Sola profit time frame

zeupater

csae wrote: »

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Hi there. Swapping the inverter would take a couple of hours, taking into account testing etc( and tea drinking, with a few biccies).

At present, it is inverters that cause the hold ups in any installation, supply isn't keeping up with demand.But you can bet your bottom dollar that in 12 years time, they are less than 500 quid fitted!.

Thanks CSAE...:)

Hi csae

I understand tht inverter prices are falling rapidly, it seems that factory gate prices have reduced by 30% in the last year, but the consumers are not yet seeing this reflected in prices to them. In this new industry sector no-one has a long term crystal ball so it would be useful to understand the direct replacement cost if an inverter on a current price basis and then allow individuals to form their own views of future pricing/costs.

My experience in a recent gas boiler replacement suggests that the a £700 equipment purchase price and a day of labour adds up to £2200, the reasoning given for the high installation cost being very similar to those used in other consumer facing trades, these being safety, responsibility, membership, overheads etc.

Taking an analogy which is much closer to inverters than gas boilers, a consumer unit which costs about £80 will probably cost the consumer more than '500 quid fitted' at current prices, not those in 12 years time, the reasong for the high installation costs again being 'safety, responsibility, membership, overheads etc.'.

The question remains that what would the current day costs of replacing an inverter with either a SB3800 or IG40 unit typically be ?, when we know we make our own predictions on future price movements.

Regards

csae

zeupater wrote: »

Hi csae

I understand tht inverter prices are falling rapidly, it seems that factory gate prices have reduced by 30% in the last year, but the consumers are not yet seeing this reflected in prices to them. In this new industry sector no-one has a long term crystal ball so it would be useful to understand the direct replacement cost if an inverter on a current price basis and then allow individuals to form their own views of future pricing/costs.

My experience in a recent gas boiler replacement suggests that the a £700 equipment purchase price and a day of labour adds up to £2200, the reasoning given for the high installation cost being very similar to those used in other consumer facing trades, these being safety, responsibility, membership, overheads etc.

Taking an analogy which is much closer to inverters than gas boilers, a consumer unit which costs about £80 will probably cost the consumer more than '500 quid fitted' at current prices, not those in 12 years time, the reasong for the high installation costs again being 'safety, responsibility, membership, overheads etc.'.

The question remains that what would the current day costs of replacing an inverter with either a SB3800 or IG40 unit typically be ?, when we know we make our own predictions on future price movements.

Regards

Hi Zeu.

I am getting the impression that you aren't a fan of the way things are priced at present?..;)

I am struggling to see why you don't appreciate installation costs that companies may charge. Lets use your boiler example, the boiler was listed at 700 quid, plus vat I expect. Why didn't you buy it at that and fit it yourself?

Mmm. I expect it was because 1, You couldn't, 2, You didn't complete a 4/5 year apprenticeship and become time served. 3,You aren't Gas Safe registered. 4, You aren't insured and trained in the Gas Safe boiler module. I could go on and on and on.

In all examples like this, we have to pay for experience and reassurance, we have to pay for someone having the foresight to set a company up, at considerable expense, so you can have your boiler swapped when it reaches the end of it's useful life, without you having to go through all of the above, "Just to change" your boiler.

All industries are the same, they aren't started just to give the end user a "bargain" without any of the leg work.

In most trades today, you have to be "Trained" in absolutely everything, this training isn't free, it is what the HSE deem necessary and costs a fortune because of it. Unfortunately, these costs can't just be swallowed, they are part of the mark up.

Now because I don't posess a crystal ball, I can't catagorically tell you what an inverter may cost you to replace and install in 12 years time. My gut instinct is that it will less than half of todays prices.

To replace one today, would cost you 250 plus vat labour on top of the inverter cost, because the person commisioning it has had to be trained and become accredited at a considerable cost, oh and without him, you don't get your FITS!!

Thanks CSAE:)

zeupater

csae wrote: »

Hi Zeu.

I am getting the impression that you aren't a fan of the way things are priced at present?..;)

I am struggling to see why you don't appreciate installation costs that companies may charge. Lets use your boiler example, the boiler was listed at 700 quid, plus vat I expect. Why didn't you buy it at that and fit it yourself?

Mmm. I expect it was because 1, You couldn't, 2, You didn't complete a 4/5 year apprenticeship and become time served. 3,You aren't Gas Safe registered. 4, You aren't insured and trained in the Gas Safe boiler module. I could go on and on and on.

In all examples like this, we have to pay for experience and reassurance, we have to pay for someone having the foresight to set a company up, at considerable expense, so you can have your boiler swapped when it reaches the end of it's useful life, without you having to go through all of the above, "Just to change" your boiler.

