My solar PV first year payback calculation

Cardew

Ergle wrote: »

Apologies - ROI was the wrong term to use.

Regarding performance - Mcfi5dhc generated more than his supplier estimated - but I've knocked 100 kWh off the annual generation estimate to be on the safe side
This makes the simple payback 14 years.

Regarding the life of the installation - I believe manufacturers are offering 25 year warranties on the PV's. The vulnerable part is the inverter, and this has been factored in. I think a 25 year life for the whole installation with a couple of inverter changes is a reasonable estimate.

I work at home, so will use about half the output during daylight hours.
Playing around with the figures - over 25 years the FIT would need to be 60p to equal the return on a long term investment at 5%, which I guess is why the Germans get higher FiT's than our proposed figure.

It may be worth if if I can get the installation for £2,000 or so less - but otherwise it isn't looking quite as good as it did.

Mcfi5dhc has 8 v 180W panels(1,440W) and generated 1,186W in the first year.

Have you been following the thread about the company fitting systems for free? It would appear from Sarah's statement that their business model will show a profit on an 'FIT' of 28p/kWh.

They don't get a grant of £2,500, give away the electricity consumed in the house, insure and maintain the systems.

Well the only way that business model would work is to install the systems at a fraction of the costs we are being quoted by the solar industry.

So your remark of getting a system installed for £2000(£4500 with grant) is the sort of figure that I think is realistic to make the system viable.

Ergle

I've followed that thread as well. I guess as installers they can put the systems up as cheaply as possible. If their business model is viable then that would be an indication that there are big margins in the quotes I've been receiving. Maybe the FiT's will be higher than the 36.5p recommendation, and they've had a steer on that from the DECC.

The price of electricity is going to rise sharply over the next few years;
1. We're going to be buying a few new nuclear power stations
2. We are moving more towards importing gas
3. We will be paying subsidies, through FiT's and the like, to encourage an additional 10% of our nations electricity from renewables. This is a legal obligation on the UK.




My guess is that all these costs are going to appear in our electricity bills, and that the real cost of power, excluding inflation, will be 50% higher than today within 10 years.

Cardew

Ergle wrote: »

I've followed that thread as well. I guess as installers they can put the systems up as cheaply as possible. If their business model is viable then that would be an indication that there are big margins in the quotes I've been receiving. Maybe the FiT's will be higher than the 36.5p recommendation, and they've had a steer on that from the DECC.

The price of electricity is going to rise sharply over the next few years;
1. We're going to be buying a few new nuclear power stations
2. We are moving more towards importing gas
3. We will be paying subsidies, through FiT's and the like, to encourage an additional 10% of our nations electricity from renewables. This is a legal obligation on the UK.

My guess is that all these costs are going to appear in our electricity bills, and that the real cost of power, excluding inflation, will be 50% higher than today within 10 years.

From reports I have been reading, the proposals for FIT rates - up to 36.5p have been accepted.

No doubt that our electricity rates will rise a great deal in future years as the FITs and RO subsidies are to be paid for by a levy on electricity prices; and that will be on top of any increases in the costs to generate 'normal' electricity.

Incidentally looking at prices of Solar PV panels in the USA the going rate for panels made by Sharp is as low as $2.70/W - £1.65/W. So the price for just the panels for your 1,700W system would be £2,800. That is an awfully lot of money left over to pay for the electronics, fitting and PROFIT.

There is a firm advertising 'Made in China' panels for £1/W for bulk purchase.

ChocClare

My husband is reading this over my shoulder: he is an electrician, thinking of putting solar PV into our house, and his question to you all is:

How do we know we are not going to end up having to pay tax on what is effectively a source of revenue (feed in tariff) thus effectively lengthening the payback time?

Fred_Bear_2

Ergle
I'm very interested in your plans. Did you have a choice of energy supplier and equipment manufacturer? Two other points:
1. I have entered your figures into my spreadsheet and I get a break-even point at just over 12 years which compares to your 13.1 years. However, you need to take into account the loss of interest on savings which then gives a break-even point of 16 years.
2. Could you tell me what is the generating capacity of your panels (in W or kW) I am not clear from your previous posts. Mcfi5dhc has 8 x 180W panels(1,440W) and generated 1,186kWh in a year.

Fred

Ergle

Fred
There are plenty of approved suppliers to choose from.
If you or anywone else would like a copy of my excel spreadsheet email me ergle@ymail.com.
The generating capacity I am looking at is 1.7kW - this being the most that will fit onto the roof.

Fred_Bear_2

Sorry to labour the point Ergle, but are you saying that your suppliers are estimating an annual output of 1700kWh from a 1700W system? That seems high to me.
Thanks for the spreadsheet offer. I shall email you later.
Fred

Ergle

Fred - they suggest that I'll get 1600 kWh from a 1.72kW system

cepheus

It seems that if photo-voltaics can even nearly work in Cheshire then they should be currently viable in Southern Europe at present prices, especially for powering air conditioning units.

I'm afraid I'm still sceptical of micro-generation for the UK. I think that large scale deployment and HVDC linking of Wind on Coastal Europe and Solar in the South of Europe might be a better strategy.

Mcfi5dhc

cepheus wrote: »

I'm afraid I'm still sceptical of micro-generation for the UK. I think that large scale deployment and HVDC linking of Wind on Coastal Europe and Solar in the South of Europe might be a better strategy.

Good point

No doubt your solution above would work, and would be very very green. Both boxes ticked.

But then you have to back to square one - why do people have microgeneration fitted? To be green 100%? Then, yes, your model still works and people could stay as they are.

But, to become more independant, to not pay out your hard earned monthly pay to the big companies, to be a bit green, to not be in the palms of the shareholders of the big companies, a bit of energy security and independence - all of the above are reasons why people go for microgeneration, hence why the micro route works.

MG works because someone can go out, buy enough equipment for their house, pay it off however they want, and enjoy cash free electricity for 20+ years (hopefully) - I know, because I have done this.

Arguements will go on for years about payback and ROI, and maintenance and so on, but fact is, I've bought them, they work, they're paid off and thats done it for me - no more bills for 20 years or so, and thats a nice feeling.

M