My solar PV first year payback calculation

Mcfi5dhc

BFG wrote: »

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??

Either you missed my opening posts, or your calling me a liar, anyhow...

I will put all my figures on a spreadsheet and post it, but before I do, I think we need to agree some assumptions must be used (for example how we think energy prices will rise and fall).


BFG & fellow Solar Sceptics, please let me know what would be your assumptions on the following for say the next ten years or so:

• Electricity unit costs
• Maintenance
• Degradation of panels
• Residual value of panels
• Plus anything else I have missed

This will be my calculation, based on my figures (equally happy for anyone else to do theirs as well). As stated earlier, I did not have masses of savings, so I will not need to calculate the loss of interest, but you can put a long term projected return rate on savings, and I'll try and build it in.

There are clearly two PV sides here, but remember, both sides are in the MSE team - we are allowed to work together

Oh, and handbags down please

(I've just read bmbyker's post who was obviously typing at the same time as me - thank you for your comments. This will be an opportunity to see if the sceptics can back up their claims now, if they want to)

Cardew

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!

This is a money saving website, so surely it makes sense to post an accurate financial appraisal.

As you say most of your friends, and probably many on this forum, are interested in how much money they can potentially save.

Obviously, even if it is not an economically sound decision, there are other 'green' considerations that may make solar attractive to them.

So without getting emotive, let us consider some of your points.

The sum 'considerably over £7500' that you invested and got only £35 interest makes no sense. Nationwide and other banks are offering 5% for long term fixed savings.

So £7.5k invested at 5% gives £375 pa, then compounded year on year..

Notwithstanding the sensible points made by sdooley above, you simply cannot ignore the interest you lose on capital in any financial calculations.

Especially as many will be borrowing money for the instalation

There is very probably going to be a requirment for maintenance of the solar system. Whilst the panels themselves may be extremly reliable, there is less certainty about all the rest of the system; if it was that reliable, why only a 2 year guarantee?

The panels need cleaning.- clambering on the roof is not a job many would relish.

bmbyker

Actually I meant £35 a month so thanks for that. I have kept a pretty keen eye on the panels and they appear to 'self clean' rainwater seems to wash off all debris. I too wouldn't relish climbing on the roof.

Anyone is welcome to my minimalist spreadsheet. It shows our energy usage so far, Mcfi5dhc's spreadsheet on the other hand is awesome. Everyone should be keen to use less energy and that's how I have approached this.

There are some intagibles as well. We are much more aware of our usage both for individual systems (PC) or systems as a whole (AV). It didn't occur to me that the main PC we use during the day which has a pretty decent PSU uses 120 Watts constantly and once the LCD Monitor is on too it jumps to 200 Watts. However the speaker system just consumes 2 watts on top! If people want the spreadsheet as I said in an earlier post please ask.

My view on guarantee is that the installers want their cut. The manufacturers offer a much longer one. It was probably the same in the early days of double glazing, now who worries about warranty?

Take the spreadsheets. Look at the figures then we can all discuss the good and bad points of the figures.

albyota

I have used the thanks button a number of times within this thread for some great info and advice, it is such a shame there isn't a 'sodoffgetalife' button for the sceptics, I too have ASHP, RWH, and am currently looking into the PV panels and I agree with the vision of energy costs rising year on year, which will shorten the ROI on PV or ASHP boilers (350% efficient), and most certainly HIPS will push the property into A rated therefore should sell easily, all this while people running round seeing if they can max out their gas boiler to 91.5% efficiency.........come on! well done bmbyker and
Mcfidhc well done.

BFG_2

If by sceptic you mean someone who doesn't merely accept the gospel according to the fruitcakes, and instead seeks to scientifically test the claims made by woo-woo merchants, then I'm proud to be a sceptic.

If 'alternative energy' fans aren't careful they'll start to get the same reputation as 'alternative medicine' fans.

Seriously, this is a money saving site and we have people posting saying things like 'I don't care if I'm wasting my money, it's what I want to do'.

Science is about putting forward a hypothesis and then testing it in every possible way. If someone has a strong belief and case for solar then they should be happy to have people ask for the data to back up the claims; instead we see a pattern of 'I don't care, I'm saving money', repeated as a mantra.

A spreadsheet is a great start. Now all we need are figures from real life users.

BFG_2

bmbyker wrote: »

You are hung up on the wrong stuff. .

What, like evidence or saving money or being able to 'do sums'???

What's the right stuff - feeling smug because I'm wasting money?

I'm happy that you are happy to not be bother about ROI etc; I wish I was that rich.

albyota

BFG, I would like to ask you a question, do you know daily/weekly how much it costs to run your house, i.e. evergthing... heating, Hot water, lighting, telly AV, computer, washing machine etc..etc.? I mean to the penny, as this is a money saving forum, I try to encourage energy saving, energy efficiency, without being ripped off, I agree Solar thermal (water) , e.g 45p or so to heat a tank of water at an average installation cost of £2600 has a payback of nearly 16 years, I would advise against this. However, with Solar PV the supply and install prices will come down and with feed in tarriffs at 36.5 pence per kilowatt generated on an 1800 kw system, you would get about £650 back per year from your energy co. if the cost of this PV array was £8500 installed, and after an LCBP grant of £2500 is £6000 then at my dumb maths surely this is about a 9 year payback if energy costs stay the same, if they rise the payback will be less. also extra money can be got from ROC's which can be sold on. the figures I have used are from costs I have got so far from 2 companies quoting. I happen to be able to buy the 185 watt panels for less than £430 each, so there is still a large markup on the installations. however to be able to get the grant and the grid connection you have to buy through accredited and MCS approved companies, and so the cost goes up.

BFG_2

albyota wrote: »

However, with Solar PV the supply and install prices will come down and with feed in tarriffs at 36.5 pence per kilowatt generated on an 1800 kw system, you would get about £650 back per year from your energy co.

.

Thanks albyota for some 'proper' figs.

I would say that WHEN supply and install prices DO come down, then it might be worth going solar, but until then the advice for most people must surely be.....

Don't listen to the scamming supply and install companies [unless you have a spreadsheet handy and can check...]

Mcfi5dhc

BFG wrote: »

[unless you have a spreadsheet handy and can check...]

Well lets build it then!

Could some Solar-Sceptics please provide some info they would like to go into to it? For example, if the £7500 was in savings accounts, what long term rate would they get? Would they pay tax on it? Are we assuming they are dipping into it every month or quarter to pay their electric bill? If not, we need to assume they are paying the bill by some other means. So therefore, how much would actually get compounded (if any!)

I'll quite happily do 50 spreadsheets, but I think we need an agreed base to start off with.

M

Cardew

albyota wrote: »

However, with Solar PV the supply and install prices will come down and with feed in tarriffs at 36.5 pence per kilowatt generated on an 1800 kw system, you would get about £650 back per year from your energy co. if the cost of this PV array was £8500 installed, and after an LCBP grant of £2500 is £6000 then at my dumb maths surely this is about a 9 year payback if energy costs stay the same,

Without getting into an argument, this is how you illustrate your "dumb maths";)

If you spend(or borrow) £6000 for a PV array you simply have to take the cost of borrowing that money, or loss of interest, into account in payback times.

£6000 invested at 5% means £300pa gross interest compounded. You cannot ignore this figure and quote a 9 year payback time.

It is like saying if I take out a £100k mortgage and pay back £10k a year I will have paid the mortgage off in 10 years.