as they have done year on year for the last 5 years?

Why not actually get some up to date installation costs as £10,000 is way out and they should focus on the average cheapest 3 kWp PV system as consumers should be encouraged to shop around for the best deal as they would do with their energy supplier, credit card and buying a new house or car.

Therefore the article is not worth reading further
 
Oh dear, what a badly compiled comparison.
To make a 25yr comparison you have to add in some educated assumptions, like energy price rises and the index linked FIT, if they were added in and then compounded over 25yrs the final figure would be very different.

When making this type of comparison you could make the returns for PV whatever you want to, it depends on your assumptions, but to openly admit they have put none at all in makes the whole thing pointless, well apart from making the public believe that PV just does not work financially any more.

Also if they were to use the real price of a 3KW system at today's prices then their calculations would be very different.

Why they do not speak to customers first that have a quality install and get their views is quite beyond me.
 
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its the same as on the EST website assumptions

"Our Solar Energy Calculator presents financial performance in ‘real’ accounting terms (i.e. in today’s money). Therefore this tool
does not include any adjustments for the Retail Price Index (RPI) or inflationary costs for electricity (imported) over the next 25
years. It should be noted that the Feed-in Tariffs rates payable to you over this period by the utility companies are linked to the
Retail Price Index (RPI) and will automatically increase with RPI every year. No maintenance costs have been included in our
calculations (e.g. replacing the inverter or inverter components) "

http://est2.solarjuice.com/static/downloads/est/Solar%20Energy%20Calculator%20-%20Assumptions-3ea8583e7814429c5f661b6736316e64b4501c1e.pdf

Using this means you can get paybacks of 18 years....who would invest in PV if this was actually the case?
 
I'm known on here for "pessimistic" projections for solar PV, but here are the annual figures which I think each option in Which's list would achieve, assuming inflation at the Bank of England's 3% target, assuming a new inverter (£1000) once during the system's 25year FiT lifespan, assuming 35% power usage "in-house" - and assuming their £10000 price for 3kWp is correct, but also including a more realistic £9000 for 3.6kWp.
It also assumes that the system has no value after year 25 of the FiT agreement; i.e. the original outlay is lost and the only benefits were from bill savings and Feed-in-Tariff/export tariff payments for the 25 year period.

At the old 43p FiT:
Cash ISA................3.25%
3kWp (£10k)..........8.5%
3.6kWp (£9k).........10.5%


At the new 21p FiT:
Cash ISA................3.25%
3kWp (£10k).............5.75%
3.6kWp (£9k)...........7.5%


At the proposed 16.5p FiT:
Cash ISA................3.25%
3kWp (£10k)..........4.75%
3.6kWp (£9k).........6.5%
 
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Of course, if governments around the world contiune to struggle to deal with their debts, they will probably eventually - or continue to - devalue (quantitative easing) their currencies.

In this instance, as in the late 1970's, inflation could really pick up, so any investment with inflation linking would be highly prized.
Cash ISA's, paying 3.5% with inflation soaring to 10% would result in life savings which once might have bought a nice new car, being only able to buy a moped after ten years.

If inflation stays at the recent 5% per year, then even a 16.5p inflation-linked FiT will be offering close to 10% annual return on a 3.6kWp/£9000 outlay.

Do not underestimate the safety net which inflation-linking provides.
 
The following link is to an article which shows the tendency for governments to devalue during difficult times - with the inflation rate being higher than interest rates, resulting in savers losing their buying power (the page scrolls to several graphs lower down - pay particular attention to the two inflation v interest rate charts at the bottom of the page):

History of Inflation in UK | Economics Blog

The two wars, the 1970's and again today were/are troubled times.

Place your bets, gentlemen, on where inflation and interest rates are heading - and which one is likely to be the highest.


Given a choice between my savings in cash, or my savings "invested" into a solar array even with the proposed 16.5p FiT, it's no contest; the solar array wins by a mile.
 
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FB. said:
If inflation stays at the recent 5% per year, then even a 16.5p inflation-linked FiT will be offering close to 10% annual return on a 3.6kWp/£9000 outlay.

Do not underestimate the safety net which inflation-linking provides.
Click to expand...


Absolutely, without RPI linking even last years 43p would have been a poor deal over the lifetime of the scheme.

As you point out with money printing across the globe, with Europe recently printing over £2 Trillion to smooth out the Euro crisis (not even remotely solve it) we are indeed in interesting time.
 
