My solar PV first year payback calculation

BFG_2

So the key question on everyone's lips is.....Is solar a sensible decision or not [from a financial POV]????????

Mcfi5dhc

BFG

All things considered (and I have considered the loss of interest on my savings, as well as everything else), for me solar PV is a sensible long term financial decision.

I am so pessimistic about other companies, I just believe all the big power companies will just bolster their fat pensions by unjustifiable yearly increases. Equally, the banks will screw you for the interest you should have earned anyway.

So, with a little hard overtime graft (I have paid off almost all my solar debt now), I have reduced my bills for the foreseeable future.

So much so, I'm about to buy some more panels - though this time I'm going for an ambitious semi-homemade one. I'm from the Homer Simpson school of DIY though, so don't expect any updates for the next few months on that!


With my Mystic Meg hat on, I believe the following will happen over the next ten years or so:

• Govt heavily taxes dirty electricity
• Govt closes existing power plants, forgets the timescales for opening new ones, we get screwed
• Price of solar PV will drop
• Electricity and gas prices will rise above inflation
• Banks screw us all on interest rates

If I am right on just a few of these, then payback will get better and better.

I haven't lost out though. Cardew, and others have said about the loss of interest on my savings. I didn't have any savings assigned to this, I had other savings happily paying me interest though. I had a grant, which clearly didn't cost me anything. The remainder of me paying back my panels has been done with doing overtime which I wouldn't have done without the panels. So, a couple of hundred hours overtime over the last year or so (and the next few months), and I have got cheap electric for the next 20 years or more.

If I get any electrical faults which I have to pay for, I'll take it on the chin, but I reckon I'll still be saving in the long term.

Thats me done

Mcfi5dhc

BFG_2

Thanks for your own personal POV and experiences.

I'm not going to try to 'deconstruct' your case, but rather I'd again state that it appears that solar doesn't stack up financially...........

I'm happy to accept that it MAY make sense in the future for more people [if energy costs goes up by inflation plus xx% every year, AND costs of eqpt crash], but until then I'd be advising people not to touch it.....


......unless anyone knows different

karie

albyota wrote: »

Karie, I'd be very interested to find out the exact route the MCS / LCBP grant is likely to take i.e. if you can get the grant this year, (or wait till April 2010) £2.5k or 50% whichever is lower, and whether the FIT's are payable as you say or have to pay the grant back clause like you suggest..

hi albyota, sorry it took me a couple of days to reply, completely slipped my mind until today.

LCBP grant seems in fact to be fine for residential installations. It would only have to be paid back in the case of new non-residential installations.

i can provide you with the link if you need it.

bmbyker

"but until then I'd be advising people not to touch it....."

Wow, there's a statement. To get financial immediately, Right now the Goverment are almost paying you to install it, my £7500 has given me £2500 back. I had savings, I was earning £35 a month - it's a joke. Now I am generating electricity which is definitely mitigating my cost! I am not expecting to get my investment back anytime soon, but that's not the only point. I am saving money, the technology does work and in the long term I do expect to break even and maybe even make a little money.

The only 'gotcha' seems to be that you must be south facing.

Everyone who has POV will be paid next year by HMG to generate regarless of usage - I'll take that!
I use less electricity - I'll take that!
My money is now put to better use, than earning miserly interest - I'll take that!

My only dissapointment is that you have to have a supplier registered with the LCB to get the grant, when from what I saw, DIY could be done here. I have moved from a PV 'have not' to a 'have', it's working for me and that's from my own personal experience.

I say go for it, maintenance free technology that doesn't depreciate like a car and saves you money!

sdooley

> However in any calculation of pay back time, you cannot ignore the lost interest on the capital invested.

I think this is wrong. That would imply that any return less than the rate of interest would mean the PV panels never pay for themselves. Plus the cash you hold may lose value due to inflation as quickly as it gains value due to interest being paid. To play devil's advocate, you could equally state that in any calculation of payback you should calculate the increase in the value of the house (which could result in an instant "payback time").

A better argument is that you should discount the future cash-flows, to take account of the time value of money over time. However as a simplistic 'is it worth it' calculation "it'll pay for itself in 10, 20, 30 years" (ignoring interest etc) is useful as it certainly shows up that reduction measures (low-energy lightbulbs, efficient boilers, insulation) pay for themselves far quicker (often in under 2 years!) and are better from an environmental point of view than home generation measures. So you can work out what to do first and, if you have the cash, do more advanced measures later.

BFG_2

bmbyker wrote: »

"but until then I'd be advising people not to touch it....."

Wow, there's a statement. To get financial immediately, Right now the Goverment are almost paying you to install it, my £7500 has given me £2500 back. I had savings, I was earning £35 a month - it's a joke. Now I am generating electricity which is definitely mitigating my cost!


