Solar Power - always a scam??

Lokolo

To be fair it really depends where the solar panels are planted....



The differences can be quite siginificant in some places.

If you live in a sunnier area then the payback period will be a lot less too....

But then again, it electric prices end up going up a lot over the next 5-10 years then you'll be rolling in it.

Over time, with lack of natural resources, renewabal energy will be a lot more attractive.

Cardew

A_fiend_for_life wrote: »

Here's an economist / journalist case study:

http://www.guardian.co.uk/money/2009/may/09/green-your-home-solar-panels

Payback according to this one is about 10 years. I've not worked through his calculations though.

Given that the system is guaranteed for 25 years and energy prices look likely to increase it would seem a reasonable investment. ROCs contribute to some of the payback and feed in tariffs will too as soon as the government pulls their finger out.

There is some pressure to pay FITs for all energy generated rather than excess. Good for those with PV but a bad idea for encouraging energy efficiency amongst PV owners. Free money for those that can afford it?

Another point on FITs is they will be quite high to start with favouring early adopters but will reduce over time as PV becomes more affordable favouring later adopters. A bit of a crystal ball exercise.

The rising cost of energy is a double edged sword for PV I suspect.

Might be best to compare the UK and German markets to determin the optimum time for PV.

For low consumption households who have the cash up front and intend staying put I certainly think they are worth it. Generally the more excess that can be generated the better so they favour multiple panels. ie 16 to 24 k :eek: thats a lot of credit card tarting.

Just a few points on his figures.

He paid £17,000 for his system. (he got an £8,500 grant) even he admits that with the grant reduced to £2,500 now the cost after grant for such a system would be £12,000. as prices have reduced.

He uses a figure of 14p/kWh when calculating his savings - 10p/kWh is easily obtained.


He quotes a figure of 0.1% interest on invested funds. Well it is easy to obtain 4% to 5% for fixed term investments. Nationwide currently offer 4.15% for a 5 year fixed term. So he conveniently ignores in his calculations the interest he loses on removing £12,000 from savings.

£12,000 invested realises £500pa and don't forget this interest is compounded. So after 5 years it is producing over £600pa. That alone makes his asumptions on payback time a nonsense.

He states no maintenance is required. However unless these panels are cleaned of all the bird droppings and grime that they attract, the output falls off.

Clambering on the roof is not a task many of us relish.

Ben84

CFC wrote: »

Thank you. It just shows up the government- euro scam about boilers. The cost of central heating has shot up since the regulations changed - and although the government trumpets that these boilers will save you money, it just shows what a scam it is.

If you're expecting the boiler and installation to pay for itself entirely in reduced gas usage then you're expecting quite a lot, and it's not really reasonable as a complaint as the government aren't advising these boilers are installed to save money where a safe and functional boiler is already in place. However, the new energy efficiency regulations do mean that in new houses/installations and replacements that a high efficiency boiler is installed. The extra cost above replacing with a non-condensing boiler varies, but is roughly in the order of a few hundred pounds perhaps. In exceptional cases where it would add greatly to the costs non-condensing old type boilers are still allowed if an exemption is asked for.

The energy savings totally depend on the boiler being replaced, so I'm not taking the figures mentioned here without any background as the best estimate, but it's worth mentioning most the boilers currently reaching the end of their useful life are from the 70s/80s and are generally little more than 70% efficient (some are much lower due to poor design or being worn out). Most households in this situation can expect to cut easily 20% or more off their heating and hot water costs. The few extra hundred for the condensing boiler will be easily paid back in almost all cases over its life. Even where a very modern boiler is installed, condensing ones are about 10% more efficient and eventually should pay back in their useful life time.

However, raising the minimum efficiency isn't all about saving money. It's also about saving gas and pollution. The UK has signed up to the Kyoto Treaty and pledged to cut its CO2 emissions greatly, and if we don't we will pay a big penalty fine. Also, the number of winters in the past decade that the UK has been dangerously close to exhausting natural gas reserves (even with emergency measures such as shutting down gas power plants) have been worrying. Considering these two problems, it can't be ignored that domestic boilers emit the majority of most household's CO2 and are all turned on at the same time in cold weather causing big spikes in gas demand.

