Solar instal in Blackpool - lots of questions

[Ian-LS]

Get a decent installer (not a salesman). There are plenty of decent installers around the country who will give you sound advice. Do some research before you get them around so you are clued up and able to spot someone who is talking rubbish. Most of the installers on here know what they are talking about as this is what they do 5-6 days a week (some 7 days a week).

What you want is someone who treats each customer and property differently and looks for solution that meets your needs. If they want your custom they wil take the time to explain everything and give expert advice. There is no better sales tactic than knowing what you are talking about.

 

[danesol]

If you don't know what price PV has currently dropped to then please don't post on public forums saying Solar PV is only worth it for the most suitable houses, companies are trying to make a living on this forum and making general statements won't help . The finances still stack up for low electric consumption houses due to the lower costs of Solar PV now but I agree its not for everyone but still one of the best investments currently out there. The FIT rate has been reduced but its not feeble at all.

Now for the supportive maths why you are wrong for this particular example !

Assume an investment of £ 5,000 in comparison in an ISA paying each year 2.25% and a PV system giving an annual return of 2,500 kwhrs against an household useage of 6,000kwhrs @ 12p/kwh no standing charge with full useage of all electric generated with monies paid for 50% export.

The Invester stays at the property 20yrs and useage and generation remains static.

PV calculation;
Assuming no electrical bill saving - system will take ~12.5yrs to pay back alone

Balance of investment at 12.5yrs - NIL !!!!!!

Assume an additional electrical saving on utility bill of £ 200 p/a, add this to fit tarrif revenue, system then will take ~8.3yrs to pay back

Owner of property still has NIL balance and hasnt gained any profit whatsoever at this stage.

Assuming again 2% RPI on tarrif - after 20yrs - system will be in profit by ~ £ 8,800, assuming nothing has broken or had to be replaced ( panel or inverter wise ).

ISA Investment calculation;

£ 5,000 @ 2.25% will yield £ 1,018.63 interest profit after 8.3yrs
Invester still retains the initial investment of £ 5,000
Balance @ 8.3yrs = £ ~6,018.63

£ 5,000 @ 2.25% will yield £ 1,591.07 interest profit after 12.5yrs
Invester still retains the initial investment of £ 5,000
Balance @ 12.5yrs = £ ~ 6,591.07


AT 20yr position !
£ 5,000 @ 2.25% will yield £ 1,802.55 interest profit after 20yrs
Invester still retains the initial investment of £ 5,000
Balance @ 20yrs = £ ~ 7,802.55

 

[Ian-LS]

I'm not going to get into a discussion about the merits of investing in Solar PV on here as I know Solar PV is still one of the best investments out there (if i didnt think this I wouldnt be designing Pv systems for a living), its not for everyone granted. Just a small question though, what would happen if you put all of the Feed in Tariff & export payments back into an ISA at 2.25% interest, nothing stopping the customer doing this.

 

[SRE]

I have two accountants that I'm currently finalising quotes for - they musn't be able to do their sums

Nothing wrong with an opinion it's welcomed but things have moved on a lot in pv in the last few months and in most cases it's still a great investment. It puzzles me how people don't think twice about spending 15 - 20k on a car that has depreciated the minute it's been driven out of the showroom but they quibble about spending 6-8k on something that will save money for 40 years. Nowt as queer as folk

 

[danesol]

I have two accountants that I'm currently finalising quotes for - they musn't be able to do their sums

Nothing wrong with an opinion it's welcomed but things have moved on a lot in pv in the last few months and in most cases it's still a great investment. It puzzles me how people don't think twice about spending 15 - 20k on a car that has depreciated the minute it's been driven out of the showroom but they quibble about spending 6-8k on something that will save money for 40 years. Nowt as queer as folk

Have you ever seen pictures of my cheap electric car :laugh3:

 

[Gavin A]

Now for the supportive maths why you are wrong for this particular example !

Assume an investment of £ 5,000 in comparison in an ISA paying each year 2.25% and a PV system giving an annual return of 2,500 kwhrs against an household useage of 6,000kwhrs @ 12p/kwh no standing charge with full useage of all electric generated with monies paid for 50% export.

