Free solar power system. Is it a scam?

beedydad

As I have informed before I have just picked up this article from US stanford Uni - very interesting indeed.

This is why people should be careful to enage in long term commitments such as these so called "free" solar PV kits over 25 years!

Why? when this could be happening within next decade!

Go to: news.stanford.edu/news/2010 then look up: August//new-solar-method

I am not allowed to show this as a link so have split it up to show where to look up!

Seriously very interesting
Regards

Antispam

http://news.stanford.edu/news/2010/august/new-solar-method-080210.html

I heard about that solar panels can be more efficient with a new process which is also cheaper which that article I believe refers too

Jon_Tiffany

beedydad wrote: »

To Jon tiffany "They will have to wait 25years to see that £15,000 profit, so its not as good as you make it sound. "precious roof space"? - most people dont do anything with their roof space, why is it so precious?

If its such a great deal for ASG then there's nothing to stop you going to the bank, borrowing the money and making that £15,000 profit for yourself. "

NO - they do not wait 25 years - they make money on a consistant yearly basis.

I would expect their breakeven point is around 7 - 8 years.

Its a pure financial commerical business plan dressed up into the "green" arena to create a smokescreen and !!!!! your environmental consciences!!!

Regards

It will still take the full 25 years for them to see the whole £15,000 profit - if that is even the figure they will make, could be more, could be less.

While they will have an income from day one, the business will make a loss for many years before entering into profit.

Dont forget that they will pay tax on their profits (when they eventually make some) so some of the money will end up back with central government. They also had to borrow the money so they need to service the debt and pay interest on the loan.

A business that takes 7-8 years to break even is not lucrative, like some people are making out.

And yes, of course its a commerical business? I dont imagine for one second they are doing it just for the fun of it.

I dont see why you refer to a smoke screen, when the ASG employee was posting on here she was very open about what they were doing. There is no secret about how they intend to make a profit.

beedydad

Hi Jon

I was not referring to any particular company or whether it is a "smokesreen" as you put it.

What I am referring to is that the companies are commercial businesses and are there to make a profit as soon as possible. It maybe 7 -8 years to make a profit - i actually think it will be sooner - if you know the actual price of the PV kits and cost of installation - I do have a very good idea of wholesale/net prices.

I note that more companies are trying to get on the bandwagon - it must be good!!

BUT - what about the customer? I just believe that the customer should get a greater slice of the profit/cake. I have suggested a way by getting actual rental income over the 25 years - thereby it does not break the bank for the installing companies and perhaps adds 1 year before they make a profit.

I strongly believe in solar as one of the means for future "greener" energy production. I just think that serious care should be taken over the real monetary benefits that the householder gains - which must be over and above a bit of "free" energy - that these companies are offering.

I would hate it to all fall apart in a year or 2 when householders realise that actually they are not gaining as much as thought.

The other point is if the business model goes pearshaped and the company goes bust what then?

Finally - as has been eluded to what if better solutions come along in the next few years that superceed these?

Regards

Jon_Tiffany

Its fully expected that better solutions will come along. If you install a sub 4kW PV system today you will get 41.3p on the generation tariff. In 2013 you will only get 37.8p, 2014 you get 34.6p and so on. The reducing tariffs are there to prevent the scenario where no one installs the panels becuase they are always waiting for the better/cheaper panels.

If the company goes bust then whats the worst that can happen? You have never paid any money so you cant lose. You might even get to keep the panels for free.

beedydad

I actually menat people who take up the scheme now and then in a year or 2 or 3 find out it does not pay upm as much as thought!

This sort of scheme works now due to the highest level of FIT - as you point out in 2 and more years the start of FIT reduces so unless the capital cost of solar PV panels drops commenserate to the reduction in FIT then I think they will stop this offering - they will say something like ..." we now have enough customers"

In regard to the last point about going bust - if they do then there will be creditors whom will chase after any assets of the bust company - that will I would have thought would be all the solar PV kits sitting on all the roofs. They will at least want them back - or request a financial settlement with the householder!

Regards

Jon_Tiffany

beedydad wrote: »

In regard to the last point about going bust - if they do then there will be creditors whom will chase after any assets of the bust company - that will I would have thought would be all the solar PV kits sitting on all the roofs. They will at least want them back - or request a financial settlement with the householder!

Regards

Any creditors will find that if they remove the panels they will have very little value. The value of the panels is as installed and functioning panels, so I would imagine that a creditor would want to continue with the scheme. A creditor could ask the homeowner of they wished to purchase the panels, but this would have to be at a very reduced price. As a homeowner you would be in the best position - you still couldn't lose out.

When the FIT scheme was designed they had to make a guess at what would happen with technology and prices over the next 25years. Its hard enough to predict prices in years time, let alone 25 years.

What you need to answer is "Will prices drop at a faster or slower rate than predicted by the FIT scheme?"

quoia

For anyone not keeping up with the very latest on this whole Free Solar Panels thing now that there's 2 threads on the go .....

