Free solar power system. Is it a scam?

John_Pierpoint

Wonderful........forewarned is fore-armed.

The "welding shop" does not have three phase. It just enjoys a supply over 100 yards or so of oversized overhead aluminium wire.

I did have to play detective a few winters ago when my 1960's earth leakage circuit breaker started dropping out, for no apparent reason.
I noticed that 08:00 - 08:30 seemed to be a favourite time and Sundays seemed to be trouble free. I worked out that it was the turning on of the compressor in the welding shop that caused the breaker to drop out.

During the autumn the combine harvester driver had miscalculated and scraped through the cable running to earth from the neutral of the two wires coming across the field from the transformer.
So on a Sunday and wearing rubber gloves, I climbed up to the broken cable, carrying an off-cut of copper pipe packed with "no-corode" battery terminal petroleum jelly. I slid the two broken ends of the earth cable into the pipe and then hammered the pipe flat.

Problem solved.

John_Pierpoint

Anybody recognise what sort of transformer is pictured below.

Anybody know if PV electricity can flow backwards through that beast.

(It looks like it has leaked oil over its capacity plate at some stage)

BTW there are no overhead wires to that pole, I think putting the transformer up there is just a cheap way of getting it out of harms way.

John_Pierpoint

John_Pierpoint

Zenoka wrote: »

I've just put our details into that calculator, some of the figures are a bit scary!

Is electricity really going to cost £1.09 per unit in 25 years? That will mean our bill will be around £5,000 a year!:eek::eek::eek:

It also uses 13.9 per unit for this year, isn't that a bit high? We pay less than that and I've heard some people with Ovo? are only paying around 7p a unit?

I find it most shocking how fast they predict prices are going up! I wish DH wages would go up that fast

I've got one of those old fashioned calculators where you can put in the guessed rate of increase and then multiply by the current price, then simply hit the " = " key and count the number of times.
(don't forget there is 5% VAT on the electricity bill).

So I put in 1.10 x 12 pence and after 23 years (hits) I was up to a figure close to 1.09 GBP per unit - such is the wonder of compound interest.

Now is this a realistic figure, who knows?

It is here that I differ from Cardew's analysis. If you have money in cash you are at risk from a deficit government that will try to inflate its way out of the mess we are in.
You are being taxed at, shall we say 5% taxation-by-inflation, or call it 5% taxation by printing money.
Power is, up to now, a finite resource and as more and more of the world's population wants more and more power, then prices are likely to rise, faster than a lot of other commodities. So a real rise of 5% per year does not seem unreasonable to me.
On the face of it, being offered 41.3 pence per unit tax free with a built in guaranteed increase of as much as 5% a year could be a no brainer; but in a dozen year's time the price of 75 pence per unit won't look so far out of line as 12 pence versus 41.3 pence does now.
[Perhaps the dreams of covering the Sahara desert with PV-panels will come to pass and we will all migrate to Southern Spain, the new equivalent of living in an oil state such a Dubai?]

Cardew

John_Pierpoint wrote: »

I've got one of those old fashioned calculators where you can put in the guessed rate of increase and then multiply by the current price, then simply hit the " = " key and count the number of times.
(don't forget there is 5% VAT on the electricity bill).

So I put in 1.10 x 12 pence and after 23 years (hits) I was up to a figure close to 1.09 GBP per unit - such is the wonder of compound interest.

Now is this a realistic figure, who knows?

It is here that I differ from Cardew's analysis. If you have money in cash you are at risk from a deficit government that will try to inflate its way out of the mess we are in.
You are being taxed at, shall we say 5% taxation-by-inflation, or call it 5% taxation by printing money.
Power is, up to now, a finite resource and as more and more of the world's population wants more and more power, then prices are likely to rise, faster than a lot of other commodities. So a real rise of 5% per year does not seem unreasonable to me.
On the face of it, being offered 41.3 pence per unit tax free with a built in guaranteed increase of as much as 5% a year could be a no brainer; but in a dozen year's time the price of 75 pence per unit won't look so far out of line as 12 pence versus 41.3 pence does now.
[Perhaps the dreams of covering the Sahara desert with PV-panels will come to pass and we will all migrate to Southern Spain, the new equivalent of living in an oil state such a Dubai?]

Unusually, I can't understand the points you are making.