All industries are the same, they aren't started just to give the end user a "bargain" without any of the leg work.

In most trades today, you have to be "Trained" in absolutely everything, this training isn't free, it is what the HSE deem necessary and costs a fortune because of it. Unfortunately, these costs can't just be swallowed, they are part of the mark up.

Now because I don't posess a crystal ball, I can't catagorically tell you what an inverter may cost you to replace and install in 12 years time. My gut instinct is that it will less than half of todays prices.

To replace one today, would cost you 250 plus vat labour on top of the inverter cost, because the person commisioning it has had to be trained and become accredited at a considerable cost, oh and without him, you don't get your FITS!!

Thanks CSAE:)

Hi csae

Thanks for the information on the cost of the labour, that only leaves the mark-up on the supplied unit as I suppose that anyone contracted to replace the inverter would expect to make a margin on the supply. Internet sources suggest that a 4kWp inverter would currently wholesale for anything between £1400 & £2500. My experience is that most companies are very reluctant to install on a labour only basis due to both guarantee/liability and loss of potential margin and that supply prices will tend to be list+, with list probably being taken as being £2200(ish)+VAT. Let's now assume that a nominal 25% margin (is this reasonable ??) is added for administration and profit we get to an installed price of £3000+VAT.

Regarding myself not being a fan of the way that installations are currently charged in the UK, you're probably correct. When trade bodies lobby the government to 'protect the public against themselves' and pass legislation which effective creates anti-competitive supply cartels which ramp up profit margins there's definately a problem. I know people who can strip helicopter and aircraft engines and completely rebuild them, but due to recent legislation can't touch their own gas boiler (or can they ?), then again I know other highly educated people who design electrical & electronic components and effectively aren't allowed to fit an extension socket or lightswitch in their own home .... the lunatics haven't taken over yet, but they're a long way down the path.

What I am attemping to convey is that there needs to be much more transparency on the guidance of what a replacement inverter would cost. Guide replacement prices I've seen in paperwork received and sales literature doesn't seem to reflect the true cost, perhaps it would be better if the industry would be a little more 'open' and suggest that a replacement inverter would likely cost between 2 and 3 years of FiT payments.

Regards

smartn

zeupater wrote: »

Hi csae

Thanks for the information on the cost of the labour, that only leaves the mark-up on the supplied unit as I suppose that anyone contracted to replace the inverter would expect to make a margin on the supply. Internet sources suggest that a 4kWp inverter would currently wholesale for anything between £1400 & £2500. My experience is that most companies are very reluctant to install on a labour only basis due to both guarantee/liability and loss of potential margin and that supply prices will tend to be list+, with list probably being taken as being £2200(ish)+VAT. Let's now assume that a nominal 25% margin (is this reasonable ??) is added for administration and profit we get to an installed price of £3000+VAT.

Regarding myself not being a fan of the way that installations are currently charged in the UK, you're probably correct. When trade bodies lobby the government to 'protect the public against themselves' and pass legislation which effective creates anti-competitive supply cartels which ramp up profit margins there's definately a problem. I know people who can strip helicopter and aircraft engines and completely rebuild them, but due to recent legislation can't touch their own gas boiler (or can they ?), then again I know other highly educated people who design electrical & electronic components and effectively aren't allowed to fit an extension socket or lightswitch in their own home .... the lunatics haven't taken over yet, but they're a long way down the path.

What I am attemping to convey is that there needs to be much more transparency on the guidance of what a replacement inverter would cost. Guide replacement prices I've seen in paperwork received and sales literature doesn't seem to reflect the true cost, perhaps it would be better if the industry would be a little more 'open' and suggest that a replacement inverter would likely cost between 2 and 3 years of FiT payments.

Regards

I'm happy with the guidance provided in the literature I received from the green project about a replacement inverter costing in the region of £1500 fitted. I still think it will probably be less than this in 12 years time as it is a technology item and costs will come down over time (as is illustrated in the 30% drop in prices of inverters over the last 12 months even with a supply shortage). I feel your figures are somewhat pessimistic, but I guess we wont know for 12 years or so.

zeupater

smartn wrote: »

I'm happy with the guidance provided in the literature I received from the green project about a replacement inverter costing in the region of £1500 fitted. I still think it will probably be less than this in 12 years time as it is a technology item and costs will come down over time (as is illustrated in the 30% drop in prices of inverters over the last 12 months even with a supply shortage). I feel your figures are somewhat pessimistic, but I guess we wont know for 12 years or so.

