The Great 'Get Paid To Generate Energy' Hunt

Dave_Fowler

Sylvan wrote: »

Either earlier on this thread or on the other one someone said they set it up so that if there's a power cut the power from the solar panels gets switched off as well.
We often have power cuts, of up to 3 days duration. To me the major advantage of solar, or wind, power would be to avoid those.

I just assumed the capital outlay would be less for a self-contained system, since you wouldn't be paying labour charges. I hadn't realised the batteries would be so expensive.

It is true that the system would shut down if the main electricity supply were to fail. But it should be possible to design a system similar to a stand-alone system which is also grid connected. I have not looked into this, but can not believe it hasn't been done before.

Let's not kill batteries entirely. In situations where there are likely to be power cuts it may be worth throwing a few figures into the melting-pot for consideration. I agree for the normal situation, batteries would be of little use and would not make any economic sense.

Assume you can get a standard system (one connected to the grid) and at the same time have a stand-by battery system added to it. If you were to have 10 batteries attached, each one 12V 60Ah (similar to a standard car battery capacity) the total energy storage would be 7.2kWh.

If you knew the mains power had failed and you turned off non-essentials, this stand-by system would power lights and central heating pumps for some considerable time. You couldn't cook your Christmas turkey on it, but the essentials of a comfortable life could continue. Five 20W cf lights (100W) for 5 hours = 0.5kWh, central heating pump 150W for 10 hours = 1.5kWh, fridge 150W 10 hours/day = 1.5kWh. This relatively small battery backup, costing around £500 would give over 2 days' supply even in the absence of any daylight re-charging.

As the batteries would be on trickle charge and would not be used unless there were a power-cut, say 3 times a year, the lifetime of the batteries ought be around 5 years, i.e. £100 per year maintenance cost.

Is this cost something worth paying in order to have lights,a working fridge and oil/gas central heating over Christmas? You could easily lose £100 in food if a freezer were to be without power for two or three days.

Dave_Fowler

Cardew,

My post concerning an estimated 15 year's pay-back time was in reply to the post by clc5. It was using the figures and interest rates which had been quoted in that post. Whilst not disagreeing with your observations and comments about the government's predicted inflation rates and realise that the rate will probably be lower, reducing the rate to 2% (and hence the National Savings rate to 3%) only increases the pay-back time by 18 months.

As I said in an earlier post, systems are now quoted with a 10 year warranty. If, even at today's inflated prices (due to manufacturing shortages) the inverter is around £900, this would only cause a small delay in the pay-back time as by year 11 the annual income should be around £1500.

I am cautious about investing in some of the higher rate bonds which are sometimes tied to the stock market. The recent and continuing financial turmoil fills me with much mistrust in any quoted possible returns. At present there do not appear to be many sure-fire investments which can give me a return of £1.2k index linked, after tax, guaranteed for 25 years.

Cardew

Dave_Fowler wrote: »

Let's not kill batteries entirely.

I really think we should!

It is not a simple matter for a layman to trickle charge 10 batteries in parallel or 5 sets of 2 batteries in series.

If it was a sensible plan, surely having PV is not relevant - we would all have batteries and charge them from our mains voltage.

If anyone is really concerned about the effects of a power cuts, then buy a simple standby generator .

You can buy them now for under £100. Even top makes like Honda/Briggs and Stratton etc have small generators that produce 2kW or 3kW for £300 or so.


Edit
I would add that above the cost of the batteries you will have to buy an inverter to convert the battery voltage to 230vAC - you cannot use the grid tie inverter from the PV system.

Cardew

Dave_Fowler wrote: »

At present there do not appear to be many sure-fire investments which can give me a return of £1.2k index linked, after tax, guaranteed for 25 years.

It is really this terminology that 'seduces' people.

If I 'invest' money for a return at x% then I expect that the money invested(i.e. the principal) to remain secure.

That is very different to buying an asset with money that cannot be recovered, that will need some maintenance, and eventually will be a pile of junk.

I concede that some people will take a very long term view and for them PV is attractive.

However I suspect that any firm(however secure) offering an investment where you bought an item for £xxxx and had an excellent chance of getting back all your money(given certain assumptions) in around 15 years, and then starting to get an income, would have few takers.

That in reality is what PV offers.

noncom_2

Cardew,

I think you slightly mis-represent the situation.

In your PV scenario, you regard the money spent on the system as "gone", and count the "payback" time in terms of how long it would take to recoup that money and make a profit. This is slightly unreasonable, I would suggest, since it is not the case that the system once installed has zero value. It is yet to be shown how much, but clearly the existence of an already-installed PV system which generates £1200pa of income to the house owner has an asset value, as well as a potential value when selling the house (dependent of course on the length of life left in the system). So you can't discount it completely, although of course we could argue about how great it would be.

In your investment scenario, once the money is invested in NSI certificates or whatever will generate you a steady long term tax-free income, in a way you have still "spent" the money buying those annual returns. You can't count both the investment money AND the returns, as if you still had the principal to spend on something else. The difference is only that in this situation the value of the principal will not decrease over time.