Cardew

Ben84 wrote: »

If you're expecting the boiler and installation to pay for itself entirely in reduced gas usage then you're expecting quite a lot, and it's not really reasonable as a complaint as the government aren't advising these boilers are installed to save money where a safe and functional boiler is already in place. However, the new energy efficiency regulations do mean that in new houses/installations and replacements that a high efficiency boiler is installed. The extra cost above replacing with a non-condensing boiler varies, but is roughly in the order of a few hundred pounds perhaps. In exceptional cases where it would add greatly to the costs non-condensing old type boilers are still allowed if an exemption is asked for.

The energy savings totally depend on the boiler being replaced, so I'm not taking the figures mentioned here without any background as the best estimate, but it's worth mentioning most the boilers currently reaching the end of their useful life are from the 70s/80s and are generally little more than 70% efficient (some are much lower due to poor design or being worn out). Most households in this situation can expect to cut easily 20% or more off their heating and hot water costs. The few extra hundred for the condensing boiler will be easily paid back in almost all cases over its life. Even where a very modern boiler is installed, condensing ones are about 10% more efficient and eventually should pay back in their useful life time.

Ben84,

If we keep to the finance, I would take issue with you about the cost of a boiler being "roughly in the order of a few hundred pounds perhaps." This has been discussed many times in the Utilities forum.

Below is an extract from a post I made.

Also that there is very little to go wrong with the old type boiler, but plenty to go wrong with the modern condensing boilers that are stuffed full of electronics and it seems that 10 years is a reasonable life expectancy.

The Royal Institution of Chartered Surveyors stated recently :

The average cost of installing one of these modern boilers is £1,720, but saves on average just £95 off people's gas bills." See:

http://www.telegraph.co.uk/news/ukne...erts-warn.html

Even in these days of very low interest rates it is possible to get 4% to 5% on long term fixed savings(Nationwide offer 4.15%) so on £1,720 you will get £70 a year compounded.

As stated in the quote above, it is the poor 'life expectancy' of modern boilers that concerns many people. The very best guarantees are for 5 years(most are 2)

The printed circuit boards cost £hundreds to replace and I understand that Servicing packages like the expensive BG Homecare scheme, exclude the heat exchanger.

Despite being an above average gas user, I will soldier on with my 21 year old boiler until it dies.

Ben84

I'm talking about the difference in cost between a non-condensing boiler and a condensing boiler, not the total cost of the whole thing.

As for saving the cost of a new boiler in the bank, that makes perfect sense until your boiler breaks and can't be fixed, then you probably will want to buy a new one.

Non-condensing boilers are pretty expensive too, but generally they're a few hundred pounds less than the condensing ones.

The extra cost incured by raising the minimum efficiency of boilers isn't the total cost of a condensing boiler, it's the cost of a condensing boiler minus the cost of a non-condensing boiler.

When replacement boiler time comes around you would still have to find the cost of a non-condensing boiler if the new minimum efficiency legislation hadn't been enacted, so it makes reasonable sense to remove this figure from the calculations of what it's actually costing you.

Cardew

Ben84 wrote: »

I'm talking about the difference in cost between a non-condensing boiler and a condensing boiler, not the total cost of the whole thing.

As for saving the cost of a new boiler in the bank, that makes perfect sense until your boiler breaks and can't be fixed, then you probably will want to buy a new one.

Non-condensing boilers are pretty expensive too, but generally they're a few hundred pounds less than the condensing ones.

The extra cost incured by raising the minimum efficiency of boilers isn't the total cost of a condensing boiler, it's the cost of a condensing boiler minus the cost of a non-condensing boiler.

When replacement boiler time comes around you would still have to find the cost of a non-condensing boiler if the new minimum efficiency legislation hadn't been enacted, so it makes reasonable sense to remove this figure from the calculations of what it's actually costing you.

