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Eco Deal

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Solar PV still attractive tomorrow!
STA explains value of solar investment to domestic consumers

New calculations show that investing in solar will continue to be attractive for domestic properties despite the reductions in the Feed in Tariff (FiT) tomorrow when the FIT for domestic systems will reduce to 16p and the FIT lifetime will reduce to 20 years. However, the price paid for power exported back onto the grid will increase to 4.5p tomorrow, better reflecting the true market value of locally generated power.

A returns ‘Calculator’ devised by the Solar Trade Association (STA) [1][2] for its members, based on credible data, clearly shows the good returns that domestic customers can expect.

Returns for investors in solar power over recent months have been exceptionally attractive [3] and the rate of solar installations is again on a steady upward trend, after a drop-off in April. The new calculations mean the STA and its members are confident that investment in solar will still be attractive when the Tariffs reduce tomorrow (1[SUP]st[/SUP] August).

The STA Calculator illustrates returns with the following example: for a family installing a large 4kW system in August costing £8,000, using 50% of their power in the home and exporting 50%, the STA Calculator shows the system will have paid for itself within 10 years, with returns of 9.2% over the 20 year life of the Feed-in Tariff [4]. The solar power system itself is likely to last around 40 years providing many years more of household savings!

Householders are advised (for example by REAL) to always get 3 quotes for solar installations as solar prices continue to come down and it may be possible to better the example cited. The REAL Assurance website provides top ten tips for consumers thinking of generating their own energy [5]

STA CEO Paul Barwell said;
"Our figures show that solar is a no-brainer investment. Compared to the returns you can get these days in banks and many other investments, solar provides a very solid and attractive return. That is particularly the case if you consider energy bills are rising faster than anyone expected.

“Investors in solar are also helping us to drive an exciting energy revolution, putting power in the hands of everyday people, while saving the planet."

The STA Calculator is based on the Government's own projected increases in electricity prices and on established national average yields from solar power. In practice electricity prices are rising faster than Government is projecting and power yields from solar in some parts of the country are higher. Consumers who use more than 50% of the power their solar generates in the home can expect higher returns, while returns will be lower for consumers who use less.

Returns are likely to be even better because electricity bills are rising faster than Government figures suggest:

Because solar partly replaces the import of electricity from the grid, this is an important part of the returns calculation [3]. In reality electricity prices are rising faster than the Government data used in STA's model predicts. This means households could save even more money by switching to solar. Analysis of Government statistics by the REA shows that the average annual increase in electricity bills for the period 2005 to 2011 was 6.6% above inflation. While the STA Calculator is based on conservative assumptions, using this real-world rate of increase in electricity prices means returns on the example above of a 4kW system for a family home installed in August, rise from 9.2% to 11.4%, with payback after 9 years.

Paul Barwell said:
“Nobody knows what electricity prices will be in future but we do know they have gone up substantially over the past few years. This trend may well continue as the UK becomes more reliant on importing its energy in an increasingly competitive world.

“Solar gives people the opportunity to take control of their electricity bills and help us move away from damaging fossil-fuel dependence. We believe the smart money is on solar.”

The industry is delighted that the vital role of solar has now been recognised by Government - DECC will be revising their Renewables Roadmap to properly reflect the large contribution expected by solar power in 2020.

ENDS
For further information or to request an interview, please contact:
Leonie Greene, Head of External Affairs, STA, +44 (0)7932 720 091

Notes to Editors
1. The Solar Trade Association (STA) represents companies working in solar thermal and solar power in the UK. Since 2011 the STA has been affiliated to the Renewable Energy Association. Established in 1978 as a not-for-profit trade association we represent a diverse membership across the solar power and solar heating industry. The STA works in conjunction with its members to achieve the right regulatory framework and incentives for solar to deliver an increasing contribution to the UK’s electricity and heating needs. We undertake policy development and provide expert advice and analysis to government departments, agencies, regulators, NGOs and other stakeholders. For more information, see: www.solar-trade.org.uk

2. Households can earn and save money by investing in solar power through a number of factors. Firstly they earn an income from all the solar power they generate from the Feed-In Tariff, whether that is consumed in the house or exported to the grid. Secondly when they are using their own solar power they don’t have to import power from the grid and therefore they are saving on their power bills. Finally, any power exported to the grid attracts a modest export ‘bonus’ payment to reflect its market value – this will be increased in August.

