The Great 'Get Paid To Generate Energy' Hunt

shaven-monkey

Putin says 'cheap gas era' ending, http://news.bbc.co.uk/1/hi/world/europe/7796806.stm
The The Gas Exporting Countries Forum (GECF) are meeting in Algeria to discuss a "fair price" for their exported gas at the moment, so gas prices are set to rise and the cartel will keep them high.
The demand for and price of electricity will continue to rise even with microgeneration so in the long term the savings from generating and using your own power will improve.

In terms of return on investment, the FIT scheme isn't bad.
A better payoff would come from investing money in triple glazing, very efficient cavity wall or other insulation and perhaps a compartmentalised house to retain heat in the active areas. £15k would go a long way to raising a house's energy efficiency through stoploss.
If you've already got all these things in place and 15k you want to spend on environmentally sound technologies then solar PV is a reasonable place to put it.

Energy_Saving_Trust_company_representative

Hi, i'm Steve and i'm the Head of Low Carbon Technology at the Energy Saving Trust. A colleague noticed this thread an suggested I make a post. I hope you find it useful.

The information you have all been working out is exactly what we have been trying to explain to people via our website. Our latest tool, The cash back calculator is attempting to keep the conversation about installing both PV and wind turbines financial.(I'm new so not allowed to put in a link, please find it linked on the left hand side of the Energy Saving Trust generate you own page of our website) Eventually, (the tool is still evolving) it will give you monthly income from FIT vs monthly loan repayment.

The principal is the same as the Pay As You Save pilot we are running at 5 locations round the country. Basically the repayment of a loan to pay for the installation should be less than the reduction in your fuel bill. So at the end of the month, yes you have a bigger mortgage/loan repayment, but also a smaller utility bill. If it all works, you should be better off at the end of the month than you were when you just paid the money away to your energy supplier. I would encourage money saving experts to have a play with the tool and give us some feed back. (via this forum) and we will look at incorporating your comments.

Some things to think about. The reported prices for installed PV systems we see (which are Low Carbon building Programme MCS certificated) tend to be around £6/Wp. However recently we have seen installed prices around £4.50/Wp. Sadly, aware of the 'feed in frenzy', some installers are quoting way above this and our advice is to shop around and not be too time pressured. The global PV price is low at the moment (panels in the USA are advertised at $2.2/Wp) but there are issues with the supply of things like inverters. If you are prepared to wait and carry on shopping around, you will get a better price, and of course a better price means a better monthly profit, means a shorter (capital) payback. (But if you are better off in the first month anyway, who really cares about capital payback)

It is important to note NO MCS = NO FEED IN TARIFF

And on solar thermal - yes there should be a renweable heat incentive next year, though remember there is an election on at the moment and RHI is a very difficult policy to work out. We are doing a field trial at the moment to see the real harvest you can get from solar thermal. The standard industry assumption is around 1500kWhrs max per annum, but many believe, and indeed many simulation programmes say it is much more. Our robustly monitored results will end the argument. (We have just had a similar trial report back on heat pumps which is extreamly ...interesting, and will be made public in July). At the moment though anadotal arguments for solar thermal tend to be positve. Many quote not needing any other form of heat between early spring and late autumn. However, the question is, how much heat is this...and what is it worth?

I will try and follow this thread so if you would like any further insight to our thinking, and have any money saving opinions of what our thinking should be, please let me know. I will try my best.

Steve

Cardew

Wow. Nice to have the EST on Board - Welcome.

If you PM me the link to your tool and any other interesting links I will place them on this thread.

Interesting to see your thoughts on solar thermal, have you seen this exaustive trial of 8 systems carried out for the Dti at Cranfield? *

http://www.dti.gov.uk/files/file16826.pdf

That seems a pretty robust set of results to me? Admittedly carried out in 2001(before your time?)

*
For those not conversant with the units used!
For the 8 systems tested(evacuated Tube and Flat plate) the annual output ranged from 3440 MJ(megajoules) equal to 955kWh to 4,820MJ(1,339kWh)
However from that total had to be deducted the ‘parasitic’ energy to run the pump and electronics. This ranged between zero and 390MJ(108kWh) pa. This of course is daytime rate electricity.
The average for the 8 systems was just over 1,000kWh per year.

Cardew

Here is the EST link referred to above:

http://www.energysavingtrust.org.uk/Generate-your-own-energy/Cashback-Calculator

Streethawk_2

Thanks for the link there

It's a fine tool - please update us when it includes more functionality too so we can have another look - it'll be good when it has the section for estimated capital cost/loan repayment with interest

On a personal level, I'm still keen to have panels on my roof as I strive to get the most out of this 1955 leaky cavity envelope!
It's a shame that your £6/wp is de rigeur for quoted prices. At £12k for a 2.2KWp installation I can't justify the investment (as explained in previous posts on this thread) and feel that the majority of people will see it the same way...

A £12,000 loan over 5 years requires repayment of £240 per month (at the current leading interest rate for personal loans as recommended by Martin) = £2880 per annum.
Over 10 years another lender offers a slightly higher rate for £143 per month = £1716 per annum.
Your tool suggests a fuel saving and payback total of £943 per annum for a retro-fit 2.2KWp installation in the midlands.
I'd suggest again that PV installations will need to halve in price before take-up becomes economically prudent.
Either that or someone will have to enable a loan that covers the predicted lifespan of the installation secured on its value and income flow and an equipment guarantee to match.