The Invester stays at the property 20yrs and useage and generation remains static.

PV calculation;
Assuming no electrical bill saving - system will take ~12.5yrs to pay back alone

Balance of investment at 12.5yrs - NIL !!!!!!

Assume an additional electrical saving on utility bill of £ 200 p/a, add this to fit tarrif revenue, system then will take ~8.3yrs to pay back

Owner of property still has NIL balance and hasnt gained any profit whatsoever at this stage.

Assuming again 2% RPI on tarrif - after 20yrs - system will be in profit by ~ £ 8,800, assuming nothing has broken or had to be replaced ( panel or inverter wise ).

ISA Investment calculation;

£ 5,000 @ 2.25% will yield £ 1,018.63 interest profit after 8.3yrs
Invester still retains the initial investment of £ 5,000
Balance @ 8.3yrs = £ ~6,018.63

£ 5,000 @ 2.25% will yield £ 1,591.07 interest profit after 12.5yrs
Invester still retains the initial investment of £ 5,000
Balance @ 12.5yrs = £ ~ 6,591.07


AT 20yr position !
£ 5,000 @ 2.25% will yield £ 1,802.55 interest profit after 20yrs
Invester still retains the initial investment of £ 5,000
Balance @ 20yrs = £ ~ 7,802.55

as ever, it all depends what assumptions you're making when doing your figures. We clearly outline the assumptions we've made and why in all our quotes, give the customers a 20 year performance estimate showing the expected reductions in output, increases in energy costs and FIT etc so they can make their own minds up.

I can't work out what you're basing those figures on, and I've been doing those calculations daily for 3 years. I suspect though that it boils down to what your assumptions are for energy price rises and RPI inflation increases, and based on my in depth knowledge of the UK energy sector, I'm confident that the basis for our estimates is sound, and if anything an underestimate of the energy price rise increases we're facing in the next couple of years and beyond.

But then even on our figures it looks as if you've got a bigger cash balance after 20 years than with the ISA, as well as having a system that will continue to generate significant energy bill savings for several decades into the future, plus probably export payments (albeit maybe with a replacement inverter being needed at some point).

Essentially it is a gamble on energy prices & RPI, but I don't know anyone even vaguely clued up who doesn't think these are likely to rise rapidly for the foreseeable future...

You are right in some respects though in that it's not a sensible investment in all circumstances, the energy savings on site are much more significant than they were, and it's questionable how sensible the investment is if you're not planning to be in the house too much longer (though a decent system should increase the chances of selling the house at a decent price relatively quickly without needing to drop the price etc), and it's not something to invest in if there's any chance you're likely to need to try to draw down on your savings in the next few years.

 

[Earthstore]

It is difficult to accurately calculate 20yr projections for this type of investment, as written before it depends on what assumptions you use, for the RPI you can only really take an average of the past years, but energy prices are probably going to rise more than what the public may believe (this is just my personal assumption on all the research that I have done).

So, instead of trying to compare this with an ISA, which is the only other tax free investment (I believe) that is available to the general public, why not look at this as a completely stand alone investment, IE borrow the money at 4%, get a 10% ROI that then leaves you 6% to pay off the capital, these are just round figures, for an example, and I am sure they can be tweaked a little, not forgetting that the PV system is RPI and energy price linked, and you loan should be at a fixed rate so if this works in year 1 then after time your ROI per year will rise therefore reducing the term which you loan could be repaid.

I hope this helps.

 

[lancselec]

look on the epc register for your postcode see other properties in the street that have an EPC carried out and make an assessment of their EPC's against yours as a quick guide.

 

[john999uk]

look on the epc register for your postcode see other properties in the street that have an EPC carried out and make an assessment of their EPC's against yours as a quick guide.

WOW that is an eye opener!!!! If the surrounding properties are anything to go by (same construction, age etc.) we will have no problems getting a 'D'!
It is interesting to see the different 'assumptions' that have been made and the improvements suggested.
It's a great site thanks very much.

