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The Great 'Get Paid To Generate Energy' Hunt

edited 20 April 2010 at 9:21PM in Green & Ethical MoneySaving
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  • 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?

    I was thinking of this sort of thing myself and how it would work so your example is helpful. The only thing I think you may not have included (unless I've missed it) is the income you would get from having your (say) £10K in invested in something else. Although I guess in your example you are borrowing the money to pay for the installation so you don't actually have the money to invest.

    If you didn't have to borrow the money then you wouldn't have loan repayments to you would be £86 (the original £36 you were better off plus the £50 you don't have to pay back on the loan) better off each month. is that correct?

    So guess the question is then would you be: If you had £15K to pay outright for a 3.5KW system (I think that's about what that size would cost from what I've seen from looking into it) would you be better over 25 years (or different ranges such as 10 and 15 years) using that £15K for a solar PV system or would you be better investing your £15K?

    Thoughts?
  • Electricity prices are likely to rise by more than 20% over the next 25 years.
    The FIT payment will be decreased over the next 5 to 10 years (I assume).
    There's a few more factors involved in the long term calculations of cost / benefit.
    If you have the capital to spare, buying a system will reduce your bills. There's a chance it'll increase your property value, or not.

    Investing in government gilts / bonds or the stockmarket won't decrease your energy bills, won't increase the value of your property but there is a chance that you'll reap a return. Putting your money in an ISA locked up for 5 years will give you a return of maybe 3.5 to 4% per annum on the first £5,100.
    "Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." - Norm Franz
  • edited 24 April 2010 at 11:25AM
    Dave_FowlerDave_Fowler Forumite
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    edited 24 April 2010 at 11:25AM
    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?
    Solar PV System 1: 2.96kWp South+8 degrees. Roof 38 degrees. 'Normal' system
    Solar PV System 2: 3.00kWp South-4 degrees. Roof 28 degrees. SolarEdge system
    EV car
    Location: Bedfordshire
  • noncom_2noncom_2 Forumite
    212 posts
    No, you're not missing much here..... except......

    1) The pension income would be guaranteed for life. The FITs income would be guaranteed (unless changed by a future Govt) for "only"25 years. You might consider this acceptable....... :-)

    2) If you become ill in your retirement and are forced to leave your home, the FITs will not go with you. Whether or not you would get enough extra value when selling your house to compensate for the amount you had spent on the panels is unknown.

    Andy
  • Hmmm

    Is it true that you can only sell electricity back to the grid, if you've had your feed-in meter fitted by a government accredited installer ..

    The accredited installers WILL charge excessively for their services ...so making your saving take longer to happen.

    From a good source........these accredited installers ......pay the gov .....something like £16,000 to become acredited...some are rogue, have had many different names in the past and have been in trouble with the trading standards etc .

    If you put the names of some of these companies into google you will find the evidence of this.

    so be careful !!!

    all the best.markj
  • CardewCardew Forumite
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    In essence you commute a life pension(and for your wife?) for a system that has a guarantee of 2 years.

    Look up the names of the directors of these accredited installers if you can and see how many of them have been involved with companies based in the Christchurch/Bournemouth/Poole area of Dorset. Then have a 'unattributable' chat with Trading Standards in that area and ask their views - they will chose their words carefully.

    The problem with the Solar Industry is that companies can offer a cast iron, say, 55 year guarantee on their products!. They then go bust and open up again with a different name for the firm, albeit with the same premises, same employees, same equipment/vans etc - their wives/children are now directors!!!
  • Dave_FowlerDave_Fowler Forumite
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    Noncom wrote: »
    No, you're not missing much here..... except......

    1) The pension income would be guaranteed for life. The FITs income would be guaranteed (unless changed by a future Govt) for "only"25 years. You might consider this acceptable....... :-)

    2) If you become ill in your retirement and are forced to leave your home, the FITs will not go with you. Whether or not you would get enough extra value when selling your house to compensate for the amount you had spent on the panels is unknown.

    Andy

    Thanks Andy for your comments.

    Your first point about FITs ending in 25 years:- in 25 year's time, I'll be almost 90 - assuming I'm still around - so the end of FITs will be one of the least of my problems. And by then, who knows what the government will be doing about the care of elderly people.

    I take your point about having to move out of my house due to ill health or other reasons.

