Sola profit time frame

MrEnglish

What output would you get if you spent say 15K on sola pannels?

What would be the payback time aprox?

Cardew

I assume you mean solar photovoltaic panels(PV)?

Spending £15k could buy you a 4kWp system assuming no problems in fitting.

Assuming you had a suitable roof(facing south, not shaded, correct orientation and pitch) this would give an output anywhere between 3,000kWh and 4,000kWh per year - depending where you live in UK; the further South the better.

Payback time depends on factors that are very difficult to predict but the best guess would be between 10 and 15 years.

Ecotrician

The payback period with the FIT in operation is around 8 years now, it offers a good return as long as you have the cash upfront to pay for install.

Cardew

Ecotrician wrote: »

The payback period with the FIT in operation is around 8 years now, it offers a good return as long as you have the cash upfront to pay for install.

I appreciate you fit the systems and have a vested interest in making them seem attractive, but your 'wet finger in the air' to estimate 8 years is just that - a wet finger in the air.

You, nor I, have any idea of future inflation rates, interest rates, future repairs, replacements(an inverter costing ??? in a few years.) and maintenance. Some installations will require the panels cleaning of bird droppings and grime!

Also the generated output per kWp can vary by some 30% between geographic areas in UK(Scotland and Southern England) - not to mention the orientation and pitch of the roof.

IMO there is far too much 'sales' talk about Solar PV; perhaps it is because of the industries' background in selling the most useless rubbish(in money saving terms) - namely solar hot water systems.

The subsidies with solar PV obviously give the systems the potential to be a good very long term investment - but to state with authority '8 years' is ill advised IMO.

zeupater

Cardew wrote: »

I appreciate you fit the systems and have a vested interest in making them seem attractive, but your 'wet finger in the air' to estimate 8 years is just that - a wet finger in the air.

You, nor I, have any idea of future inflation rates, interest rates, future repairs, replacements(an inverter costing ??? in a few years.) and maintenance. Some installations will require the panels cleaning of bird droppings and grime!

Also the generated output per kWp can vary by some 30% between geographic areas in UK(Scotland and Southern England) - not to mention the orientation and pitch of the roof.

IMO there is far too much 'sales' talk about Solar PV; perhaps it is because of the industries' background in selling the most useless rubbish(in money saving terms) - namely solar hot water systems.

The subsidies with solar PV obviously give the systems the potential to be a good very long term investment - but to state with authority '8 years' is ill advised IMO.

Hi All

I tend to agree with Cardew's post above.

Using very reasonable assumptions on the costs & variables involved and using my S/W roof as an example you will find that a 4kWp installation would need to be priced at around £11k to achieve an eight year payback. Although this price level is available in mature european markets, the UK still has a way to go. To put this into context, Tesco's current prices would likely break even in year 11 and prices from the likes of e.on probably in year 15, but of course, if a replacement inverter is required after say ten years, you could add a couple of extra years to both, so Tesco's around year 13 and e.on about year 17, which is probably double the payback which a large proportion of the industry quote in sales literature. Consider also that the closer to the 4kWp threshold the lower the cost/kWp, therefore 3.99kWp is the best that it gets for payback in the sub 4kWp FiT banding and represents a huge roof area (30m2 +) to have in one plane.

A challenge to any MCS installers .... if you can supply and fully install a 4kWp system using 'quality' components and believe that an eight year payback is achieveable, please PM me with details as there is an installation available which could interest you .... remember, I believe that 8 years is £11k, but I am willing to discuss the variables ......

<Breath held awaiting an influx of PMs .... >

Regards

csae

zeupater wrote: »

Hi All

I tend to agree with Cardew's post above.

Using very reasonable assumptions on the costs & variables involved and using my S/W roof as an example you will find that a 4kWp installation would need to be priced at around £11k to achieve an eight year payback. Although this price level is available in mature european markets, the UK still has a way to go. To put this into context, Tesco's current prices would likely break even in year 11 and prices from the likes of e.on probably in year 15, but of course, if a replacement inverter is required after say ten years, you could add a couple of extra years to both, so Tesco's around year 13 and e.on about year 17, which is probably double the payback which a large proportion of the industry quote in sales literature. Consider also that the closer to the 4kWp threshold the lower the cost/kWp, therefore 3.99kWp is the best that it gets for payback in the sub 4kWp FiT banding and represents a huge roof area (30m2 +) to have in one plane.