So, for a fair comparison, we should make a proper assessment as far as possible of the asset value in both cases at any given point in time, and also assess liquidity etc.

You are right in so far as you say that PV (from a purely financial point of view, disregarding any ethical considerations) will only be attractive to those with a very long term view, however. I would suggest though that if we are to get our planet out of a bloody great mess that a long term view is exactly what more people need to start taking.

Cardew

noncom wrote: »

Cardew,

I think you slightly mis-represent the situation.

In your PV scenario, you regard the money spent on the system as "gone", and count the "payback" time in terms of how long it would take to recoup that money and make a profit. This is slightly unreasonable, I would suggest, since it is not the case that the system once installed has zero value. It is yet to be shown how much, but clearly the existence of an already-installed PV system which generates £1200pa of income to the house owner has an asset value, as well as a potential value when selling the house (dependent of course on the length of life left in the system). So you can't discount it completely, although of course we could argue about how great it would be.

In your investment scenario, once the money is invested in NSI certificates or whatever will generate you a steady long term tax-free income, in a way you have still "spent" the money buying those annual returns. You can't count both the investment money AND the returns, as if you still had the principal to spend on something else. The difference is only that in this situation the value of the principal will not decrease over time.

So, for a fair comparison, we should make a proper assessment as far as possible of the asset value in both cases at any given point in time, and also assess liquidity etc.

You are right in so far as you say that PV (from a purely financial point of view, disregarding any ethical considerations) will only be attractive to those with a very long term view, however. I would suggest though that if we are to get our planet out of a bloody great mess that a long term view is exactly what more people need to start taking.

Noncom.

My point is that with my £18,000 investment in a bank/BS etc it is an asset that can be recovered(cashed-in!) at any time(or at the end of a 3 or 5 year term - immediately if you pay a small penalty), together with any accrued interest.

A PV system costing the same £18,000 cannot be recovered. You have to sell the property and then we can debate if it will add value to the property, and by how much.

Your 'Green' issue is understood, albeit I suggest the motivation for most people in getting PV is financial, and that is the issue being discussed in this thread.

Doc_N

Cardew wrote: »

It is really this terminology that 'seduces' people.

If I 'invest' money for a return at x% then I expect that the money invested(i.e. the principal) to remain secure.

That is very different to buying an asset with money that cannot be recovered, that will need some maintenance, and eventually will be a pile of junk.

I concede that some people will take a very long term view and for them PV is attractive.

However I suspect that any firm(however secure) offering an investment where you bought an item for £xxxx and had an excellent chance of getting back all your money(given certain assumptions) in around 15 years, and then starting to get an income, would have few takers.

That in reality is what PV offers.

I think you're right, but it's the 'green' angle that attracts some people (my wife, for example). My calculation for my 'investment' of £17,500 quoted for a 4kWp system runs like this:

Estimated current annual FIT + savings on own electricity + export = £1600

£17500 invested at, say, 5% compound = £59261 at year 25 (£41761 'profit')

£1600 x 25 years = £40,000, but around £90,000 with 5% inflation


On these figures (and the 5% could be wrong either way) there's a clear gain, even allowing for a couple of inverters and a bit of ongoing maintenance and repairs.

Or am I missing something - entirely possible!

Dave_Fowler

Cardew wrote: »

I really think we should!

It is not a simple matter for a layman to trickle charge 10 batteries in parallel or 5 sets of 2 batteries in series.

If it was a sensible plan, surely having PV is not relevant - we would all have batteries and charge them from our mains voltage.

If anyone is really concerned about the effects of a power cuts, then buy a simple standby generator .

You can buy them now for under £100. Even top makes like Honda/Briggs and Stratton etc have small generators that produce 2kW or 3kW for £300 or so.

The original post, which brought up the subject of batteries, was from someone considering purchasing a PV system to fit on their house in a rural community where there were occasional prolonged power-cuts, but they were disappointed that a standard PV system would shut down as soon as the grid power went off. They further added that this was a pity because a battery backup system could power the house during these power-cuts. Batteries were immediately cut down as being totally impractical, but I sought to show that under some circumstances they could possibly provide a suitable source of energy storage.

The system I envisaged would allow the PV panels (during daylight hours), or the batteries during darkness, to power a special inverter and switchgear system whenever the main grid power went off. I surmised that such a system should be possible to obtain. It would come into use perhaps 3 times a year during power-cuts in the isolated home.

I at no times suggested that a layman should ever consider attaching batteries to a PV generating system. It would be a dangerous thing to do as the batteries would need adequate ventilation to allow the hydrogen and oxygen gases generated during charging to escape. Also the ten batteries would have to be connected in series so that the terminal voltage would be a dangerous 120V, just over the minimum DC start-up voltage for many inverters. I said that it may be possible to have them installed as part of the PV installation and I meant by this that they would be installed by the same professional installers. If it were possible to do this, then the battery back-up would start immediately the mains power went off.