    What surprises me is that the income should be so much greater from the PV system than from the same amount invested with a 'well known and trusted' pension provider.

    When I'm 80 in, 15 years, the calculations show that if I were forced to move out of my house, the difference between investing the savings from the PV system in something safe like an ISA at 3% interest (FITS income index linked at 2%) and taking the tax-free lump sum and investing that in a similar fashion for the 15 years would only be £1,500 - survive an extra year and the difference would be wiped out.
    Solar PV System 1: 2.96kWp South+8 degrees. Roof 38 degrees. 'Normal' system
    Solar PV System 2: 3.00kWp South-4 degrees. Roof 28 degrees. SolarEdge system
    EV car
    Location: Bedfordshire
  • edited 25 April 2010 at 9:26AM
    Dave_FowlerDave_Fowler Forumite
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    edited 25 April 2010 at 9:26AM
    Cardew wrote: »
    In essence you commute a life pension(and for your wife?) for a system that has a guarantee of 2 years.

    Look up the names of the directors of these accredited installers if you can and see how many of them have been involved with companies based in the Christchurch/Bournemouth/Poole area of Dorset. Then have a 'unattributable' chat with Trading Standards in that area and ask their views - they will chose their words carefully.

    The problem with the Solar Industry is that companies can offer a cast iron, say, 55 year guarantee on their products!. They then go bust and open up again with a different name for the firm, albeit with the same premises, same employees, same equipment/vans etc - their wives/children are now directors!!!

    Thank you Cardew, for your post.

    One company I have been talking to claims to have a 10 year guarantee through a scheme called REIGA. (Renewable Energy Installation Guarantee Agency). They say that 'REIGA is backed by many of the leading suppliers and installers of renewable energy products and is set up for customer protection.' REIGA is based in West Sussex (Close to Dorset??). They say that should they (the company I'm talking to) fail, the REIGA scheme will continue with the guarantee.

    Do you or anyone have any experience of this scheme?

    P.S. I hope the mention of REIGA is not considered to be advertising; to my understanding the body is similar to ABTA or the National House-builders association which organizations exist only for the protection of customers.
    Solar PV System 1: 2.96kWp South+8 degrees. Roof 38 degrees. 'Normal' system
    Solar PV System 2: 3.00kWp South-4 degrees. Roof 28 degrees. SolarEdge system
    EV car
    Location: Bedfordshire
  • simbagsimbag Forumite
    4 posts
    Cardew wrote: »
    In essence you commute a life pension(and for your wife?) for a system that has a guarantee of 2 years.

    Look up the names of the directors of these accredited installers if you can and see how many of them have been involved with companies based in the Christchurch/Bournemouth/Poole area of Dorset. Then have a 'unattributable' chat with Trading Standards in that area and ask their views - they will chose their words carefully.

    The problem with the Solar Industry is that companies can offer a cast iron, say, 55 year guarantee on their products!. They then go bust and open up again with a different name for the firm, albeit with the same premises, same employees, same equipment/vans etc - their wives/children are now directors!!!

    Hi there,

    I just wanted to add a few pennies worth here. I do see where you are coming from with your views on warrantee, and it is something you repeatedly mention in this and another thread I Have been following on the same subject. However, 2 years is the minimum, you will find other companies offering better quality components with a 5 year warrantee.

    A second observation I'd like to make on the same point, is IF you were to buy a brand spanking new car for £50,000, how many years warrantee do they give you on average?... 3 maybe 5 years tops? And how long would you expect he car to actually run for?

    This is obviously an extreme example, but I hope you see my point, just because the warrantee is shorter than the expected lifespan doesn't mean that the product is likely to fail.

    Simon
    (a potential solar PV owner/"investor")
  • simbagsimbag Forumite
    4 posts
    On a separate note, I'd like to ask those in the know about efficiency ratings.

    I've seen some rated on both cell and module efficiency - what is the difference/more important?

    Also, when comparing efficiency, how much difference does it make? Does the KWp already take into account the efficiency rating? Or does a panel with a rating of 20% convert 33% more energy than a panel with a rating of 15%, under exactly the same conditions?

    This would obviously make an enormous difference to the payback time, but would also have to take into account the extra cost of better more efficient technology, hence reason for asking the question.

    Answers gratefully received.
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