 

[lancselec]

did i mention we are based in preston and can give you a quote for PV

 

[moggy1968]

Now for the supportive maths why you are wrong for this particular example !

Assume an investment of £ 5,000 in comparison in an ISA paying each year 2.25% and a PV system giving an annual return of 2,500 kwhrs against an household useage of 6,000kwhrs @ 12p/kwh no standing charge with full useage of all electric generated with monies paid for 50% export.

The Invester stays at the property 20yrs and useage and generation remains static.

PV calculation;
Assuming no electrical bill saving - system will take ~12.5yrs to pay back alone

Balance of investment at 12.5yrs - NIL !!!!!!

Assume an additional electrical saving on utility bill of £ 200 p/a, add this to fit tarrif revenue, system then will take ~8.3yrs to pay back

Owner of property still has NIL balance and hasnt gained any profit whatsoever at this stage.

Assuming again 2% RPI on tarrif - after 20yrs - system will be in profit by ~ £ 8,800, assuming nothing has broken or had to be replaced ( panel or inverter wise ).

ISA Investment calculation;

£ 5,000 @ 2.25% will yield £ 1,018.63 interest profit after 8.3yrs
Invester still retains the initial investment of £ 5,000
Balance @ 8.3yrs = £ ~6,018.63

£ 5,000 @ 2.25% will yield £ 1,591.07 interest profit after 12.5yrs
Invester still retains the initial investment of £ 5,000
Balance @ 12.5yrs = £ ~ 6,591.07


AT 20yr position !
£ 5,000 @ 2.25% will yield £ 1,802.55 interest profit after 20yrs
Invester still retains the initial investment of £ 5,000
Balance @ 20yrs = £ ~ 7,802.55

RPI of 2% is very unlikely over the next 20 years
you have also failed to factor in fuel inflation. electricity prices have risen over 20% in the last 2 years.
If I put your pricing into a SAP based calculator with 3% RPI and just 5% fuel inflation the total income from PV after 20Years is £15243 which leaves your ISSA a long way behind.
this is based on SAP, all our installations perform 20-30%above SAP.
I also have accountants as customers and they tell me what I already know, PV is a no brainer.
My parents had it put in because their pension investments were only gaining 6%. They can't touch that capital because it provides their income, so why not stick it on the roof and gain 30% instead (they were on the 43p tariff and somehow managed to get a good deal on their installation!!!)

oh, and also the value of an ISSA can go up as well as down, PV tariffs are guaranteed.

Sorry chap, your figures just don't stand up to even basic scrutiny.

 

[danesol]

RPI of 2% is very unlikely over the next 20 years
you have also failed to factor in fuel inflation. electricity prices have risen over 20% in the last 2 years.
If I put your pricing into a SAP based calculator with 3% RPI and just 5% fuel inflation the total income from PV after 20Years is £15243 which leaves your ISSA a long way behind.
this is based on SAP, all our installations perform 20-30%above SAP.
I also have accountants as customers and they tell me what I already know, PV is a no brainer.
My parents had it put in because their pension investments were only gaining 6%. They can't touch that capital because it provides their income, so why not stick it on the roof and gain 30% instead (they were on the 43p tariff and somehow managed to get a good deal on their installation!!!)

oh, and also the value of an ISSA can go up as well as down, PV tariffs are guaranteed.

Sorry chap, your figures just don't stand up to even basic scrutiny.

Firstly IMO RPI will be up and down from now on.... so using 2% is a good estimate, however in general I thought I was been really fair as not only did I not factor in what you mentioned but I didnt factor in any repairs or panel/inverter replacements or the very fact that the panels will degrade over time ( my own panel from Sanyo will be only 80% efficient after x amount of yrs )

Before I go on to enlarge of my calculations, I will say this.........

If the OP has only 5K - its really debatable if its really worth it !

However, if the OP has say 15K - he would be foolish not to put 5K of bling on his roof as he could only invest two lots of ~£ 5K into 2 ISA's ( him & partner ) - whether fixed or variable, so he would maximise on his monies, especially if he was to have at his disposal over 10K to invest each year - this is why investments are so personal to the individual and why this always have to be seen on a case by case basis.

