Free solar power system. Is it a scam?

Cardew

Nice post noncom.

My understanding was that cheap loans would be provided, or at least underwritten/subsidised, from the public purse; and my comment was based on that understanding.

My calculations suggest that a Solar PV system, over the long term, should make an income which is greater than the rate of interest my mortgage company charges me.

We discussed at some length your predictions and calculations in the other thread so no point in repeating them; if you are correct, then what is the problem? Banks and Building Societies will loan the money; if you have sufficient equity in your house! They will lend you money to install anything you want in your house provided you have sufficient equity. In essence a standard second mortgage, or loan secured on your house.

Would you be confident that they will lend you the money at a reasonable rate if you have no equity?

I think it best to stick to money saving issues in this thread, rather than address the 'Green' points you make in the last couple of paragraphs.

SarahLou

Thanks for the info about that noncom - I shall Google that term later. Sounds like a rather wise idea to me. Hope it comes to fruition!

noncom_2

Hi Cardew

I think the suggestion that PAYS loans would be made or underwritten with public money was only one of the options. As I understood it, private companies may be involved also, but at the moment detail is so hard to come by it is impossible to tell what will eventually happen (if anything).

I have confidence in the calculations we discussed in the other thread regarding my mortgage and the Solar PV payback. In fact, I am soon to contract an installer to go ahead on the basis of that confidence. I am lucky, however: I do have significant equity in my house and can use it to make the investment. In speaking of the PAYS scheme, I was hoping to be helpful to SarahLou, who was suggesting that she could not afford to do so.

From my calculations (which are of course debatable in many ways, based as they have to be on quite a few assumptions) I would suggest that commercial companies WILL be happy to make loans to homeowners without equity based on the FITs income. They would of course want some assurances that Governments will commit to FITs for the long term ie a guarantee that future Govts cannot just scrap them.

With regard to your last point, I agree to an extent that this is a "money-saving" forum, but this is also a "Green and Ethical" sub-section, which implies that the issues discussed reach further than the simple mathematics. Just because I am interested in saving money, that does not mean that I have no other competing interests such as ethical or social beliefs. This forum should be about balancing the different motivations, which means (to some degree) including the ethical debate. Even setting that aside, I would argue that in simple economics, the case for green technology is made if you accept that present policy is unsustainable (just as selling the family silver may be look like a wonderful revenue stream so long as you ignore that it won't last for long).

Regards
Andy

SarahLucyD

noncom wrote: »

They would of course want some assurances that Governments will commit to FITs for the long term ie a guarantee that future Govts cannot just scrap them.

Nomcom - why would the Government scrap the FIT Scheme it when it's not actually being funded by the Government - it isn't coming out of their 'coffers' is it? The Government isn't funding it, they merely initiated it. It's the power companies that are paying the tariffs. If the Government scrapped it they would open the floodgates of litigation from thousands of microgenerators who relied on the legislation that they passed this April, which modified the conditions of electricity supply licences.



Sarah - A Shade Greener

Cardew

SarahLucyD wrote: »

Nomcom - why would the Government scrap the FIT Scheme it when it's not actually being funded by the Government - it isn't coming out of their 'coffers' is it? The Government isn't funding it, they merely initiated it. It's the power companies that are paying the tariffs. If the Government scrapped it they would open the floodgates of litigation from thousands of microgenerators who relied on the legislation that they passed this April, which modified the conditions of electricity supply licences.



Sarah - A Shade Greener

Agreed.

The only modification to the scheme I could envisage would be if the Government decided that the 'levy' which all of us pay for FITs was getting too large.

They could reduce(or suspend) FITs for future applicants. That could even happen if new technolgy drastically reduced the price of panels.

However I cannot believe that they would ever renege on those who installed under present regulations.

I did read that this is indeed what has happened in Germany - the FITs were even more generous and they needed to curtail the number of installations.

SarahLucyD

Cardew, I agree that they could reduce or suspend FITs for future applicants, but I think we're miles away from that yet - compared with what happened in Germany, I reckon that the the UK's solar installations will still be a flea on a cow's bottom in comparison, even if we fit our target of 6000 homes. IMO there is still a dearth of general awareness of the FIT Scheme, AND I don't see any sign of any reduction in prices of anything - rather the opposite! That's mainly due to the fact that there are only a handful of manufacturers who have had their panels MCS approved (many others missed the deadlines this year - you're probably aware of that - caused huge problems)

Sarah Dyson - A Shade Greener

lar316

A friend of mine at work has had these free solar panels fitted and is extremely happy with them. I was gutted when i couldnt have them fitted as i dont have a south facing roof. Just to confirm, this isn't a scam.

noncom_2

FIT income is currently untaxed. They could change that, which would make a significant dent in the payback calculations. I don't think people who'd invested would have much of a case - it would only be like scrapping tax-relief on ISAs (or going back a few years, MIRAS).

Mind you, I for one am hoping they don't.

Cardew

Sara Dyson,

It is appreciated that your business model will be 'commercial-in-confidence' (although if you post full details here we won't tell anyone;))

However is it possible to reveal what repairs/replacements/servicing costs you envisage over the life of the system.

Also do you take any steps to get panels washed; or rely on rainfall?

SarahLucyD

Cardew I aim to be as transparent as possible but obviously there are some things that are commercially sensitive but anwering your questions doesn't infringe on anything sensitive. Basically we expect to replace the inverter at some point and we have also built into our business model the system being entirely out of operation at least twice throughout the 25 year term for a minimum period of 3 months each time - this is to enable the householder to do repairs to the roof etc or renovation works. This will only happen rarely but the fact is that we have provided for this instance on every install - that is a significant sum out of cash-flow and will more than cover the repairs/replacements/servicing costs that we envisage. In any event we fully believe that the export tariff (which we have opted to be paid as a straight 4% of the generation tariff) will cover general maintenance. As regards getting the panels washed, they are self cleaning so yes we will generally rely on rainfall but as we monitor each system on a daily basis we will know when they dip below what is acceptable and this will trigger us to physically check the panels and we'll know then if they need a clean or not.

Sarah - ASG