This really winds me up, i have just started another thread about misleading media campaigns before even seeing this one. The bulk of the press never really understood any of this from the beginning.

I have just written a complaint to Which about this article, it's misinformed at best and deliberately incorrect at worst.

Their mandate from their website is: 'We focus on consumer issues and ensuring you have the information to make the right choices - whether that's by reviewing products or providing independent advice you can trust.'

With this article Which has failed the consumer.
 
For those pondering whether we'll see deflation as in the 1930's; I believe it to be very unlikely because:

1.
We are no longer on the gold standard, which, in "the old days" prevented governments printing money, since each new unit of currency had to have gold bullion backing it.

2.
Governments and central banks are already using quantitative easing, which is basically printing money and is a devaluation of the existing money, with the resulting inflation which results (inflation is actually the value of money going down, not the price of things going up; measure a house priced in non-printable gold and the price in ounces of gold is not too far away from where it was when many of us were born).

3.
The US, in the early 1930's, "discovered" the cure for deflation. They devalued the Dollar. The flood of extra money into the system killed deflation stone dead. The US Federal Reserve Governor Ben Bernanke was appointed not least because his academic studies involved much work on the 1930's depression/deflation.
 
confounded said:
Absolutely, without RPI linking even last years 43p would have been a poor deal over the lifetime of the scheme.

As you point out with money printing across the globe, with Europe recently printing over £2 Trillion to smooth out the Euro crisis (not even remotely solve it) we are indeed in interesting time.
Click to expand...

Worse still; while money is devalued, the "price" of essential daily-living rises - but with little in the way of pay rises for many, due to developing nations' workers willing to work for a fraction of what the UK workers demand.

So with rising costs and static wages, daily living looks set to get tougher for many households.
With little interest available on savings, an inflation-linked Feed-in-Tariff and the ability to use home-generated power could help many households limit the damage from rising costs.
 
Absolutely useless article.

As has been pointed out previously, £10k wasn't even the going rate for a 3kWp before the deadline, and it certainly isn't now. If you take all these poorly made assumptions then you get a predictably poor conclusion.

For example, we may as well consider what would happen to a solar panel if we assumed it was made of cardboard and someone threw it in the sea.
 
Energetic said:
And the BOE claims there's no proven link between inflation and QE...
Click to expand...

I know I said I'd be quiet, but the following links suggest a correlation:

Commodity Prices Show Strong Correlation With Fed Treasury Purchases - Seeking Alpha

How the Fed triggered the Arab Spring uprisings in two easy graphs - Telegraph


....and why shouldn't there be a correlation?

As I said earlier: inflation is not so much the cost of things going up, but more a case of the value of money going down because governments and central banks can't resist printing more of it to pay for their overspending.
 
One thing everyone even "Which" has overlooked or not applied is the very fact that you only have £ 5,640 every year (TAX FREE) to invest in a cash ISA, so a couple could of brought their Solar PV system with the excess money they had left over in one or more tax periods, so maximising their potential gain, so could have done both ..... LOL
 
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Therefore if its money ppl have used out of an existing Cash ISA which is maintained annually, to pay for a Solar PV system or used money they would of put into a good paying Cash ISA ( ie. therefore NOT utilising their ISA limit ) the report will not be that far out, apart from what's been clarified already.

However if the Solar PV system has been purchase with money up and above what they couldn't invest in a cash ISA as they have reached that year's limit - the return of a PV system would be far greater as they would then have to compare against other Tax paying Interest accounts for example ......... which their surplus money was deposited in as it naturally couldnt go into an ISA that year.

So IMO not as straight forward as first thought................. as normal it depends on your own financial circumstances
 
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One of the investment ideas we looked at was people taking money out of their pension funds to reinvest in PV. The FiTS is then reinvested back into their pension, effectively increasing their contributions and giving them a second bite of the cherry so to speak.
 
moggy1968 said:
One of the investment ideas we looked at was people taking money out of their pension funds to reinvest in PV. The FiTS is then reinvested back into their pension, effectively increasing their contributions and giving them a second bite of the cherry so to speak.
Click to expand...


No wonder the price of stamps have gone up - that was your fault was it - lol
 
Just a thought, WHERE ARE OUR TRADE BODIES in all this?

These people take our money to represent our interests. Where are the articles refuting the ingnorant, dishonest press reports full of bile and vested interest.
 