Hi smartn

Don't forget that my figures are based on a 4kWp system. I've just looked (t'internet again !) and can see 2kW inverters such as the IG20 being offered at around the £1200 mark, so £1500+VAT fitted would probably look about right if the installer was to forgo a healthy equipment mark-up (!). However, even at £1500+VAT(5%?) for a replacement inverter the case stands that your 2.12kWp would probably attract £680(ish) of FiT payments/year therefore about 2 years 4 months of FiT to recover the cost, which falls into the 2 to 3 years of FiT payment bracket raised in the referenced post.

Regards

csae

zeupater wrote: »

Hi csae

Thanks for the information on the cost of the labour, that only leaves the mark-up on the supplied unit as I suppose that anyone contracted to replace the inverter would expect to make a margin on the supply. Internet sources suggest that a 4kWp inverter would currently wholesale for anything between £1400 & £2500. My experience is that most companies are very reluctant to install on a labour only basis due to both guarantee/liability and loss of potential margin and that supply prices will tend to be list+, with list probably being taken as being £2200(ish)+VAT. Let's now assume that a nominal 25% margin (is this reasonable ??) is added for administration and profit we get to an installed price of £3000+VAT.

Regarding myself not being a fan of the way that installations are currently charged in the UK, you're probably correct. When trade bodies lobby the government to 'protect the public against themselves' and pass legislation which effective creates anti-competitive supply cartels which ramp up profit margins there's definately a problem. I know people who can strip helicopter and aircraft engines and completely rebuild them, but due to recent legislation can't touch their own gas boiler (or can they ?), then again I know other highly educated people who design electrical & electronic components and effectively aren't allowed to fit an extension socket or lightswitch in their own home .... the lunatics haven't taken over yet, but they're a long way down the path.

What I am attemping to convey is that there needs to be much more transparency on the guidance of what a replacement inverter would cost. Guide replacement prices I've seen in paperwork received and sales literature doesn't seem to reflect the true cost, perhaps it would be better if the industry would be a little more 'open' and suggest that a replacement inverter would likely cost between 2 and 3 years of FiT payments.

Regards

Morning Zeu.

I think you are probably a little bit too "wrapped" up in the "being conned" aspect in all of this to be honest.

As it stands today, you can easily go out and buy your own equipment, whole kits or individual parts. The only stipulation to qualify for FITS is that it is MCS approved kit, you can even go as far as installing it yourself!

Obviously a MCS installer isn't going to commision the array unless it is thoroughly inspected, so the time spent doing that is nearly equal to have them install it in the first place. Let's say you were proficient in electrics and you knew a MCS installer, things would be different in terms of cost.

Many firms employ a fit only option in many trades, they guarantee the workmanship, the customer has bought the product, so they have the issues with that should they arise.

Now if that "product" should go wrong twice in 4 years, you have now paid the Installer 3 times to come and replace the product,(once to fit initially, twice thereafter), that you have had the grief of getting exchanged etc.

Do you now see the benefit of paying their price?.

Incidentally, we actively encourage people to buy their own kits, particularly the VAT registered clients, because there is a lot of VAT being "lost" in a purchase of a 4kwp kit that they can't "get at" if we purchase on their behalf.

As regards the transparant nature of the "true" cost of replacing an Inverter. True as in they can only offer todays price as an indicator, Smartn has already given one, one from a genuine quote too!.

My recommendation to anyone getting SolarPV is to have this written into the contract, that if an inverter needs replacing out of warranty, the installer will provide labour F.O.C. That way you are only paying for the Inverter, whatever its price in 12-25 years time

Most reputable firms are Electrical firms first and foremost ,and Solar sits alongside, although it may look like they are solely Solar, the good ones aren't, so fears of not being around should not raise too many questions.

Thanks CSAE...:)

zeupater

csae wrote: »

Morning Zeu.

I think you are probably a little bit too "wrapped" up in the "being conned" aspect in all of this to be honest.

As it stands today, you can easily go out and buy your own equipment, whole kits or individual parts. The only stipulation to qualify for FITS is that it is MCS approved kit, you can even go as far as installing it yourself!

Obviously a MCS installer isn't going to commision the array unless it is thoroughly inspected, so the time spent doing that is nearly equal to have them install it in the first place. Let's say you were proficient in electrics and you knew a MCS installer, things would be different in terms of cost.

Many firms employ a fit only option in many trades, they guarantee the workmanship, the customer has bought the product, so they have the issues with that should they arise.

Now if that "product" should go wrong twice in 4 years, you have now paid the Installer 3 times to come and replace the product,(once to fit initially, twice thereafter), that you have had the grief of getting exchanged etc.

