Free solar panel discussion

grahamc2003

slacky555 wrote: »

As far as I am aware homesun offers straight line depreciation on their systems and you do not pay the foregone FIT. It's ashadegreener that require the forgone FIT.

Well, what does 'straight line depreciation' mean?

What value does the straight line start at when installed?

I suspect the initial value is the total 25 year projected returns, and not the system 'value' e.g. £12.5k or whatever which I think most people think it is.

If that isn't the situation, then the companies wouldn't have any sort of business, and would simply be selling very cheaply all their future index linked profits.

If you have a contract in front of you, does it specify the actual price to buy out the contract after, say, 2 years, or 10 years for example?

grahamc2003

zeupater wrote: »

Hi Brian

Agree, the only issue being that you will need a number of years of straight line depreciation under your belt before their 'buy out' price falls in line with current typical outright purchase levels. There was a discussion involving Krish from Homesun regarding this some months ago.

Z

Ok, but legally you can forget about any discussion with Krish. What, exactly if you could, does your contract say about the buyout price in the future? Could you reproduce the relevant sections?

grahamc2003

Cardew wrote: »

The straight line depreciation on the Homesun system starts from what price?

Snap!



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zeupater

grahamc2003 wrote: »

Well, what does 'straight line depreciation' mean?

What value does the straight line start at when installed?

I suspect the initial value is the total 25 year projected returns, and not the system 'value' e.g. £12.5k or whatever which I think most people think it is.

If that isn't the situation, then the companies wouldn't have any sort of business, and would simply be selling very cheaply all their future index linked profits.

If you have a contract in front of you, does it specify the actual price to buy out the contract after, say, 2 years, or 10 years for example?

Hi

That is exactly my point, as well as Cardews .....

I think that anyone who is interested in what the baseline value which Homesun would place on a system would be should review the discussion over a few dozen posts on the thread starting here ..... https://forums.moneysavingexpert.com/discussion/comment/39140566#Comment_39140566 .... it would be useful if you could scan right through to post #1654 ......

Regards
Z

dorsetboy

I can see the point being made here, and it seems that you guys may be right. Having looked at my contract the base price for my system is £17,050, so if the earlier post suggesting the actual price would probably be 11 or 12k is correct, they have probably included 25 years of FITs in the base price. In my instance, as I have stated previously, I would never be interested in buying out Homesun or selling my property in the future. My wife & I are both in our late 60's, with no immediate family, and the only way we will be leaving our bungalow will be in boxes. We are only here for the free electricity, and the equity release company will have to deal with any sale once we've both departed.:j

However, it is a good point to bear in mind for others, not in our situation.

Brian

grahamc2003

Cardew wrote: »

You must not allow anything to put the panels into shade. What happens when a neighbour's tree grows I do not know.

.

That point could really be a disaster. Just think if the tree is protected, or gets protected when the council gets wind someone wants to chop it down. If the South facing roof is on the front of the house, and the tree can be seen from the public road, there's a pretty high chance - at least with our council - that that situation could arise.

Again, we'd need to see the wording in the contract for what happens if shading is allowed to develop, and the panel output is trashed. Afaiu, you only need shading on one panel to bring the output of the lot on that circuit down.

slacky555

dorsetboy wrote: »

I can see the point being made here, and it seems that you guys may be right. Having looked at my contract the base price for my system is £17,050, so if the earlier post suggesting the actual price would probably be 11 or 12k is correct, they have probably included 25 years of FITs in the base price. In my instance, as I have stated previously, I would never be interested in buying out Homesun or selling my property in the future. My wife & I are both in our late 60's, with no immediate family, and the only way we will be leaving our bungalow will be in boxes. We are only here for the free electricity, and the equity release company will have to deal with any sale once we've both departed.:j

However, it is a good point to bear in mind for others, not in our situation.

Brian

I cant say i agree with that when your system was installed it may well have been around the 17k mark these systems aren't set prices like stamps they dont have a face value and can change from company to company.

