Feed In Tariffs(FIT) Announced.

savemoney

It mentioned on BBC working lunch today that if you move the new owners will still benefit from the tariff.

kkjamor

For people who installed before July 2009 and only qualify for the lower rate FiT - You can sign a petition here to help campaign for a change in legislation.

http://www.goodenergy.co.uk/?page_id=6286

Thinkabitlonger

Mcfi5dhc wrote: »

Renewable equipment will always be sellable, albeit not always near the price you paid, but it isn't hard shifting equipment. Plenty of offgridders would love a cheap supply of PV, also, ebay buyers abroad.

New equipment only qualifies for Feed in Tariffs. Not second hand. It will become difficult to shift, and only be worth peanuts. Off grid microgeneration equipment differs from grid connected, different inverters for a start. ebay buyers abroad unlikely to be interested due voltage differences and haulage costs. Value still close to nil. Scrap or spares.

Back to the houseseller scenario (which I'll be testing out soon when I get enough cash together to move up the ladder!):

House up for sale for £120,000 with say £5,000 FIT-enabled equipment:
Buyer: How much is the house for sale?
Seller: £120,000
Buyer: I don't want the panels, how much is the house without them
Seller: £120,000
Buyer: Yes, but I'm not paying for the solar PV, how much without them
Seller: Its £120,000 with or without them, so £120,000.

The mortgage lender ultimately decides what a house is worth. If they think microgeneration equipment is an asset, they will lend, but what they think it is worth and what you think it is worth may be a long way apart. Only time will tell.

You can always take them to your next house where you WILL get the reduced level FIT, but it will be at the lower rate then of 9p a unit

I have re-read the DECC document "Feed in Tariffs, The Governments Response to the Summer 2009 Consultation." Nowhere does it say that you can move your microgeneration equipment from one house to another and get FITs at the reduced rate of 9p per unit. Can you let me know where you found this information please?

If you buy a house with a conservatory and a prospective buyer doesn't like it, they can't really say, "Oh knock £20k off the price, I don't do conservatories". The house price when valued will include the conservatory price, as it will with a PV house. Normal negotiations will happen of course, but until it actually happens, no one knows

.

Conservatories are well understood by the public and mortgage lenders, microgeneration equipment is not yet as accepted. As you say at the end, no-one knows. All I am trying to say is consider this all carefully. It is by and large very expensive equipment that may very well become almost worthless should you have to move within a few years of it being installed, or should the Government have one of their all too frequent attacks of interfering with things.

Mcfi5dhc

Thinkabitlonger wrote: »

New equipment only qualifies for Feed in Tariffs. Not second hand. It will become difficult to shift, and only be worth peanuts. Off grid microgeneration equipment differs from grid connected, different inverters for a start. ebay buyers abroad unlikely to be interested due voltage differences and haulage costs. Value still close to nil. Scrap or spares.

A quick search on ebay will see panels selling for good money - you may well be right about the invertor though.

Thinkabitlonger wrote: »

The mortgage lender ultimately decides what a house is worth. If they think microgeneration equipment is an asset, they will lend, but what they think it is worth and what you think it is worth may be a long way apart. Only time will tell.

Spot on. But as virtually no one will lend 100% now, I don't think this is so much of a problem. The lender will lend a percentage of what they think the house is worth, and they may, or may not include the panels/turbine etc. They certainly will not refuse to lend on a house that is generating income!

Thinkabitlonger wrote: »

I have re-read the DECC document "Feed in Tariffs, The Governments Response to the Summer 2009 Consultation." Nowhere does it say that you can move your microgeneration equipment from one house to another and get FITs at the reduced rate of 9p per unit. Can you let me know where you found this information please?

Search for "ROO-FIT" on the decc website. Its not just my interpretation of it, but others as well (on other renewable forums). They have a flow chart which shows if you have equipment not fitted by MCS approved people, it can be eligible for RO's, and therefore be moved to reduced level FITs. Have a look on Navitron forum as well.

Thinkabitlonger wrote: »

Conservatories are well understood by the public and mortgage lenders, microgeneration equipment is not yet as accepted. As you say at the end, no-one knows. All I am trying to say is consider this all carefully. It is by and large very expensive equipment that may very well become almost worthless should you have to move within a few years of it being installed, or should the Government have one of their all too frequent attacks of interfering with things.

The government does interfere! But they have guaranteed solar FIT for 25 years, and the rest for 20 years.

noncom_2

I've been trying to do the sums on installing Solar PV, and concluded the following....

Using what seem to me to be reasonable assumptions about future inflation (2%pa), decrease in efficiency of the panels (1%pa) and mortgage interest rates (5%), I compared the benefit of £15k worth of Solar PV (with all the Generation / Export Tariffs) against taking that £15k and paying a chunk off my mortgage.

