The Great 'Get Paid To Generate Energy' Hunt

Doc_N

Just a further thought after reading an article in the Telegraph online recently - there's no guarantee that a future government won't decide to tax the FIT payments. Or for that matter reduce them, or even stop them.

Any of those things would completely wreck the present basis of calculations - it's causing me to think very carefully before making a decision.

Churchpolly

Hi, I have investigated the Fits and am looking now to get prices for a small business I work for in the Birmingham area. I rang the Energy Saving Trust and they said the price for a 4kw system of pv panels would be around £13,000. I have looked on the net and prices quoted vary from £7k to £15k. depending on site etc. I am interested in guarantees (the longer the better), value for money (nothing new there) and efficiency and helpfulness....So as usual I am asking Forum members for their feedback/advice!

Scott_McLean

Doc_N wrote: »

Just a further thought after reading an article in the Telegraph online recently - there's no guarantee that a future government won't decide to tax the FIT payments. Or for that matter reduce them, or even stop them.

Any of those things would completely wreck the present basis of calculations - it's causing me to think very carefully before making a decision.

We don't believe this is likely for two reasons:

Firstly, the reason it is Income Tax exempt is largely because the payments are a levy on electricity bills. To then tax that income would in effect be a double tax and quite heavily criticised.

Secondly, to do so would be potentially dis-incentivising which would be counter-productive given the country's renewable energy targets which, as of yesterday, it appears may be raised further by this Government and in any case, will almost certainly be raised post-2020 when the 15% legally binding EU target must be raised. I appreciate this is not the strongest argument against raising tax on the income, but one can't exactly give guarantees!

Doc_N

Scott_McLean wrote: »

We don't believe this is likely for two reasons:

Firstly, the reason it is Income Tax exempt is largely because the payments are a levy on electricity bills. To then tax that income would in effect be a double tax and quite heavily criticised.

Secondly, to do so would be potentially dis-incentivising which would be counter-productive given the country's renewable energy targets which, as of yesterday, it appears may be raised further by this Government and in any case, will almost certainly be raised post-2020 when the 15% legally binding EU target must be raised. I appreciate this is not the strongest argument against raising tax on the income, but one can't exactly give guarantees!

I'd agree with you about the disincentivisation, but the source of the payments and double taxation has never bothered HMG. All my income is taxed, but if I pay it over to an installer he'll have to pay tax on it again! Such is life...............

Scott_McLean

Doc_N wrote: »

I'd agree with you about the disincentivisation, but the source of the payments and double taxation has never bothered HMG. All my income is taxed, but if I pay it over to an installer he'll have to pay tax on it again! Such is life...............

Well, they do say that death and taxes are the only two things you can be certain of in life

green_as_grass

If you want some knowlegable advice about installing solar thermal try a forum hosted by navitron (I'm not allowed to post a link as a new user). This forum is hosted by a company selling renewable energy equipment but the forum is open to anyone and I've found a lot of sound advice there from people with a wealth of experience of using / installing solar panels - it has helped me design my own system. There are lots of issues to be aware of if you want a system that works efficiently. I agree with a lot of the comments here about avoiding the 'cowboys'. I've decided to do a DIY installation, which has certainly been a challenge to me, but made more convenient by a helpful builder who has been doing my loft conversion. Even if you're paying for your installation it is worth researching the issues so that you can 'quiz' potential installers in an informed way and sort out the bona fide from the cowboys. At a cost of around £2500 I have an (almost completed) system which is much more efficient than the typical system many companies would install at a fraction of the cost (larger panel and tank size to cover periods of cloudy days, 12v pump and battery back-up to act as fail-safe during power cuts). My main motivations are 1. reducing carbon emissions, 2. providing energy security at a time when other sources are looking less reliable (peak oil issue/ gas supplies from Russia/ increased demand from China/India), 3. Cost savings. The latter is based largely on my expectation that energy prices are going to rise rapidly in the near future. Some other posters on this forum don't seem to be taking this into account. Neither do they seem to be taking into account the Renewable Heat Incentive RHI coming into force next April for solar thermal panels. If I'm wrong on this then OK, I reckon I'll make my money back over the lifetime of the panels anyway given the comparatively low cost of my installation. We need to be aware that the UK is way behind in the use of renewable energy compared to companies like Denmark and Germany, where the majority of households and businesses are utilising solar thermal and solar electric systems. Their countries have kick-started the renewable industries with government subsidies. Thank goodness the UK is finally getting round to the same thing.

Cardew

green_as_grass wrote: »

At a cost of around £2500 I have an (almost completed) system which is much more efficient than the typical system many companies would install at a fraction of the cost (larger panel and tank size to cover periods of cloudy days, 12v pump and battery back-up to act as fail-safe during power cuts). My main motivations are 1. reducing carbon emissions, 2. providing energy security at a time when other sources are looking less reliable (peak oil issue/ gas supplies from Russia/ increased demand from China/India), 3. Cost savings. The latter is based largely on my expectation that energy prices are going to rise rapidly in the near future. Some other posters on this forum don't seem to be taking this into account. Neither do they seem to be taking into account the Renewable Heat Incentive RHI coming into force next April for solar thermal panels. If I'm wrong on this then OK, I reckon I'll make my money back over the lifetime of the panels anyway given the comparatively low cost of my installation. We need to be aware that the UK is way behind in the use of renewable energy compared to companies like Denmark and Germany, where the majority of households and businesses are utilising solar thermal and solar electric systems. Their countries have kick-started the renewable industries with government subsidies. Thank goodness the UK is finally getting round to the same thing.

Welcome to the forum.

Agreed, the Navitron website and forum is very useful.

http://www.navitron.org.uk/forum/


I would add that a few posters have been realistic about the output they get - paticularly in winter(ie virtually nothing)
A couple of comments/questions:

How does your system provide 'energy security'? All it means is that you will be able to have some hot water! If you really are worried about power cuts get a cheap portable generator.

£2,500 invested in savings produces £100 a year in interest. What do you estimate to be the value of hot water you will produce and be able to use?

Of course RHI, if the proposals are adopted, will alter the equation and could make the solar thermal a viable proposition. The problem is that it has to then be installed by a MCS installer and DIY installations like yours won't qualify.

It is all very well praising 'green' subsidies but it is hardly a fair system. We will all pay for these subsidies, but many people with unsuitable properties e.g flats, an unsuitable roof etc will not be able to take advantage of the subsidies or will millions of tenants.

More and more properties have combi boilers. Apart from being highly efficient(and thus 'green';)) the main advantage being a hot water tank is not required and space is saved. So if they fit solar thermal they need to revamp their plumbing and find space for a Hot water tank.

green_as_grass

Interesting and challenging questions, Cardew. Always good to examine the issues carefully before investing thousands of pounds. Thanks for posting the link to the Navitron forums for others to access. Their Wiki section is a good place to start, I found.

My responses to your points:

Yes, you can only rely on output from solar panels for 6 to 8 months of the year, depending on design. Our water-heating system includes a woodburner back-boiler for the winter months. We are retaining our combi boiler for the time being until we have thoroughly tested out the system but will probably not replace it once it dies.

By 'energy security' I meant minimising dependence on fossil fuels (which are depleting while demand is rising rapidly - try googling 'peak oil'). A 'generator' would only fit the bill for me if fuelled by renewable energy - so would probably not be 'cheap'. Otherwise it is just adding to the problem. Solar Thermal is only the first step admittedly, solar electric will probably be next, once we can afford it. Another measure I'm taking is to maximise insulation, including internal insulation to the external walls. Without a high standard of insulation renewable energy is not really viable - particularly for our house, a mid-terrace with limited roof space. We expect the insulation will enable the woodburner to heat the whole house sufficiently through the winter.

Yes, I could earn £100 per year interest on the £2500 spent. However this £100 interest would not maintain the value of my savings (inflation losing value faster than the interest gains it). And all the while I would still be paying for heating my water with gas. Many people focus on the 'payback period' and I've seen estimates of this being about 10 years for a modestly-sized system utilising an existing tank. I prefer to take a longer term view so have gone for a larger, more efficient, system, (more panels, high capacity thermal store) giving useful heat for a longer period of the year. 'Payback' is longer because of higher initial cost, but once payback is achieved the extra benefits (heat output) continue for free and many of the components will last indefinitely. I realise that actual hot water heating costs are currently a small proportion of our household bills so savings right now may not seem so significant. But I'm 'gambling' on those costs increasing rapidly as demand increases and supply dwindles. Are you prepared to gamble that they will stay stable?

Yes, a DIY installed system will not qualify for Renewable Heat Incentive Payments. I bought my components and started my installation before it was announced. I intend to find out whether I will qualify if I get a MCS installer to complete the plumbing, electrics and commissioning (though I'm not very hopeful).

A fair incentive system? There seems to me to be an inherent fairness in a system arranged so that those who consume most fossil fuels (depleting precious resources and causing climate chaos in their wake) end up subsidising those who try to minimise use of resources and protect our only habitat - we only have one planet after all. I take your point that some people will not have the means to install solar panels in their current locations but these are very rare in reality - they can be installed on flat roofs, east/west roofs, even walls (though more panel area is needed for the same output) and there are other technologies too. There aren't many properties that only have North-facing roofs/walls. The same incentives apply to landlords so, in effect, tenants are not excluded from the benefits. In my opinion the renewables industry needs this 'kick-start' in the UK.

Yes, the space (and cost) needed for a tank/thermal store can be a disincentive - all the more reason for having an incentive scheme I would say. Because some cannot benefit (in their current location) is not a good argument for saying that no-one should benefit. I am in favour of a system whereby people are given loans for their installation costs which are then paid back via the savings on bills so that the installations are affordable for those on limited incomes (ie. most of us!) and there is no increased financial burden.

Cardew

green as grass,

Whilst both issues are important, I think it is sensible to separate the Money Saving aspects from the 'Green' aspects.

The bottom line from the money saving aspect is that if you have gas, solar thermal will save you £30-£40 a year. The average across other fuels(according to WHICH) is £55 a year.

Such a system would cost around £4,000 and to save the figures above you lose £150 a year in interest which is compounded year on year. I certainly don't agree with your assertion that this interest will not maintain the value of savings due to inflation. That hasn't happened for years and given the measures to curb inflation is unlikely to happen again. If that is your worry you can put it in National Savings and get the inflation rate + 1% interest.

So there is no possible scenario where solar thermal is financially viable. RHI may change that.

If, armed with that information, people believe that the 'green' aspects of solar thermal are worthwhile then so be it!!!

green_as_grass

Cardew

I have seen other sources, apart from Which?, that give a typical payback of 10 years for an average commercial small-scale, good value (not rip-off, which so many are) solar thermal system. Sorry I can't recall where I've read this (I've read so much!).

That is worked out on current energy prices, as are the Which? figures. Current decent interest on savings is around 2.5% without having to lock your money away for years, and this compares to 4% current inflation so I stand by my assertion that the value of savings are currently diminishing.

But, as I said previously, I am not looking just at the current situation but also at what is expected in the future regarding energy prices (and also the cost of raw materials for building solar thermal systems in the future, given increased demand from China in particular). I think now is the best time to get a good value system before this happens.

On the other hand if you think that the global financial, inflationary pressures, raw material costs, fossil fuel costs will be relatively stable in the future you will not agree and you will keep to your opinion that 'there is no possible scenario where solar thermal is viable'. To encourage people to make their decisions on this rosy scenario seems wildly optimistic to me.

I realise this is primarily a 'money-saving' website but the 'Green' issues and 'Peak Oil' issue will have drastic financial implications for us all and to ignore them is not the best way to plan for our future prosperity in my opinion. Unless you choose to deny or ignore the reality of these scenarios the issues can't be separated. I accept that without a crystal ball we cannot be absolutely certain of the future but the balance of probabilities leans very much towards unstable financial prospects on a global scale.

Sorry if this sound like I'm a doom-monger but I don't believe in burying my head in the sand!