3. Prior to August 1st, all numbers assume 850 kWh/kWp yield per year; 25 year tariff and generation with 50% deemed onsite usage and 50% exported; starting price grid electricity retail at 15p with 2.6% growth above inflation per year (real return used by DECC); numbers represent real rates of return (no inflation), so represent money in today’s terms (NPV). For installations before August the generation tariff = 21p; export = 3.2p; Ongoing maintenance costs for the 25 year period estimated at £2,000 which represents 1%/year on the capital cost of £8,000. Returns for a 4kWp system installed July for £8,000 are 11.8% and the system will have paid for itself in 9 years.

4. In August revised numbers on the example above reflect the fact that the Tariff for domestic systems will reduce to 16p and the Feed-In Tariff lifetime will reduce to 20 years. However, power exported back onto the grid will increase to 4.5p, better reflecting the true market value of locally generated power. For a family installing a 4kW system in August costing £8,000 the average per annum return over 20 years of generation and export, but 25 years of usage is 9.2%. The system will have paid for itself within 10 years. The STA calculator excludes the general inflation rate in its forward price projections to leave a real rate of electricity price inflation.

5. See REAL website at Consumer Guide - REAL Consumer Code
 
P

provr6

"The solar power system itself is likely to last around 40 years providing many years more of household savings!"

How is that the case, as after the Fit period ends you are required to de-comission the system and remove the panels? At least thats my terms and conditions in my FIT contract.
 

Gavin A

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"The solar power system itself is likely to last around 40 years providing many years more of household savings!"

How is that the case, as after the Fit period ends you are required to de-comission the system and remove the panels? At least thats my terms and conditions in my FIT contract.
which company is that with?

that runs entirely counter to the entire ethos of FIT, and would almost certainly be an illegal contract term anyway.
 

Worcester

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@Jason121 how do you mean 10 years is too long? Pay back period?
 

SRE

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Ours are coming from the same direction as MEP is coming across. Fit is a bonus but they want to be more in control of their energy bills. Just quoting tonight for 4kwp on an E/W with a 10 year payback - it's still a good deal.
 

PengEF

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As a customer I agree with SRE. I want more control of my electricity use. Got Solar PV now and happy with it (or would be if it would stop sodding raining :bigcry: ) but now I want more control of all my gizmos and struggling with that. Someone needs to do a decent simple range of easily fit-table consumer energy monitoring/logging devices that allow everyone greater control. We need smart sockets, trailing sockets and other electrical goodies now and not 20 years from now. Ah well back to the search.
 

SibertSolar

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Indeed....we're working on something at the moment that provides "smart power control/switching" and there's only going to be more and more focus, and solutions, around this side of the equation as we move forward I reckon. You've only got to look at the early adopter efforts for excess generation "dumping" to local loads or thermal stores to see that it's a worthwhile battle to find the right solution for the job.
 

PengEF

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Indeed....we're working on something at the moment that provides "smart power control/switching" and there's only going to be more and more focus, and solutions, around this side of the equation as we move forward I reckon. You've only got to look at the early adopter efforts for excess generation "dumping" to local loads or thermal stores to see that it's a worthwhile battle to find the right solution for the job.
It can't come fast enough. I want to log everything so I can turn things off overnight when they are not needed and turn them on when they are likely to be needed. Then obviously if possible detect when noone is in and turn them off again...
 
OP
E

Eco Deal

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why de-comission when your not getting fits payments ????

I think you confused with planning permission to remove asap if they are not in use.

also If you buy quality solar panels they will last 35-40 years.
 
OP
E

Eco Deal

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this was copied for STA .