A quick final note - I'd suggest that anyone interested in borrowing money for anything they don't consider essential finds out just how credit works before committing. It would be a shame to tie-up one's credit limit on "affordable" interest rates then need something essential that you can't pay for up-front and have to borrow it at a higher rate...

noncom_2

Just tried the EST calculator. Unfortunately, the "Payback" time estimate produced when you say you are not taking out a loan seems to be the simple (and useless) measure of how long it takes in years to get back the money you spent on the system. This is meaningless, since the alternative is not that you stick the money under the bed, but that you invest it in something else with a reasonable return (such as paying it off your mortgage).

Also, the calculator does not say whether it takes any account of decline in efficiency of the panels (possibly 1%pa), or what assumptions are made about fuel price inflation.

I realise that adding in such variables would make the calculator much less easy to use and understand, but without them the graphs are not terribly meaningful and may lead people to assume this is a better investment than it really is.

noncom_2

Energy_Saving_Trust wrote: »

of course a better price means a better monthly profit, means a shorter (capital) payback. (But if you are better off in the first month anyway, who really cares about capital payback)

Sorry, but this can't go unchallenged. Give me £10,000 of your money and I will promise to give you back £50 a month. You are now "better off" to the tune of £50 a month, so does this mean you don't care that it will take 200 years to get your money back?

:eek:

Andy

Energy_Saving_Trust_company_representative

Streethawk wrote: »

Thanks for the link there

It's a fine tool - please update us when it includes more functionality too so we can have another look - it'll be good when it has the section for estimated capital cost/loan repayment with interest

On a personal level, I'm still keen to have panels on my roof as I strive to get the most out of this 1955 leaky cavity envelope!
It's a shame that your £6/wp is de rigeur for quoted prices. At £12k for a 2.2KWp installation I can't justify the investment (as explained in previous posts on this thread) and feel that the majority of people will see it the same way...

A £12,000 loan over 5 years requires repayment of £240 per month (at the current leading interest rate for personal loans as recommended by Martin) = £2880 per annum.
Over 10 years another lender offers a slightly higher rate for £143 per month = £1716 per annum.
Your tool suggests a fuel saving and payback total of £943 per annum for a retro-fit 2.2KWp installation in the midlands.
I'd suggest again that PV installations will need to halve in price before take-up becomes economically prudent.
Either that or someone will have to enable a loan that covers the predicted lifespan of the installation secured on its value and income flow and an equipment guarantee to match.

A quick final note - I'd suggest that anyone interested in borrowing money for anything they don't consider essential finds out just how credit works before committing. It would be a shame to tie-up one's credit limit on "affordable" interest rates then need something essential that you can't pay for up-front and have to borrow it at a higher rate...

Thank you , I'm glad you like the tool. We still have a list of things to do to it to make it really useful.

I dislike the way you have to scroll down the repayment years on the tool at the moment as I would always put in 25 years as this is the lifetime of the FIT and the normal guarantee on the panels. Try that and see how it works for you. (I'll explain more about this later)

Generally we are trying to pilot long term loans that are secured against the property itself rather than the individual residing in the property. This is hard legally, but not impossible and is what the PAYS project is trying to find a solution for.

Energy_Saving_Trust_company_representative

noncom wrote: »

Just tried the EST calculator. Unfortunately, the "Payback" time estimate produced when you say you are not taking out a loan seems to be the simple (and useless) measure of how long it takes in years to get back the money you spent on the system. This is meaningless, since the alternative is not that you stick the money under the bed, but that you invest it in something else with a reasonable return (such as paying it off your mortgage).

Also, the calculator does not say whether it takes any account of decline in efficiency of the panels (possibly 1%pa), or what assumptions are made about fuel price inflation.

I realise that adding in such variables would make the calculator much less easy to use and understand, but without them the graphs are not terribly meaningful and may lead people to assume this is a better investment than it really is.

I agree - and so do others in the meetings I attend about this, but you are also right that adding this level of detail could confuse which we at all times at pains not to do. Hopefully a later iteration of the will have an advanced mode where you can play with all these factors (I have a workbook for this on my laptop but it's a monster). In the short term we may add inflation (which generally follows fuel price). Your point about money under the mattress is also a good point, which I will raise at the next meeting on the tool.

Energy_Saving_Trust_company_representative

noncom wrote: »

Sorry, but this can't go unchallenged. Give me £10,000 of your money and I will promise to give you back £50 a month. You are now "better off" to the tune of £50 a month, so does this mean you don't care that it will take 200 years to get your money back?

:eek:

Andy

Ar ha - thank you for you challenge. The difference with this is that if you didn't install the technology, you would be paying money away anyway! Instead of making a loan repayment every month, you would be paying an energy supplier - forever!

The whole point of this is that at the end of the month your cash position will be better.

For example (so all 'say' figures)- before the installation you had a energy bill of 'say' £50 a month. After, your bill could reduce by say £10 a month, your loan repayment may be (say) £50 a month, but then your income from FIT and export might be £76 per month. (So a 2kWp retro installation at £4.5 per W with a 25 year loan at 4.5%)

You final month end position without the installation and loan = -£50 = £50 down

Your final month end position with the installation and loan = -£40 - £50 +£76 = £14 down.

So with the loans and panels at the end of the month you have £36 more in you bank account! Result - happiness

The issue of using up your credit limit may now be the concern, but this is why we have a team working on convincing government and the financial industry to launch new green finance (energy mortgages) that are based on energy generation/land/property charge/fuel bill/council tax rather than your personal credit worthiness. Have a look at the PAYS section of our website and the videos it links to.

What do you think?