Now to tidy my approx calculations up as according to the Energy Saving Trust ( Solar Energy Calculator / Getting money back / Generating energy / Home (England) - Energy Saving Trust England ) it would appear I have been far too generous with my return for the £ 5K - 3kwhr PV installation, but the figs workout in the end very similar. :laugh3:

Accordingly to them and please try it - it suggests on a 3kw "due south ideal with no shading 30degree slope" system that you would only achieve ( random postcode used for example - PR2 2QB );

Prior to 30April ( generating 2,467kwhr p/a )
Income from FIT - £ 386
Money saved on electric bill - £ 94
Income from grid export - £ 56

TOTAL - £ 531.00 p/a
Total earned over the lifetime of the system - £ 10,510 therefore 5.5K profit over 20yrs

Post 1st May 2013
Income from FIT - £ 368
Money saved on electric bill - £ 94
Income from grid export - £ 56

TOTAL - £ 518.00 p/a
Total earned over the lifetime of the system - £ 10,262 therefore 5.2K profit over 20yrs

( Please note:- again, these "official figs from this website doesnt factor in any repairs or replacements whatsoever !! and states the following;
* The life of a PV system is estimated as 25 years, so these results allow for 20 years of FIT payments and 25 years of bill savings.)

And remember guys if this chap doesnt use a decent sloped mounted frame setup on the flat roof - these figures start to crumble very badly as the angle lowers to zero )

So if you use the official figs given by this official body the payback is even worse than I used !!!

Oh, with regards ISA's - yes they can go down and suppose they may do if the "Bank of England" has its way soon with negative interest rates been introduced.... however someone who looks after their money investments well, would I believe get the best deal for their lump sum year after year after year..........

QED

 

[Gavin A]

the energy saving trust calculator is a complete load of rubbbish as it assumes there will be no inflation and no energy price rises in the next 20 years, which is completely ridiculous, and tbh whoever did that at EST deserves the sack.

I can't be arsed to check, but it's probably also based on SAP 2009 which is around 5-10% below reality for most of the country as it uses 15% inverter losses when the reality now is more like 4-8% unless using really inefficient inverters, and -3% rated panels.

I'd tend to agree with you that if someone has £5k only savings then they shouldn't be spending it all on solar, but if they've got £5k spare on top of savings they need to tide them over in case of redundancy etc then for most people with a decent unshaded roof there is no better long term investment than solar PV, and with panel prices now rising again, and FIT cuts 10 weeks away, there is also no better time than now to invest in it.

 

[Ian-LS]

Just noticed the Energy Saving trust still have an assumed reduction of 3.5% on May 1st 2013. If they were a decent consumer advice website they would have changed this mid February or at on the date OFGEM released there FIT rates for May 1st - June 30th. In addition they haven't updated the May 1st - July 31st FIt period to May 1st to June 30th. No wonder consumers still think there is a FIT reduction on May 1st and the next reduction after that is August 1st 2013

 

[john999uk]

Just noticed the Energy Saving trust still have an assumed reduction of 3.5% on May 1st 2013. If they were a decent consumer advice website they would have changed this mid February or at on the date OFGEM released there FIT rates for May 1st - June 30th. In addition they haven't updated the May 1st - July 31st FIt period to May 1st to June 30th. No wonder consumers still think there is a FIT reduction on May 1st and the next reduction after that is August 1st 2013

That is confusing. When does it go down? Should I be rushing to get it installed before 1st May?