I am not expecting to get my investment back anytime soon, I say go for it, maintenance free technology that doesn't depreciate like a car and saves you money!

Could you just share your costs and savings figures with us all, so that we can see your logic???

I'm not sure you've done them correctly [hence asking to see them]

Eg: your 'investment' in solar [cf the bank] needs to pay you back the capital as well as the interest you've given up ie you no longer have the £7500 in the bank, so solar needs to pay you back 100%+bank savings rate% ROI over the lifetime of the eqpt.

I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

maintenance free...i don't think so

there are better things to do with your money.

bmbyker

BFG wrote: »

Could you just share your costs and savings figures with us all, so that we can see your logic???

I'm not sure you've done them correctly [hence asking to see them]

Eg: your 'investment' in solar [cf the bank] needs to pay you back the capital as well as the interest you've given up ie you no longer have the £7500 in the bank, so solar needs to pay you back 100%+bank savings rate% ROI over the lifetime of the eqpt.

I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

maintenance free...i don't think so

there are better things to do with your money.

Hmmm..

Let try the figures first. The cost was £7500, HMG gives me back £2500... So we can see already one third repaid. I am paying less to the Electricity companies whilst I generate so a cost saving there, quite considerable over time and they pay me even more next year! I was earning £35 on a sum considerably in excess of £7500 so interest is laughable. I also believe I have increased the value of the house in excess of the cost so as a previous poster mentioned I could be in possesion of 'instant payback'.

You seem to miss one of 'my' main points. I am mitigating my costs or is that not clear? I never went in to this expecting payback in full, although who knows - only time will tell. You offer judgements based on what, your own experience with this technology or just what you 'feel' is the case?

My daily figures and those of the other posters clearly show a reduction in energy usage. I use less, I save more. I am actually happy to have spent my money on this technology, and judging by the interest shown by friends etc many other people are keen to explore it too. I don't mind being ahead of the curve, if that is the case. I would be more inclined to understand your view if you had the technologies yourself?

So to sum up, I have ASHP, RWH and PV. I wouldn't go back at all. They all work and are all saving me money!

BFG_2

bmbyker wrote: »

Hmmm..

Let try the figures first. The cost was £7500, HMG gives me back £2500... So we can see already one third repaid. I am paying less to the Electricity companies whilst I generate so a cost saving there, quite considerable over time and they pay me even more next year! I was earning £35 on a sum considerably in excess of £7500 so interest is laughable. I also believe I have increased the value of the house in excess of the cost so as a previous poster mentioned I could be in possesion of 'instant payback'.

You seem to miss one of 'my' main points. I am mitigating my costs or is that not clear? I never went in to this expecting payback in full, although who knows - only time will tell. You offer judgements based on what, your own experience with this technology or just what you 'feel' is the case?

My daily figures and those of the other posters clearly show a reduction in energy usage. I use less, I save more. I am actually happy to have spent my money on this technology, and judging by the interest shown by friends etc many other people are keen to explore it too. I don't mind being ahead of the curve, if that is the case. I would be more inclined to understand your view if you had the technologies yourself?

So to sum up, I have ASHP, RWH and PV. I wouldn't go back at all. They all work and are all saving me money!

I truly find some of your statements to quite bizarre.

Figures: you've spent £5000 and 'are mitigating your costs'....I'm not sure how much you're 'mitigating' by [ie making savings on fuels costs], could you tell me?? Then I see if it makes sense.

I'm not denying that using solar will 'show a reduction in energy usage' [that truly would be crazy], I'm just asking by how much??

You say "I never went in to this expecting payback in full"...in which case I'd say as long as you know you're wasting it, you're welcome to waste your money however you want; just please don't tell me I don't know what I'm talking about, when you're patently the one who makes decisions on a non-sensible basis [imo]. try and apply a bit of scientific process to your posts and thoughts, rather than woo-woo.

I don't need to have the stuff installed or have used it [turn the tap, flick the switch?] to be able to do the figures and see that it doesn't make FINANCIAL SENSE to go solar at the moment.

At the risk of repeating myself .......... I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

I'm genuinely keen to see your calcs as I have yet to see a single solitary case of solar with a worthwhile ROI/payback....unless anyone knows different??

bmbyker

Sad, so sad. You are hung up on the wrong stuff. I do not intend to get into this any more with you. The original post was all about first year payback. Interesting stuff it was too. I hope that I am able to achieve the first posters figures. As to the rest of it, you are just all about the figures, no true experience at least you don't admit to any. You make me feel we should still have a man with a red flag in front of the car!

Let's make this clear. I am not interested in ROI. Never was, never will be. It's my money and I spend it how I feel, I'll send you 50p for a red flag.