It is not all peaches and cream with a stand-by generator. A £300 generator would have to be housed in an out-building because of the exhaust fumes and would have to be manually started - a torch on a cold winters' night to find the generator and get it started? The generator would need their supply of petrol topped up. Some of the cheap generators have a tank that lasts only last a few hours on full load. Then, how do you connect it into the house wiring so that the lights, central heating and fridges work? You would certainly need switch-gear to isolate the house from the mains similar to that of the modified PV system.- Not a job for the average layman to do.

An automatic generator system which starts up immediately the mains power goes off - similar to those used in office blocks, hospitals and shops is not cheap to install (I speak here of the system of generation not the cost of these large generators which, of course, are not in the same league of generating power).

Your comment about charging stand-by batteries from mains power is certainly true and I am surprised more people have not done this. I already have this for my central heating, computers and two cf lights. Power-cuts here in the town rarely last more than a few hours but it is inconvenient for there to be no lights and the temperature soon drops (just ask my wife) as soon as the heating goes off.

Dave_Fowler

Doc_N wrote: »

I think you're right, but it's the 'green' angle that attracts some people (my wife, for example). My calculation for my 'investment' of £17,500 quoted for a 4kWp system runs like this:

Estimated current annual FIT + savings on own electricity + export = £1600

£17500 invested at, say, 5% compound = £59261 at year 25 (£41761 'profit')

£1600 x 25 years = £40,000, but around £90,000 with 5% inflation


On these figures (and the 5% could be wrong either way) there's a clear gain, even allowing for a couple of inverters and a bit of ongoing maintenance and repairs.

Or am I missing something - entirely possible!

Calculations using the principles set out in your post have been done before. £17500 at 5% interest would give you an income of only £875 in the first year compared with (your figures) £1600 from FITs. Assuming you do not need to borrow the £17500, the calculations stop here. Throw in a loan and you can be here all night working out the pros and cons.

What you are not considering is that at the end of the first year your total liquid assets would by £18375 if you invested the money but only £1600 if you purchased a PV system. The £17500 on your roof would probably increase the value of the house and so some if the investment could be realised if you needed the cash. This significant reduction in liquid assets is one of the arguments raised by those wishing to discount any PV advantage. Don't forget in your calculations that you can invest the FITs income in the same way as the £17500 original sum. This makes some difference to the figures too.

On the subject of investments, many of the 'high income' investments give you the interest at the end of the year and do not compound it with the original sum. It would be up to you to invest the £875 in another investment and with this small sum it may be more difficult to get as high an interest rate as you could get with £17500.

If you have the cash to spare and are willing to wait a few (15?) years before you see any nett liquid asset gains then the returns from a PV system could outweigh the initial investment risk.

I think an inflation rate of 5% is a little high. The government says 2%, but who believes them? But whatever, even using a lower percentage, the FITs income does increase.

Doc_N

Dave_Fowler wrote: »

Calculations using the principles set out in your post have been done before. £17500 at 5% interest would give you an income of only £875 in the first year compared with (your figures) £1600 from FITs. Assuming you do not need to borrow the £17500, the calculations stop here. Throw in a loan and you can be here all night working out the pros and cons.

What you are not considering is that at the end of the first year your total liquid assets would by £18375 if you invested the money but only £1600 if you purchased a PV system. The £17500 on your roof would probably increase the value of the house and so some if the investment could be realised if you needed the cash. This significant reduction in liquid assets is one of the arguments raised by those wishing to discount any PV advantage. Don't forget in your calculations that you can invest the FITs income in the same way as the £17500 original sum. This makes some difference to the figures too.

On the subject of investments, many of the 'high income' investments give you the interest at the end of the year and do not compound it with the original sum. It would be up to you to invest the £875 in another investment and with this small sum it may be more difficult to get as high an interest rate as you could get with £17500.

If you have the cash to spare and are willing to wait a few (15?) years before you see any nett liquid asset gains then the returns from a PV system could outweigh the initial investment risk.

I think an inflation rate of 5% is a little high. The government says 2%, but who believes them? But whatever, even using a lower percentage, the FITs income does increase.

I don't need a loan, so on the face of it the figures seem to work. And it's highly unlikely that I'll need to move from here within 25 years, except in a box, and when that happens one of my kids will take over the house (and the panels).

The loss of liquidity isn't a concern, either, though I fully accept that in different circumstances it would be.

RPI movements (to estimate the increase in the FIT payments) is as impossible to predict as interest rates, and of course the increase in electricity prices. I've taken the reinvestment of the FIT etc 'income' into account, though I think, on reflection that I might have overestimated the £90,000 referred to - it's probably nearer to £80,000. 4% interest would reduce that to around £68K, and 6% would increase it to around £92K - who knows? The £1600 annual figure I've used is likely, I think, to be an underestimate, because the savings on electricity will probably rise at a greater rate than 5%. I've also ignored the effects of income tax - which would sway things further in favour of the solar option.

All in all, I think for me the figures suggest it's a very worthwhile investment. Impossible to be sure, but my money's on rising electricity prices, and if that happens the figures stack up even better.