... I posted this earlier on the other thread

quoia wrote: »

I'm surprised nobody has mentioned the article on the front of Thursday's Daily Express

http://www.dailyexpress.co.uk/posts/view/191224/Energy-1bn-solar-giveaway/

I've done a thorough search and can't seem to find any reference to it on these existing FREE Solar Panel threads (or anywhere else) - except the company is mentioned (albeit in passing) in this MSE article ...

http://www.moneysavingexpert.com/utilities/free-solar-panels

BUT FROM TODAY - HOMESUN - are commencing the installation of 100,000 PV Solar systems

YES - ONE HUNDRED THOUSAND SYSTEMS over the next 3 years

A £1bn solar give-away

https://www.homesun.com

Systems 3.5kW to 4kW

quoia

Just an update - I've been reading some of the info on https://www.homesun.com and there IS something different about their terms regarding the installation as opposed to ASG or ISIS Solar ... (unless I missed this in the small print or discussions so far)

... it seems to offer the "best of both worlds" to some degree.

Firstly, if your roof doesn't fit the "totally free specifications" then there is an option to "buy" a smaller system for just £500 with a £5 per month charge for "Solar Care"
This means that you still may be able to get a system even if rejected by ASG or ISIS

BUT that wasn't what caught my eye - the "best of both worlds" ?

If you qualify for a free system it is all but the same as the others - 25 years - all costs repairs maintenance etc. covered - you get as much of the free electricity that you can use and they get the FITs ..... BUT.....

... once it is installed and running if you want to change your mind - in as much as you wished you had bought the system yourself and were getting the FITs yourself (perhaps 5 years after installation your great-aunt Bessie has left you £10,000 in her will) YOU CAN BUY YOURSELF OUT OF THE CONTRACT AND THE ENTIRE PV SYSTEM IS YOURS.

You then start claiming the FIT's and 3p Export Tariff for yourself

as it says on their website in FAQs



How can HomeSun afford to reduce the cost of solar so dramatically?
In April 2010, Government introduced new laws requiring energy companies to pay for the renewable power generated by homes. These are called Feed-in Tariffs (or FiTs). It’s all part of the drive to reduce carbon emissions in the UK – a staggering 27% of which are produced from homes. With FiTs an average home could save/earn around £1k per year (look under ‘FiTs’ and Buy Solar on the site to find out more). Over 25 years, the homeowner could earn 5%-8% return. Fantastic but the homeowner still has to find the £11k upfront cost of a solar system, and be in it for the long, long term. The way HomeSun’s business works is that we fund the solar installation. Homeowners gets free electricity from the sun instantly and starts reducing their electricity bills; HomeSun receives the FiTs to recoup its investment and make a sustainable profit. If at any point, the homeowner wants to buy out of the contract and take the FiT contract, they can – there are no penalties, it’s just a straight line depreciation from day 1 to the end of the contract. Simple. We think that makes a great partnership.

"A straight line depreciation from day 1" ?
So if it costs £11,000 to install and in 25 years there are 9130 days then the opt out cost gets cheaper by £1.20 every day - about £8.50 per week, about £36.67 per month or £440 each year.
Not bad I suppose - allows you to swap your options any time in the 25 year period or perhaps someone who would like to buy your house but want's the FITs etc for themselves. Might make selling easier if there were difficulties.

tantriclady

Just to play devils advocate here - I have a small swimming pool and so the free solar panels would be invaluable in allowing me to heat my pool (even by a small amount) in the summer as currently it has to hit 25C air temp for at least 4 hours to be comfortable enough to swim. That's very good (and if I get my pals to donate a £1 a swim, I'll make some money too).

Also I think the panels will increase the insulation on my roof in the winter so aiding heat retention.

Iwould get an electric hot water system, so it would store hot water overnight, giving me a warm shower in the morning in the summer.

In the winter I can heat by wood burning stove in my house as it has poor insulation generally (nothing can be done about this) but this aids heat conductivity throughout the house even if it's lost quickly to the outside world. I assume I could still have Tarrif 7 elec for my immersion heater/washing machine etc.

Shame I don't have an electric car to charge in the day and scoot round at night!!

All I then need to do is buy a few freezers and cook up foods during summer and put in freezers for winter (the old harvest method), of course freezers use hardly any elec when full. I jus then heat up by microwave. Food is also cheaper when growing your own in summer.

All I then need to do is work in winter (so I'm not home much) and stay home all summer (in my pool and growing my veg!) - sounds like a pretty eco lifestyle and an enjoyable one.

Would I get in trouble with the free solar PV company for using (like mad) all my electricity and not exporting much? Do you think that's what the Germans have done? What with sauna's, jacuzzi's etc?

I'l find a way of cheaply storing my summer elec (even if I have to "pre-cook" wood with the electricity so it burns easier in winter or something like that!)

Don't laugh, I might have stumbled onto something" lol