At the end of 25 years, I worked out that around £33 - 34k of income from the Solar PV is reasonable, whereas reducing my mortgage saves me about £18k over the same period. However, if I assume that at the end of 25 years the Panels have reached the end of their servicable life, then I have to write off the cost of installation, meaning I "only" save as much as using the same money to pay off my mortgage initially.

It could be argued that Energy Price inflation will be much higher than this over the next quarter of a centuryn (making the solar option more profitable), but compared to the amount received in FITs, actually this doesn't make an huge difference unless the rate is astronomical. It could also be argued that at the end of 25 years, the panels may well have another decade or more of life in them, albeit at reduced efficiency.

So, is it worth it? I think for me, yes. As a cautious invester, I would regard taking 15k and paying it off my mortgage as a very good thing to do. So, given that Solar PV with the Govt Scheme seems to offer approximately the same (or slightly better) returns, AND will reduce my environmental impact, it has to be well worth considering.

Anyone think I've made a massive error in my calculations? (Back-of-an-envelope workings can be shown on request.....!)

Andy

Cardew

noncom wrote: »

Anyone think I've made a massive error in my calculations? (Back-of-an-envelope workings can be shown on request.....!)

Andy

Requested please!

noncom_2

OK, they're on my PC at home, so I'll try and post them this evening!

Andy

Equaliser123

antwin-solarpv wrote: »

i work for a company called [xxx], we specialise in solar pv and with the new fit starting in april 2010. If you can afford it you would be crazy not to cash in, but dont just take my word for it, one of the chief writers for the guardian, a mr george monbiot although not 100% for solar power, says its the best investment a householder can make. Check out our web spam dot com

spam...........

Cardew

Equaliser,

May I suugest you edit your post to delete his spam addresses!!

noncom_2

As promised, back of the envelope calculations to follow..... firstly, to address the point made by the Spammer above (if it hasn't been deleted by the time you read this...) George Monbiot does indeed write in his Guardian blog that renewables are now the best investment a homeowner can make. He goes on to argue that this is unethical because it will benefit the middle and higher income classes at the expense of poorer people, and that the money spent would achieve much more to reduce carbon emissions if directed elsewhere. Leaving aside the political points, I think he is wrong to suggest it is such an overwhelmingly obvious investment for a homeowner:

Assumptions: 3kW system, generating 2550 kWh pa (taken from "official" estimates, but possibly over-optimistic) and costing £15k to install.

25% used on site, Export tariff = 3p / kWh, initial cost of imported electricity = £0.14 / kWh (25% seems reasonable for a working family whose main consumption of power is in the evenings with lights, TV, kettle etc )

Generation Tariff (year 1) = 41.3p per kWh = £1053.15

Imported electricity saved = 2550 *25% * 0.14 = £89.25

Therefore saving in year 1 (excl Export Tariff) = £1142.40

Assuming inflation = 2%pa, loss of efficiency of the panels = 1%pa, the return is:
Y1 1142.40
Y2 1153.82
Y3 1165.35
Y4 1177.00
Y5 1188.77
Y6 1200.66
Y7 1212.67
Y8 1224.80
Y9 1237.05
Y10 1249.42
Y11 1261.91
Y12 1274.53
Y13 1287.27
Y14 1300.14
Y15 1313.14
Y16 1326.27
Y17 1339.53
Y18 1352.92
Y19 1366.45
Y20 1380.11
Y21 1393.91
Y22 1407.85
Y23 1421.93
Y24 1436.15
Y25 1450.51

Total = £32,265.36
Export saving = £57.37 pa (assuming not index linked, I'm not sure from the info I've read whether this figure will be or not, but it will make very little difference) = £1434.37

Total return over 25 years = £33,699.73
Cost of installation/repair etc written off = - £15,000
Therefore total return = £18,699.73

£15,000 used to reduce a mortgage at 5% (fixed for 25 years, interest only) saves £750pa
Total return over 25 years = £18,750

After 10 yrs, though, if you wanted to sell your house
:
Solar PV income = £11,951.94 + £573.70 = £12,525.64
Cost of installation/repair etc written off = £-15,000
Total return = £-2474.36

£15,000 to reduce mortgage as above for 10 years saves £7500
Therefore to match this, the panels would have to add £9,975.36 to the value of the house to reach the "break even" point.


Because the saving on imported electricity is so low compared to the Generation tariff, energy price inflation would have to be astronomical to make a significant dent in these calculations.

From this, I would challenge George Monbiot's assertion that it is the best investment that a homeowner with spare cash can make. I think it's a decent investment, especially given that at the end of 25 years, a good quality system should actually have a reasonable life left once it's "paid for itself", but not a no-brainer. And compared to reducing your mortgage, it is at least doing something to help the fight against climate change.

Hope this helps to explain my thinking, and I'd welcome anyone who thinks I'm making a terrible mistake to let me know before it's too late!

Andy