So at the point of install i would say that your system probably was valued at 17k.

Just look at the link below Dave paid over 17K for a 2.98kw system in the summer last year.

http://www.uksolarcasestudy.co.uk/recently-added-systems

Those of you who have been following this thread know that the homesun system buy out price doesnt include any forgane FIT payment and it is straight line from the day of install to the end of the 25 years.

grahamc2003

slacky555 wrote: »

Those of you who have been following this thread know that the homesun system buy out price doesnt include any forgane FIT payment and it is straight line from the day of install to the end of the 25 years.

If that is the case, then I don't think Homesun will survive long term.

Say you have a 15k system, getting Homesun £1.3k in fits pa.

Say inflation rises at an average of 5%.

Lets see the situation in 12.5 years time.

The cost to buy out the contract will be £7.5k if my understanding of what you are saying is coirrect.

The fits will have risen to around £2,600pa, giving a return to the buyer of 35%, and rising.

Businesses which sell assets returning a safe, guaranteed and rising 35%pa won't last long. Either Homesun haven't thought this through, or else there's more protection for them in their contract which hasn't been disclosed.

Aftter 20 years, the company is selling asssets returning £3.9k pa for £3k, so I think it's clear that all their contracts will be bought out well before 20 years.

Effectively the cost to buyout drops by £600 each year while the cash return rises by rpi each year. Surely no company in their right mind would write that into their contract would they?

slacky555

grahamc2003 wrote: »

If that is the case, then I don't think Homesun will survive long term.

Say you have a 15k system, getting Homesun £1.3k in fits pa.

Say inflation rises at an average of 5%.

Lets see the situation in 12.5 years time.

The cost to buy out the contract will be £7.5k if my understanding of what you are saying is coirrect.

The fits will have risen to around £2,600pa, giving a return to the buyer of 35%, and rising.

Businesses which sell assets returning a safe, guaranteed and rising 35%pa won't last long. Either Homesun haven't thought this through, or else there's more protection for them in their contract which hasn't been disclosed.

Aftter 20 years, the company is selling asssets returning £3.9k pa for £3k, so I think it's clear that all their contracts will be bought out well before 20 years.

Effectively the cost to buyout drops by £600 each year while the cash return rises by rpi each year. Surely no company in their right mind would write that into their contract would they?

But as many have pointed out on here the system may have been valued at lets say 15k and that would be the cost to buy out day one.

It wont have cost them 15k i know what you are saying but even if you say 12.5 years down the line when most people may see that they can or want to buy out homesun will have already made over 15k in FITs and then then will be paid an additional 7.5k if the customer buys out so total over 22.5k.

For them to initally out lay may be 10k so they havent lost money so why wouldnt they last long???

As with dorestboy hes states he wont ever buy his system so i am sure many others will be like that and they will be making a furtune.

Cardew

grahamc2003 wrote: »

If that is the case, then I don't think Homesun will survive long term.

Say you have a 15k system, getting Homesun £1.3k in fits pa.

Say inflation rises at an average of 5%.

Lets see the situation in 12.5 years time.

The cost to buy out the contract will be £7.5k if my understanding of what you are saying is coirrect.

The fits will have risen to around £2,600pa, giving a return to the buyer of 35%, and rising.

Businesses which sell assets returning a safe, guaranteed and rising 35%pa won't last long. Either Homesun haven't thought this through, or else there's more protection for them in their contract which hasn't been disclosed.

Aftter 20 years, the company is selling asssets returning £3.9k pa for £3k, so I think it's clear that all their contracts will be bought out well before 20 years.

Effectively the cost to buyout drops by £600 each year while the cash return rises by rpi each year. Surely no company in their right mind would write that into their contract would they?

What is the betting that a new firm will start up offering Homesun customers £3,000 + £500(profit) + Nectar points!!! to buy out their contract