Energetic said:
Just a thought, WHERE ARE OUR TRADE BODIES in all this?

These people take our money to represent our interests. Where are the articles refuting the ingnorant, dishonest press reports full of bile and vested interest.
Click to expand...

They are there to take the money and kick you out when a customer complains, what else do you think they are there for? To help and support you? ha ha ha ha ha!

I think the article is nicely timed with the drop in tarif and cuts in renewables, almost as if it had been paid for by an energy company...........or at least that was where the figures came from!

Anyway I don't know about your customer base but in the south of England the majority of our installs are just under 4kw as that is easily what gives the best returns due to the fairly high initial fixed installation costs (plus the EPC red tape!)

The customers that go for less basically accept the returns are less as normally they just don't have room!
 
Energetic said:
This really winds me up, i have just started another thread about misleading media campaigns before even seeing this one. The bulk of the press never really understood any of this from the beginning.

I have just written a complaint to Which about this article, it's misinformed at best and deliberately incorrect at worst.

Their mandate from their website is: 'We focus on consumer issues and ensuring you have the information to make the right choices - whether that's by reviewing products or providing independent advice you can trust.'

With this article Which has failed the consumer.
Click to expand...

From the article it is quite obviously an attempt to Sell cash ISAs from their site to which they earn money, this is not consumer focus other than click on the link and get an ISA.

I have forwarded it to our legal guy and asked him to see what he can do as it is obviously untrue and detrimental to the market, If we could achieve a revision of the article based on true figures it would be great, but my guess is nothing will happen.
 
press complaints commission?
be great if which got nobled for the sort of behaviour they claim to be campaigning against!
 
So who has received a reply from Which?

I have today, telling me I need to be a member!
A swift reply has been sent off explaining that the publication is for the public, so as a member of the public I have a right to complain.
I await their comments.
 
Well, had a big long reply today, telling me that the cost of a 3kw system is £10000, and they have used the government figures from the EST website, they could not factor in it is index linked, because it is not garranteed.

Who out there is selling 3kw for £10000? Forget my prices, just googled a few and you can have 3.9kw for £7-£8k, not too sure about the quality, but it is a long way from £10000 for 3kw.

Also if one assumes the RPI to be 3%, which if you look back in history 3% would be conservative, and compound that over 25 years, then your total gain will outperform any ISA.

I tried for the benefit of all, both the general public, who I am aware read this forum, and installers.

So if anybody else would like to have a pop at Which for printing such a misleading article, then please do.
 
I had the same reply. I have responded to them as below. I feel our industry is getting a caning at the moment and nobody is standing up to the nonsense spouted by politicians and the media. One point i forogt to mention in the email is that Which? do an isa comparison, i wonder if they get paid for referrals to the banks/building societies that provide them? I have posted this in the Sun Lounge last night so apologies for repeating myself...

Our industry bodies should be getting the message out that PV is not dead... Give them heaps!!!



Dear .........

Thank you for your prompt reply.

I understand how you have come to the figures you have published, the fact is though, they are still misleading.

Let’s start with the initial price, installers up and down the country are routinely charging around £8K for a midrange quality 4kW system. If you could point me in the direction of some customers willing to pay £10K for 3kW I’d be most grateful! We’re hearing of people charging £6.5K for a cheap Chinese 4kW system. Your example starts with PV at a serious disadvantage based on that price alone.

By leaving out inflation you are both overstating the performance of the ISA and understating the performance of PV. Index linked investments are a rare thing these days and it provides a serious safety net for a PV customer. Adjusting the ISA rate to current published inflation figures leaves you with very little growth percentage. With the real un-doctored inflation rate it becomes even worse.

Now I’m not a financial journalist or an economist but my take on inflation is this; we are likely to see international central bank intervention in the form of quantitative easing for some time to come, leading to a higher than usual inflation rate on food, fuels, energy and the necessities of life. Now I realise none of this is guaranteed but the likelihood of this intervention is probably higher than allowing an out and out crash. I’d be interested to hear your views on this but the way I see it PV is about the best investment around. I have ISA’s, I’m renting at the moment but if I had property I would junk the ISA’s and get as much PV installed as I could.