Firstly what does this mean? "So I put in 1.10 x 12 pence and after 23 years (hits)I was up to a figure close to 1.09 GBP per unit"

If we take the present price of a kWh as 10pence with inflation each year @5% in 25 years a kWh will cost 33.86pence. So where does Zenoka's £1.09 and £5000 annual bill come from?

Secondly, what analysis of mine do you disagree with?

John_Pierpoint

Hi Cardew,

My example of 1.10 is a ten percent rise that is a real 5% plus an inflationary 5% caused by debasement of our currency. I've started from a unit price of 12 pence including the 5% VAT.
So compounding we get 12 then roughly 13.2 14.5 16.0 17.6 19.3 21.3 23.4 25.7 28.3 31.1 34.2 37.7 41.4 45.6 50.1 55.1 60.7 66.7 73.4 80.7 88.8 97.7 107.5 118.2 130,0 that is 25 years later.
Meanwhile the FiT is going 41.3 & roughly 43.4 45.5 47.8 50.2 52.7 55.3 58.1 61.0 64.1 67.3 70.6 74.2 77.9 81.0 85.9 90.1 94.7 99.4 104.4 109.6 115.1 120.8 126.9 133.2 139.85 so 25 years later the owner of the panels is only getting the market price
Mind you by now the panels might be scrap and I wonder what will have happened to the price of new panels and inverters; hopefully they will be coming down in real terms. The dividend might be thought of as the tax free 3p on exported units and the saving on the used-on-site units.

You tend to use the compound rate for electricity; I think the day time rate for an economy 7 tariff is more realistic as EDF (Electricity de France) and Centrica are hell bent on building the new generation of Atomic Power Stations and you cannot turn those things off; meanwhile the Russians will be holding us Europeans to ransom during day light hours, while we all swelter in the effects of global warming caused by all that coal the Chinese are burning?

In some of your calculations you assume that a real return on savings is possible. Historically if one gets a real 2% on a fiat currency one is doing pretty well. At the moment we are probably getting a real minus 2% - minus 4% depending on the savings rate for a deposit of 15K and the marginal tax rate of the investor.

As I see it: do I want to leave my grandchildren the interest on 15K towards their University fees in 20 years time or the income from a roof covered in PV Panels ?

John.

Cardew

Hi John,

You should go into politics with the ability to 'fudge' figures like that!!!

Firstly, of course money in the bank, even with compounded interest, will not do much more than retain its buying power in real terms. That said it is easy to get 5% gross for safe long term investments(4% after tax) and that figure has always beaten inflation in recent years and is forecast to do so in the future - and compound interest helps as well.

If you believe that there is going to be 10% inflation on fuel prices year on year - so be it.

I am not sure of the relevance of this discussion to the 'Rent a Roof' thread; but if buying a system, surely it is best to look upon the investment as a form of annuity?

Zenoka

Cardew wrote: »

If we take the present price of a kWh as 10pence with inflation each year @5% in 25 years a kWh will cost 33.86pence. So where does Zenoka's £1.09 and £5000 annual bill come from?

Hi, it was from a calculator that someone else posted a link to:

http://www.solarguide.co.uk/solar-pv-calculator?sc_formtype=3#factors

It shows 109.96p per unit in 25 years, that would make our bill around £5,000!!!! That cant be right can it?

I see that Eon have just announced that they are putting up prices by 9% :eek::eek::eek:

How can they get away with it?

Why is it always blamed on the price of oil? Surely the middle east are just ripping us off? They are just holding back the supply to push the prices up. Yet again us Brits are being ripped off by forgien companies! No wonder we have such massive debt and are broke :mad:

Gizmosmum_2

Zenoka wrote: »

Hi, it was from a calculator that someone else posted a link to:

http://www.solarguide.co.uk/solar-pv-calculator?sc_formtype=3#factors

It shows 109.96p per unit in 25 years, that would make our bill around £5,000!!!! That cant be right can it?

I see that Eon have just announced that they are putting up prices by 9% :eek::eek::eek:

How can they get away with it?

Why is it always blamed on the price of oil? Surely the middle east are just ripping us off? They are just holding back the supply to push the prices up. Yet again us Brits are being ripped off by forgien companies! No wonder we have such massive debt and are broke :mad:

Try this - it's a bit more realistic and you can play with the figures more easily. http://www.reuk.co.uk/REUK-Feed-In-Tariff-Calculator.htm

Gizmosmum_2

John_Pierpoint wrote: »

:rotfl::rotfl::rotfl::rotfl::rotfl: