The Great 'Get Paid To Generate Energy' Hunt

Robwiz

Having spent a few hours ploughing through this (informative) thread I have a question:

If a homeowner pays to install a PV system on his/her roof, would it not be possible to retain ownership and (FiT income) on selling the house and moving?

After all, A Shade Greener and ISIS have this as their business model, so presumably a similar contract could be draw up for a private sale?

RW

Cardew

Robwiz wrote: »

Having spent a few hours ploughing through this (informative) thread I have a question:

If a homeowner pays to install a PV system on his/her roof, would it not be possible to retain ownership and (FiT income) on selling the house and moving?

After all, A Shade Greener and ISIS have this as their business model, so presumably a similar contract could be draw up for a private sale?

RW

This has been raised before and I have little doubt that lawyers could arrange this, for a fee! However surely just about every lawyer would advise the buyer against agreeing to such an arrangement?

The agreement would have to authorise the seller's agent to inspect, clean, repair etc. Also if the buyer re-sold the house, he would have all the hassle.

Dave_Fowler

It's been three months exactly since my 2.96kWp system was installed. I'm lucky, my roof faces almost exactly due south. The day after the system was installed, the weather changed - you'll remember that the end of June signaled the end of summer - It was all my fault, sorry.

Like many systems the inverter is not quite capable of handling the full output of the PV array (it's rated at 2.65kW). Peak power has only been achieved occasionally, although 2.4 - 2.5 kW is nothing unusual once the sun does manage to shine. Interestingly the output is still around 2kW even when the sun is somewhat obscured but takes a nose-dive when the sun's disk is totally hidden by cloud.

The maximum output has been 19kWh per day. Total generated power is 853kWh in the 92 days.

My mains electricity supplier has still not got round to changing my old supply meter even though they are well aware that it runs backwards whenever the PV generated power is greater than the power consumed in the house.

Dave

zeupater

Hi All

Latest pv panel benchmark prices for September '10 show a further 2% reduction in prices in a month .....

http://www.solarserver.com/service/pvx-spot-market-price-index-solar-pv-modules.html

... prices for european manufactured panels have now fallen by 10.3% to €1.82/Wp this year .......

Autumn/Winter discounts on spring 2010 pricelists anywhere yet ????

Regards

smellypunks

Dave_Fowler wrote: »

I'm about to retire and am considering purchasing a Solar PV system.

I have contacted my pension provider and asked what the difference to my expected pension would be if I took out £18,000 as a tax-free lump sum (this is within the 25% of the pension pot limit I'm allowed). I am told that on a 'flat' pension plan the difference made by taking the £18,000 would be £800 a year.

If I 'invested' the £18,000 in a 3.5kW PV system, the returns on the first year are likely to be £1,236 - this is FITs income plus savings from electricity for my own use - and this sum would be index linked to the RPI.

Am I missing something, or is the PV system providing me with a 'pension' 1.5 times that using the usual pension route?

Dave_Fowler wrote: »

Ref my post #64.
In this morning's news it is predicted that the basic rate income tax will have to rise by at least 6p in the £ if the public spending and borrowing deficits are to be reversed. It is now becoming even more like good sense to take a tax-free lump sum of £18,000 from my pension pot and 'invest' this in a PV system with a probable annual FITs income of £1,200 / year index linked rather than the quoted pension income of £600 / year not index link and taxed at a predicted 26+%.

Even if I were to take the £18,000 and invest it in a selection of bonds, the income from any non-ISA bond would be taxed at the increased rate - ( I couldn't put £18,000 into an ISA in one year).

With the warranty of 10 years for the complete PV system and a quoted annual panel degradation rate of fractions of 1%, even the cost of the replacement of an inverter after 10 years seems not to outweigh the advantages.

Like everyone here I am interested in the idea of micro generation. But I cant help but feel it is still to early. I am thinking that if you worked the figures considering compound interest on an a mixed investment of stock and bonds, which would be held in an ISA invested over two years (£10,200 ISA limit per year). You could see a better value investment.


Option one stock/bond mixed portfolio
So £18,000 invested (in said mix share/bonds in ISA) for 19 years with average 7% interest APR could leave you with an investment worth £65,097.50

VS

Option two 3.5kW PV system
Saving £1,236 a year for 20 years 24720+18000= £42,720.00




Notes/issues/unknowns

• Now you might say 7% is not realistic
• Increasing fuel cost would mean larger than £1,236 per year savings
• How much will 3.5kW PV system be worth after 20 years? Not £18,000!
• Exist from stock/bond investment would need to be staggered or could end in tears if timed badly
• Cant touch money or feel saving for at lest 10 years stock/bonds are long term investment

But you want to feel the savings now
If you did go for Stock/Bond mix in an ISA rap you could do a mix of income and reinvested compound stock. You would see some cash but doing that would impact on the compound gain.

Installation grants
One last thing I know the government instalment grants are no longer around but there are still lottery grants (and others) for installation for Non-Profit Organisations if you could tap that for say 30/40% installation cost then it would be a different ball game.

Final word
I am not trying to put you off but maybe slow you from diving it to an investment that to me does not seem ripe just yet.

Jon_Tiffany

smellypunks wrote: »

Option two 3.5kW PV system
Saving £1,236 a year for 20 years 24720+18000= £42,720.00

Why did you add the £18,000 onto the total? If this is the value of the PV system then you should write that value off. From the day the system is installed you should work on the basis of it having zero cash value.

The figures would also be more accurate if you added in the index link for the payments, but there is a rumour that it may be scrapped, so maybe it is best to look at a worst case scenario.

Cardew

Smellypunks,

A few flaws in your calculations I fear.

Option 1.
As you say, 7% after tax doesn't look remotely likely.(I appreciate £10k in ISAs)

Why 19 years? and Option 2 for 20 years? the FIT scheme runs for 25 years.

£18,000 is now a very high figure for a 3.5kWp system. People are reporting £15,000 for a 4kWp system and in one case £13,000 for a 4kWp system



Option 2
1. The FITs are index linked. what will inflation be?

2. It appears you are using a figure of 3,000kWh from a 3.5kWp system(which is about average for, say Yorkshire latitudes) However what about the sale of exported electricity and the value of electricity used in house?

3. To make a comparison of final totals you must invest your inlation linked £1,236 a year(plus exported electricity and that used in house) and get interest each year on the cumulative sum.

4. Repairs and cleaning!

5. Degradation of panel output.

6. After 25 years the system will have very little value, so you can't include full value in your sums.

There are lots of assumptions that need to be made in working out the merit of installing a PV system in strictly financial terms. However the consensus of opinion is that the 'break even' point will be between 10 and 15 years; if you can get a 4kWp system for £13,000 it will probably be at the lower end of that scale. After that it is big profit time.

smartn

smellypunks wrote: »

Like everyone here I am interested in the idea of micro generation. But I cant help but feel it is still to early. I am thinking that if you worked the figures considering compound interest on an a mixed investment of stock and bonds, which would be held in an ISA invested over two years (£10,200 ISA limit per year). You could see a better value investment.


Option one stock/bond mixed portfolio
So £18,000 invested (in said mix share/bonds in ISA) for 19 years with average 7% interest APR could leave you with an investment worth £65,097.50

VS

Option two 3.5kW PV system
Saving £1,236 a year for 20 years 24720+18000= £42,720.00





Notes/issues/unknowns

• Now you might say 7% is not realistic
• Increasing fuel cost would mean larger than £1,236 per year savings
• How much will 3.5kW PV system be worth after 20 years? Not £18,000!
• Exist from stock/bond investment would need to be staggered or could end in tears if timed badly
• Cant touch money or feel saving for at lest 10 years stock/bonds are long term investment

But you want to feel the savings now
If you did go for Stock/Bond mix in an ISA rap you could do a mix of income and reinvested compound stock. You would see some cash but doing that would impact on the compound gain.

Installation grants
One last thing I know the government instalment grants are no longer around but there are still lottery grants (and others) for installation for Non-Profit Organisations if you could tap that for say 30/40% installation cost then it would be a different ball game.

Final word
I am not trying to put you off but maybe slow you from diving it to an investment that to me does not seem ripe just yet.

I may be missing something here but are you allowing for the investment of the FITS to gain interest over the period of return - ie Yr 1 1236 would then gain your assumed 7% as invested at stock mkt, yr 2 2472(+inflation linked) etc. It's not an easy calculation to make but I think its a way safer investment than a stockmarket investment and 7% is not an easy target for stock market returns these days. I consider the system itself to be worth probably very little at the end of yr 25 but its still a good investment.

smartn

Theres a good calculator on REUK but it doesn't include things like maintenance costs and new inverter costs etc but on the figures supplied against an investment producing 7% tax free I can still break even on my costs by year 13. The difference by Yr25 come out way in favour of solar.

http://www.reuk.co.uk/REUK-Feed-In-Tariff-Calculator.htm

ninjaryder

Like many systems the inverter is not quite capable of handling the full output of the PV array (it's rated at 2.65kW).


Dave[/QUOTE]

Hi i have a 2.3kw system and my inverter is a 3kw..i have spoken to a couple of people in the course of my line of work and their systems have on occasions put out kwh than the system ie one guy
had a 2.5kw and he acheived 2.56kwh at some points..I personally ywould of thought you need an inverter to at leasy match the capability of the system?