The majority of our clients are shrewd investors and are cashing in poorer performing investments to go for PV. They are able to work the figures out for themselves. If the payback for PV was as poor as your figures suggest we would not have city institutions piling into the rent a roof schemes that we currently do, it’s a no-brainer (as much as I dislike that expression) for a professional investor, guaranteed 10% returns, every fund managers’ dream! Renewables and microgeneration represent a great opportunity for households to lessen the stranglehold that the big 6 have on us all, as bills increase so will their tariff payments and their own production will become more valuable to them.

If you’re really interested in presenting the facts and the best advice to consumers I urge you to speak to consumers or credible installers and get a real set of figures and/or a case study to look into. Contact anyone on the forum I linked to the previous email or myself, we would be happy to help. Our industry is currently being demonised by uninformed media and jaded corrupt politicians in the pockets of the big 6 energy companies. Germany has seen a reduction in wholesale energy costs due to the large scale PV and wind deployment contrary to the current treasury line that we’ll all pay more.

I feel your time would be better spent helping consumers choose the right PV company, there are some unscrupulous companies out there, the rent a roof crowd particularly insidious, often taking away the ability of many of their customers to sell their own homes or re-mortgage.

Looking forward to hearing your thoughts.
 
Energetic said:
I had the same reply. I have responded to them as below. I feel our industry is getting a caning at the moment and nobody is standing up to the nonsense spouted by politicians and the media. One point i forogt to mention in the email is that Which? do an isa comparison, i wonder if they get paid for referrals to the banks/building societies that provide them? I have posted this in the Sun Lounge last night so apologies for repeating myself...

Our industry bodies should be getting the message out that PV is not dead... Give them heaps!!!



Dear .........

Thank you for your prompt reply.

I understand how you have come to the figures you have published, the fact is though, they are still misleading.

Let’s start with the initial price, installers up and down the country are routinely charging around £8K for a midrange quality 4kW system. If you could point me in the direction of some customers willing to pay £10K for 3kW I’d be most grateful! We’re hearing of people charging £6.5K for a cheap Chinese 4kW system. Your example starts with PV at a serious disadvantage based on that price alone.

By leaving out inflation you are both overstating the performance of the ISA and understating the performance of PV. Index linked investments are a rare thing these days and it provides a serious safety net for a PV customer. Adjusting the ISA rate to current published inflation figures leaves you with very little growth percentage. With the real un-doctored inflation rate it becomes even worse.

Now I’m not a financial journalist or an economist but my take on inflation is this; we are likely to see international central bank intervention in the form of quantitative easing for some time to come, leading to a higher than usual inflation rate on food, fuels, energy and the necessities of life. Now I realise none of this is guaranteed but the likelihood of this intervention is probably higher than allowing an out and out crash. I’d be interested to hear your views on this but the way I see it PV is about the best investment around. I have ISA’s, I’m renting at the moment but if I had property I would junk the ISA’s and get as much PV installed as I could.

The majority of our clients are shrewd investors and are cashing in poorer performing investments to go for PV. They are able to work the figures out for themselves. If the payback for PV was as poor as your figures suggest we would not have city institutions piling into the rent a roof schemes that we currently do, it’s a no-brainer (as much as I dislike that expression) for a professional investor, guaranteed 10% returns, every fund managers’ dream! Renewables and microgeneration represent a great opportunity for households to lessen the stranglehold that the big 6 have on us all, as bills increase so will their tariff payments and their own production will become more valuable to them.

If you’re really interested in presenting the facts and the best advice to consumers I urge you to speak to consumers or credible installers and get a real set of figures and/or a case study to look into. Contact anyone on the forum I linked to the previous email or myself, we would be happy to help. Our industry is currently being demonised by uninformed media and jaded corrupt politicians in the pockets of the big 6 energy companies. Germany has seen a reduction in wholesale energy costs due to the large scale PV and wind deployment contrary to the current treasury line that we’ll all pay more.

I feel your time would be better spent helping consumers choose the right PV company, there are some unscrupulous companies out there, the rent a roof crowd particularly insidious, often taking away the ability of many of their customers to sell their own homes or re-mortgage.

Looking forward to hearing your thoughts.
Click to expand...

I don't do solar so have no vested interest.

Speaking as a lay person i think your argument is sound, to the point and very informative.

Hope you get the answers you deserve.
 
SolarCity said:
By publishing this nonsense, Which? are no better than the cowboy installers that mislead customers.
Click to expand...

That was may thoughts as well, I was wondering if it is something REAL should be investigating, as protecting the customer is the main role and miss information either way should be treated the same.
 

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