FB
your a long standing appreciated member to the forum, when other consumers come on here your input from customer to potential customer is vital. keep up the good work, We have had a recent customer cash in there ISA and invest in solar they didnt see the point in it as the ISA wasnt producing for them.
For an average customer, medium to large solar arrays can still make sense and is worth looking into.
Admittedly my lack of margin of safety was because I'd be on a 14.5p FiT for going into 4-10kW band. Most people would be on 16p FiT.
Since I have already cut my electricity bill almost by half, I definitely can't cut it by an equal amount again, so my potential bill savings would have been less too. Maybe half of the remaining half of my electricity bill - but I still need lights on after dark when the solar is not producing.
So with my FiT being about 10% less than <4kW installations, and my extra bill savings probably no more than 25% of electricity produced, I'm at a disadvantage to the average customer - especially given the apparently high prices charged by solar installers near Cambridge.
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I also prefer to work on assumptions of inflation at its historical average (about 3.5%) and electricity price rises at a similar level or perhaps slightly more - say 3.5-5%. These are much more conservative than many, but in our topsy-turvy world, who knows what the future will bring - therefore long-term projections can end up being for comedy value only and can be ridiculously wide of the mark. Remember in 1999 when the average stockmarket investor was expecting 15-20% annual average returns and planning retirement accordingly? Remember stocks and shares ISA's allowed to use 7-9% growth projections, which have more recently been reduced to half that in recognition of the way the world has changed.
Forecasting is difficult - and more so the longer the timeframe.
However, with governments in serious debt, we may eventually see them print their way out of debt (less offensive to print and devalue than to default), with excessive money printing resulting in a sharp drop in the value of money (i.e. dramatically rising prices). This happened in the late-1970's, with inflation well into double-digits.
On the other hand, Japan's post-1989 bubble burst has seem them with negligible inflation, and on-off mild deflation for two decades and counting.
So where do we go from here? What projections should we use? I suspect the answer goes back to moggy's suggestion of a high FiT rate for just a few years, in order to quickly reach payback and reduce the uncertainty which surrounds a long-term payback.