Do you now see the benefit of paying their price?.

Incidentally, we actively encourage people to buy their own kits, particularly the VAT registered clients, because there is a lot of VAT being "lost" in a purchase of a 4kwp kit that they can't "get at" if we purchase on their behalf.

As regards the transparant nature of the "true" cost of replacing an Inverter. True as in they can only offer todays price as an indicator, Smartn has already given one, one from a genuine quote too!.

My recommendation to anyone getting SolarPV is to have this written into the contract, that if an inverter needs replacing out of warranty, the installer will provide labour F.O.C. That way you are only paying for the Inverter, whatever its price in 12-25 years time

Most reputable firms are Electrical firms first and foremost ,and Solar sits alongside, although it may look like they are solely Solar, the good ones aren't, so fears of not being around should not raise too many questions.

Thanks CSAE...:)

Hi csae

I think that in many ways there's not a lot of difference between consumers 'being conned' and suppliers not providing 'open & transparent' information if there is a definate intent to mislead on incurred costs in order to justify inflated prices.

We seem to have a situation where we agree that the current UK pv price structure is considerably higher than those available in comparable, but more mature, european markets and that this is due to the logistics stream and MCS installers charging inflated prices ('making hay whilst the sun shines') because they can currently do so. There is a situation where UK consumers currently, in the main, have a general lack of understanding of a 'new' offering and although have a wish to help the environment would not even consider solar pv without the incentive of the FiT payment and the industry at large is taking advantage whilst they can..

What really seems to cause a little concern is that having recognised that prices are currently inflated there is still an attempted defence that margins are tight. I accept that any electrical company who gets involved in the MCS program will attract initial costs for doing so, these being training, registration, assessment, change of procedures etc, but any organisation which is currently ISO9000 registered should really breeze through the process. Let's delve a little deeper by looking at the effect of amortisation of these extra costs, as would be done for any large capital item, and assume that they are spread across an average of say 6 installations per month for 12 months and the nominal additional costs were a hefty £25k for this size organisation .... the additional cost per install would be around £350, so the low hundreds, not the high thousands which are being defended and charged.

Regarding smartn's price being from a genuine quote, I would be surprised if this was anything other than a standard general note on a quotation describing the cost of the inverter as being 'around £1500' as this is exactly what I have seen on a range of quotations for various size inverters/arrays and therefore cannot be regarded as being a 'true' current replacement cost.

For the benefit of others reading this thread I also think that clarification on the VAT status difference in the posted remark .... ' As it stands today, you can easily go out and buy your own equipment, whole kits or individual parts. The only stipulation to qualify for FITS is that it is MCS approved kit, you can even go as far as installing it yourself!' .... is posted, it would also be good to confirm that the second major stipulation of the FiT scheme is that the installation must be signed off by an MCS installer.

Regards

Cardew

It is just a classic case of the MCS 'cartel' will charge 'what the market will bear.' In many ways you cannot blame them for not wanting to kill the Golden Goose; but please spare us from disingenuous justifications.

It seems strange that I can self-build a house or a large extension and for a modest fee the council planning office will check that I am conforming to planning/building regulations, as well as offer advice..

Yet whilst I can fit Gas CH or Solar PV myself, I am stuck when it comes to getting official approval, because the Government have, in their wisdom, passed responsibility to a commercial organisation who will protect their self interests.

csae

Cardew wrote: »

It is just a classic case of the MCS 'cartel' will charge 'what the market will bear.' In many ways you cannot blame them for not wanting to kill the Golden Goose; but please spare us from disingenuous justifications.

It seems strange that I can self-build a house or a large extension and for a modest fee the council planning office will check that I am conforming to planning/building regulations, as well as offer advice..

Yet whilst I can fit Gas CH or Solar PV myself, I am stuck when it comes to getting official approval, because the Government have, in their wisdom, passed responsibility to a commercial organisation who will protect their self interests.

And in the meantime protect thousands of people from death or serious injury to themselves through sheer pigheaded ignorance and inability!

:eek:

Cardew

csae wrote: »

And in the meantime protect thousands of people from death or serious injury to themselves through sheer pigheaded ignorance and inability!

:eek:

I suggest you are missing the point.

The Council will check my self-build,(for a modest fee) to make sure it is safe and protect me from death, serious injury or my pigheaded ignorance.

MCS installers and Gas safe fitters will not do the same because they wish to protect their 'cartel' which has been set up for them by the Government.

My criticism is directed at the Government, not tradesmen who want to protect their monopoly.