However as you said above regulations are such that, in practice, all new boilers are condensing boilers unless an exemption is allowed. Do you know which firms still make non-condensing boilers?

My point was that in money saving terms it generally doesn't make sense to replace a working boiler, even with low efficiency.

Also, to repeat myself, it is the complexity and limited life span of condensing boilers, that I consider to be the biggest deterrent.

Altarf

Bongedone wrote: »

For instance an A rated condensing boiler runs at 92% efficiency.

Only in laboratory conditions. In 'real life' in the UK the efficiency of an A rated condensing boiler is much lower.

Ben84

Cardew wrote: »

However as you said above regulations are such that, in practice, all new boilers are condensing boilers unless an exemption is allowed. Do you know which firms still make non-condensing boilers?

My point was that in money saving terms it generally doesn't make sense to replace a working boiler, even with low efficiency.

Also, to repeat myself, it is the complexity and limited life span of condensing boilers, that I consider to be the biggest deterrent.

I don't know if any company are still making them, but Baxi were still selling back boilers quite recently when we looked in to a replacement for our old one. They even still use the Baxi Bermuda brand name and have the charmless cermaic grill in a teak case! It's all a bit antiquated. I wouldn't be surprised if the remaining non-condensing boilers are old stock. Not many are needed now.

As for replacing an old boiler that works well, as far as I'm aware the government and their various energy awareness groups have never advised that we should do that, so I have no idea why people like the poster I was first replying to believe we're being 'scammed' in to replacing them for energy savings. They cost a little more, but save about £100 a year in the average house and this should in most cases mean that you end up saving money - provided you were going to replace the boiler anyway and energy savings were not the reason for replacement.

As for life span, I hear it's not so good as it used to be, but we have yet to put the latest generation condensing boilers that are being installed now to the test. I can't say for sure that they won't still be working in 20 years time, we will have to see. However, the average boiler life span has been going down it seems, but I suspect some of the new names in the business are not selling such good products. Most all the long lasting reliable old boilers that are still in use were made by a few big names like Baxi and Gloworm, we didn't actually have a big selection of names to buy from until a few years ago. If I was buying another one I'd stick to a well known name. They always used to make the good ones, so hopefully they still do!

Cardew

Ben84 wrote: »

As for life span, I hear it's not so good as it used to be, but we have yet to put the latest generation condensing boilers that are being installed now to the test. I can't say for sure that they won't still be working in 20 years time, we will have to see. However, the average boiler life span has been going down it seems, but I suspect some of the new names in the business are not selling such good products. Most all the long lasting reliable old boilers that are still in use were made by a few big names like Baxi and Gloworm, we didn't actually have a big selection of names to buy from until a few years ago. If I was buying another one I'd stick to a well known name. They always used to make the good ones, so hopefully they still do!

Like so many products these days with takovers of firms etc, there is so much 'badge engineering' that, say, a Baxi or Gloworm of yesteryear could be any type of boiler with their nameplate stuck on the casing.

In any case I suspect that many of the parts are 'bought in' items - I can't see many firms making their own electronic circuit boards for instance.

Anyway we digress. Getting back to Solar IMO at present prices it is simply not viable.

I can't see solar hot water ever making financial sense, PV might if future technolgy makes the panels much much cheaper, and the Government can stop the Solar cowboys scamming the Great British Public as they have ben doing for years.

A_fiend_for_life

Cardew wrote: »

Just a few points on his figures.

He paid £17,000 for his system. (he got an £8,500 grant) even he admits that with the grant reduced to £2,500 now the cost after grant for such a system would be £12,000. as prices have reduced.

For people considering a PV system it might be worth keeping an eye on this especially if the grant is going to be removed as suggested in the article but should also consider the decrease in price. There might be an optimal time to grab a grant and get high feed in tariffs.

Cardew wrote: »

He uses a figure of 14p/kWh when calculating his savings - 10p/kWh is easily obtained.

Agree.