My payback on our systems are around 6-7 years at 16p and i am selling quality products not a load of trash .
 

jason121

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As a customer I agree with SRE. I want more control of my electricity use. Got Solar PV now and happy with it (or would be if it would stop sodding raining :bigcry: ) but now I want more control of all my gizmos and struggling with that. Someone needs to do a decent simple range of easily fit-table consumer energy monitoring/logging devices that allow everyone greater control. We need smart sockets, trailing sockets and other electrical goodies now and not 20 years from now. Ah well back to the search.
Try plugwise
 

jason121

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Ours are coming from the same direction as MEP is coming across. Fit is a bonus but they want to be more in control of their energy bills. Just quoting tonight for 4kwp on an E/W with a 10 year payback - it's still a good deal.

What make of equipment do you use
 
OP
E

Eco Deal

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Panels = Yingli or Panasonic
Inverter = Steca 3600 , SMA or Solar edge.

anyone can sell cheap materials to offer low prices but we have decided to sell quality products so our customers have a system they can trust.
 

jason121

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Looks like on here we are all using the same quality equipment
How do we compete with prices of £6400 or less on 4kw
 
OP
E

Eco Deal

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because like we said

spend 6400 on cheap panels and an installer who will ride off into the sunset. (look at all the problem post from people who have bought CHEAP systems bet they all poly with a cheap inverter)

or spend a few quid more on TOP quality trusted brands that will last a lifetime with an installer that cares about their customers.
 

Gary K

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norwich
"The solar power system itself is likely to last around 40 years providing many years more of household savings!"

How is that the case, as after the Fit period ends you are required to de-comission the system and remove the panels? At least thats my terms and conditions in my FIT contract.
I shouldn't worry about that- given the current climate theres not alot of chance that the company will be around in 2 years never mind 25!!!
 
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SRE

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Looks like on here we are all using the same quality equipment
How do we compete with prices of £6400 or less on 4kw
You don't - it's all about customer confidence and customer care. Our customers call us at stupid o'clock and are prepared to pay for it. Our customers are becoming our friends. It's a different service.
 

Worcester

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@Jason121 golden rule is don't compete on price, everyone needs to at least have some basic sales skills. Last year it was different, most of the installers were just order takers. I'm not saying you need to be a snake oil person, however you do need to understand your clients needs, and to help them understand why YOU are the one that can do that for them.

In simple terms to survive you will need sales and marketing skills.


I did suggest this to people last year and got roundly thrashed ... but then in July last year I also warned people of a scheduled price drop in January to 26p and got laughed at as well. We planned for it in September, and planned for the continual drops during this year back in January, so far our plans are paying off. - we identify the customers needs and shown them how we are the ones to help them achieve that - Read Neil Rackham's book 'SPIN Selling' (thats not the Gordon Brown / Blair version of SPIN :) ) and Michael Port's book 'Book Yourself Solid'
 

PengEF

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Try plugwise
Not seen that one before jason21. Thanks. It doesn't look bad but they are not quite there yet. Plugging lots of their "circles" in would work but will be ugly as sin. Does do probably a lot of what I want though.
 
A

Algy

because like we said

spend 6400 on cheap panels and an installer who will ride off into the sunset. (look at all the problem post from people who have bought CHEAP systems bet they all poly with a cheap inverter)

or spend a few quid more on TOP quality trusted brands that will last a lifetime with an installer that cares about their customers.
I've no doubt that most installers on here do care and won't be riding off into the sunset just after the system goes up. Nevertheless, just how many installers are going to be trading as the same outfit for the full 25 years if anything goes wrong? In practice, given all the variables involved in continuous trading in the same field, good installers are nearly as likely to be doing something different in a few years as bad ones. Of course, a competent installation is less likely to present problems than those slung up by the cowboys, but I suspect that the public understands that a full 25/20 year guarantee is likely to be illusory from any trades people. The bottom line is that most people don't have the knowledge to judge who are the decent ones and who are likely to be still around amongst all the unfamiliar names that have sprung up in this relatively new commercial field, so for many the whole thing is something of a gamble and lower prices are likely to be the main driver in their decisions.
 
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