A challenge to any MCS installers .... if you can supply and fully install a 4kWp system using 'quality' components and believe that an eight year payback is achieveable, please PM me with details as there is an installation available which could interest you .... remember, I believe that 8 years is £11k, but I am willing to discuss the variables ......

<Breath held awaiting an influx of PMs .... >

Regards

Hi Zeupater. I don't think you will get too many takers to be honest.

A decent spec 4kwp kit will cost most installers more than 11 grand to buy in.

I have a pricelist in front of me at present and that size kit would cost me 11,192.87 inc VAT.

Let me honest and open about myself. I am part of a company that sells and installs Solar PV here in the East Midlands, I will make no bones about it.

However I have read this thread (and others on here) regarding payback and Installation charges and I have to say, it is a great source to me to point our clients to.

When I go into the clients house/workplace, I explain my role, our products, the pros and cons of PV,the approximate price for an installation on their house and then a page full of Internet resource points, starting with the MSE Forum.

I then leave my number with them and actively encourage them to call me with any other queries.

This thread has proven invaluable to many people in helping them make a decision, one way or the other. We are firmly in the "New School" when it comes to selling, let people make their own mind up, it makes for a much happier install when the client has decided it is for them.

So may I take this opportunity to thank all the reasoned debaters on here for making cases for and against Solar PV, it really makes it easier when people can engage themselves and decide whether it is for them or not.

One little tip for all those that are keen but don't have the funds available at present, is buy a small kit, 0.5kwp, get your FIT certificate at the current 41.3p and then add to the system later on.

Yes, you will get the Scaffold charges again etc but you are now guaranteed your early adopters Feed-In rate.

Many thanks CSAE:)

Cardew

csae wrote: »

One little tip for all those that are keen but don't have the funds available at present, is buy a small kit, 0.5kwp, get your FIT certificate at the current 41.3p and then add to the system later on.

Yes, you will get the Scaffold charges again etc but you are now guaranteed your early adopters Feed-In rate.

Many thanks CSAE:)

Interesting!

However I wonder how the economics stack up.

If you adopted that ploy(the 0.5kWp system) and say waited 2-3 years to top it up to 4kWp the panels hopefully will have reduced in price.

However:
A. New scaffolding required.

B. New inverter - presumably?

C. Loss of FITs, electricity exported and consumed in house.

D. You have also 'used up' 2-3 years of the 25 year period(it is the latter period where the system really reaps benefits)

If you 'don't have the funds available' I would have thought that the cost of borrowing the the money - say £10k - for a couple of years would be under £1k.

Weigh that cost of borrowing against lost income and costs shown above, and it would not be 'money saving' to adopt the suggested ploy.

Rodders57

On the issue of payback it would depend also on where in the country you live, for example if you lived in Cornwall with a 6 module array you would produce more energy than say the same sized system fitted in say Cumbria. It is a long term investment. However I think that sometimes the issue of payback is a British thing, I mean to say what is the payback, on a 15k car, or kitchen. The subsidy for solar PV is a good incentive and is paid for by the energy companies to lower their carbon tax, it does not cost the tax payer a penny. If you can afford the capitol investment then go for it.

csae

Cardew wrote: »

Interesting!

However I wonder how the economics stack up.

If you adopted that ploy(the 0.5kWp system) and say waited 2-3 years to top it up to 4kWp the panels hopefully will have reduced in price.

However:
A. New scaffolding required.

B. New inverter - presumably?

C. Loss of FITs, electricity exported and consumed in house.

D. You have also 'used up' 2-3 years of the 25 year period(it is the latter period where the system really reaps benefits)

If you 'don't have the funds available' I would have thought that the cost of borrowing the the money - say £10k - for a couple of years would be under £1k.

Weigh that cost of borrowing against lost income and costs shown above, and it would not be 'money saving' to adopt the suggested ploy.

Cardew. I agree 100 percent, it isn't the thriftiest way to get on the FITS ladder, far from it, but it is "one way" onto the ladder, nonetheless.However, should you just watch the TV all day and go to sleep at sundown, you will have no bill..;)

Whilst we are on the subject of financing a system, I have spent a lot of time contacting Finance companies about funding the systems for clients and at present, the answer is a resounding "No".