Good Energy pays 15p per unit for all electricity generated. So you have your cake and eat it. So per unit would be the cheapest rate 10p plus the 15p feed-in tariff plus ROCs per MWh at £70. This would bring him around £885 per annum though offset compared to a savings account. Reinvesting this should give a reasonable return.

The meter readings are submitted every six months so a slight delay compared to putting it in a savings account. Not sure how long they take to credit the funds. ROCs I'm guessing are annual (though paying them at each MWh generated would be better).

Assuming the economist reinvests the feed in tariff, ROCs and money he would have spent on electricity, giving the same standard of living, in a 4% savings account he would have the same balance after 14 years, around £14,000, assuming all benefits and costs remain the same and £8500 system.

A slightly higher insurance premium to cover a damaged panel and potential loss of incentives should also be factored in. This gives the PV-owning-economist the same standard of living as being an A&L invester and of course reaching break even sooner with the delayed savings account. What the PV owner does lack is a deeper emergency fund.

From the Good Energy site (note there is no mention of cost for buying units.):

1. With HomeGen, you can have your cake and eat it. We pay you 15p for all the units you generate - even the units you use. Not only are you saving money by buying less electricity, we pay you for using the electricity you generate.

2. We keep it simple. We don’t ask you to install an export meter which may cost you extra. Just read your total generation meter twice a year, send us the readings, and we pay you - it couldn’t be simpler.

3. 100% renewable. Any electricity you buy from Good Energy to top up your own generation is as green as it comes. In fact Good Energy is the only company in the UK to supply 100% renewable electricity and nothing else.

http://www.goodenergy.co.uk/how-to-go-100-green/generate-your-own/home-generation/


Current funding payback for the economists system.

Based on £12,000 cost, 4% interest, and a flat rate for ROCs (total £210) and energy (feed in plus what he would have spent) at 25p kWh I get £885 per annum. Reinvested PV earnings surpass savings in year 22. (Assuming no interest in the first year)

Year 17 is break even for 30p per kWh and above assumptions.

At 5% interest and 25p and 30p I get years 24 and 19 years respectively to be on par with the savings account.

With ROCs removed this would be longer. For the £12,000 system including £2,500 grant and no ROCs would need around 51p FIT on all energy generated based on 2700 kWh per annum to achieve the 15 year break even point on savings.

So price needs to come down a fair bit. We probably have problems in manufacturing, import costs, skilled installers and possibly lack of competition. If ROCs are removed and the suggested price of 27p or 28p for feed in tariffs is brought in I suspect feed in tariffs might need to increase to increase PV demand.

Far better might be a modest grant and a lower feed in tariff I suspect.

(Alternatively providing solar PVs as a service rather than a good would encourage installers to cherry pick the best sites and negotiate an agreed consumption level. They could also install multiple panels a bit closer to trade prices and reduce installation and transport costs.)

I've ignored the changes in interest rate, energy prices and feed-in tariffs.

The beauty of the good energy system is that it doesn't matter how many people are in the household so long as you can keep below your annual consumption and assuming feed-in and paid for tariffs are the same price. The down side is it doesn't encourage energy saving as much as an exclusively feed-in tariff.


(I've commented on these afterward to keep the above together.)

Cardew wrote: »

He quotes a figure of 0.1% interest on invested funds. Well it is easy to obtain 4% to 5% for fixed term investments. Nationwide currently offer 4.15% for a 5 year fixed term. So he conveniently ignores in his calculations the interest he loses on removing £12,000 from savings.

Cardew wrote: »

£12,000 invested realises £500pa and don't forget this interest is compounded. So after 5 years it is producing over £600pa. That alone makes his asumptions on payback time a nonsense.

Agree. Admittedly this is more than a little biased considering he's an economics journalist.

Cardew wrote: »

He states no maintenance is required. However unless these panels are cleaned of all the bird droppings and grime that they attract, the output falls off.

Clambering on the roof is not a task many of us relish.

Agree. I'd have seagulls and city centre grime to deal with on a two story block of flats.