 

[Gavin A]

1st July

 

[moggy1968]

danesol, you can't even get the information on ISAs right for goodness sake!
The maximum that can be invested in an ISA is £11520
No one is suggesting someone spends their last £5000 of cash on solar and if you read the original posters points you will understand why he wants income on his roof rather than savings, because of his particular personal circumstances.
The Energy Saving trusts calculator is not an 'official' set of figures as you suggest. The official figures are the Governments SAP calculator I have quoted above.
You admit RPI will be up and down, but are still assuming an average of just 2% over the next 20 years, which would mean an increase of a minimal magnitude unprecedented in all of time, it's nonsence.
I'm at a loss to explain your arguments as you evidently have solar yourself and yet, asside from the ridiculous financial calculations you have made you refer to it disparagingly as bling, just bizzare.
Your figure for electricity savings is also absolute garbage. My parents 4 Kw system, which is mounted on a flat roof with a frame at just 15degrees is saving upto £40 a month. The 'Official' figures from SAP give a fuel saving more than double that you have quoted in the first year, and I would reiterate that all our customers are producing significantly in excess of SAP(in the south of england admittedly, although the one we have in York is also well above prediction).
Fuel savings will of course increase significantly as fuel prices continue to rise, as they inevitably will but you have chosen to ignore..
You've also failed to recognise the correct rates of FiTS
You clearly have no idea of the maintainance costs of solar, so I shall educate you, as you clearly need it. They are minimal, just a possible refurbishment of the inverter, which, in the case of the SMA inverter you have should be less than half the cost of a new inverter.

I don't know what axe your trying to grind but it really is time to shut up and listen because your just embarrassing yourself in front of a lot of experts in this field.

 

[MicraShed]

Im down the road from you in Preston and had £5k to invest - I intend stopping in my house for at least 10 years, possibly longer (ive been here 20 already!).

I have a 2.5kWp system and collectively since last July its put out 858kWh, (or £180) since September anything that would have been exported has been fed into the hot water tank thanks to the Immersun.

I will say that you DO need someone at home (which we have in our house) to make the most of the energy used during the day, we run things in tandem now, washer, dishwasher, hoover, iron, and so on. Bought a low wattage slow cooker and managed to get daily consumption off the Norweb Federation down at one point in August to just 2kW/day. You do need to think more about how you consume the 'lecky. But having panels and monitoring your use and generation does make you do that.

Production over winter was quite miserable though, and at my present generation its going to take longer than 7 years to payback my investment. Think about your use, research what other people are generating near you and then dcide whether its for you or not. If you are in the 'pool you might want to consider a small wind turbine (though beware BAe & B'pool air will almost automatically object to any planning application for a turbine).

 

[danesol]

danesol, you can't even get the information on ISSAs right for goodness sake!
The maximum that can be invested in an ISSA is £11520

No it isnt - thats including the share addition, which is opening another complete can of worms !!

Lets just keep it against the cash part of one person ISA which this year is exactly as follows;

""For the current 2012-13 tax year, the annual ISA allowance is £11,280, but only £5,640 of that may be used for a cash ISA. From April 6 2013, this will increase to £11,520, of which £5,760 can be put in a cash ISA. ""

 

[danesol]

You've also failed to recognise the correct rates of FiTS
You clearly have no idea of the maintainance costs of solar, so I shall educate you, as you clearly need it. They are minimal, just a possible refurbishment of the inverter, which, in the case of the SMA inverter you have should be less than half the cost of a new inverter.

For the record I consider myself fortunate as I choose to install PV in 2011 and therefore have the post DOS tarriff of 43p per kwh for 25yrs + RPI ( signed and sealed in concrete )!

I selected SMA - due to that very fact - that my replacement costs would be minimal as SMS have a low cost exchange scheme as you probably are aware at approx 300 euros?? so felt that was a no brainer also. I selected HITS for their small footprint whilst still providing high performance

Cost of replacement - 7yrs

What will we make therefore - A fortune !

So for me it was a no brainer - PV for us has been super so far ..... and will hopefully remain so for a further ~24yrs

Would I install PV now, knowing what I know now and having done the sums for us in relative to our heavy electric useage during the day - NO, i dont think so, as the risk is far higher and the overall return - very little indeed

I don't know what axe your trying to grind but it really is time to shut up and listen because your just embarrassing yourself in front of a lot of experts in this field.

I have no axe to grind at all, Im just stating from a personal POV and an educated one that you have to be very very careful with PV installation post DOS day, as there could be better financial options for you !!

You on the other hand are in the trade - so your motives are obvious !

At the end of the day - my rough calculations stack up for this particular thread, others maybe not.