Hitachi Capital are commited to a few long standing clients of theirs, but are not open to new business. Barclays won't do it, full stop...Yet!

The general consensus amongst Finance operators is that because the system belongs to the house and not the occupier, they have no-one to assign the debt to. And because this is a Government-led incentive, they won't lend on a Governments whim.

2 very valid points really and will result in a lot of people not being able to adopt MicroGeneration.

Thanks Csae...:)

csae

Rodders57 wrote: »

On the issue of payback it would depend also on where in the country you live, for example if you lived in Cornwall with a 6 module array you would produce more energy than say the same sized system fitted in say Cumbria. It is a long term investment. However I think that sometimes the issue of payback is a British thing, I mean to say what is the payback, on a 15k car, or kitchen. The subsidy for solar PV is a good incentive and is paid for by the energy companies to lower their carbon tax, it does not cost the tax payer a penny. If you can afford the capitol investment then go for it.

Payback is indeed a very British thing, not exclusive to us Brits though.

A 15k car is a very good example, purely a status/impulsive purchase, which, let's be honest, we all need to have one at somepoint, whether it be a car,motorbike, jetski, boat, exotic holiday, and with such purchases we know there are hideous ROI's( or lack of), but we still do it.

Solar PV, in its present form, is an exception to the above, I agree is doesn't have the same buzz/feelgood factor like a motorbike would, but it is the only thing that will "earn" it's keep if you like.

At Present Solar PV doesn't have any "labels" attached to it, but it will do in the next few years.It will have the same effect as Mobile phones have had, all be it on a lesser scale because of the barrier to entry, namely the initial investment.

Cheers Csae...:)

zeupater

csae wrote: »

Hi Zeupater. I don't think you will get too many takers to be honest.

A decent spec 4kwp kit will cost most installers more than 11 grand to buy in.

I have a pricelist in front of me at present and that size kit would cost me 11,192.87 inc VAT.

Let me honest and open about myself. I am part of a company that sells and installs Solar PV here in the East Midlands, I will make no bones about it.

However I have read this thread (and others on here) regarding payback and Installation charges and I have to say, it is a great source to me to point our clients to.

When I go into the clients house/workplace, I explain my role, our products, the pros and cons of PV,the approximate price for an installation on their house and then a page full of Internet resource points, starting with the MSE Forum.

I then leave my number with them and actively encourage them to call me with any other queries.

This thread has proven invaluable to many people in helping them make a decision, one way or the other. We are firmly in the "New School" when it comes to selling, let people make their own mind up, it makes for a much happier install when the client has decided it is for them.

So may I take this opportunity to thank all the reasoned debaters on here for making cases for and against Solar PV, it really makes it easier when people can engage themselves and decide whether it is for them or not.

One little tip for all those that are keen but don't have the funds available at present, is buy a small kit, 0.5kwp, get your FIT certificate at the current 41.3p and then add to the system later on.

Yes, you will get the Scaffold charges again etc but you are now guaranteed your early adopters Feed-In rate.

Many thanks CSAE:)

Hi

I agree and expect to see very few PMs, but at least the idea of an eight year payback has been put into context.

Regarding the buy in prices for MCS installers being £11192.87 inc VAT, I have a couple of observations .....

Firstly, and correct me if I'm wrong, but the price quoted would include VAT at the standad rate of 17.5% and an MCS installation is VAT rated at 5% .... where is the 12.5% difference accounted for in the pricing as surely there is a tax rebate available to the MCS installer on the installation ??? ...... Secondly, the wholesale prices to the UK market are obviously well inflated at the moment when compared to european typical prices, this is fully supported by trade market price research (http://www.solarserver.com/service/pvx-spot-market-price-index-solar-pv-modules.html), where the latest pricing shows an 8.4% reduction in european manufactured pv panels so far this year resulting in a typical wholesale buy price of €1.86/Wp which converts to £1.55/Wp, therefore 4kWp of panels would cost £6200. Throw an inverter, some brackets and metalwork, isolation switches, cabling along with a generation meter I'd be well surprised if the total net price would be any more than £8.5k in europe resulting in an average fully installed price which is less than the UK materials list price quoted, so it certainly looks like the UK wholesalers and many installers are currently 'making hay' ... (forgive the pun) ... 'while the sun shines' .........

Regards