Solar FIT tariff and electricity charges

Squizz

Ok, so I'm a bit green (in more ways than 1) I'm interested and have got a quote for solar Pv and have 2 questions.
1 - Why does the benefit of PV go down the more you export?
2 - I need to change from elec standard tariff so should I avoid those with standing charges if I get the panels fitted?

I'm just a bit confused with all the figures and things.

sassow

Hi, I work for a company in the north west which sells and installs solarvoltaic panels. The FIT does not reduce, the more you put back into the grid.
You will be paid 41.3p for EVERY unit of electricity that is produced by your panels, even if you use it yourself.
For any units left that go back to the grid, you will recieve another 3p, so if for example you are on hols, your roof will be earning you 44.3p per unit, sent back to the grid. All earnings from the FIT are TAX FREE:T Index linked, all guarenteed for 25 years:j.
This scheme gives a return of c.8% pa, better than 2% in the bank I think.

deondublin

do you know anyone who has got a FIT - i love the idea but not sure if its all a bit tooo good to be true...

keep us posted

Cardew

I suspect what the OP means is that if you buy a system larger than 4kWp you get a lower rate of FIT.*

Thousands of posts about PV in the 'green' forum including quite a few posters who have installed PV systems.

Lots of posts also about the economics of PV systems. IMO there is far too much talk of 8% return etc. If I invest £15,000 @ any rate of interest, at any time in the future I still have £15,000 in the bank plus any interest accrued.

If you invest £15,000 in a PV system, you have nothing in the bank and a set of panels on the roof. It is not until the income from those panels, invested in a bank when received, exceeds the £15,000 plus interest have you made a better investment.

That said, every indication is that it will be a very good long term investment. However the 'break even' point will be 10 to 15 years depending on a load of unknown factors - interest rates, inflation rates, repairs required etc etc.

* The OP could also mean that you only get 3p/kWh for exported electricity, however a kWh used in the house(and hence not exported) is worth around 10p. You can at the moment elect to receive 3p/kWh for 50% of your generated electricity - regardless of how much you use.

grahamc2003

sassow wrote: »

This scheme gives a return of c.8% pa, better than 2% in the bank I think.

You cannot compare the gross return from the pv system with a bank account return.

The closest financial product for comparison would be an annuity (i.e. where, once bought, your cash pile is spent, just like with pv), where the returns, while poor, are much higher than 2% - but there are differences even with annuities which make the comparison difficult.

I'm not sure whether you have taken into account in your 8% figure at least one replacement of the inverter, which I am led to believe would cost much of one one year's worth of fit returns per replacement.

I'm not saying it isn't worth taking advantage of (if you have a south facing large roof with no shadows), just that it's best to do so with a reasonably true picture of the real financial situation (and there are small risks in there too).

Squizz

Hello and thank you for your responses. I know there is a dedicated solar section but I haven't found any answsers yet.

Just to try and clarify what info I'm after and I think Cardew has it?

All the saving calculators for Solar PV indicate that the "return/benefits" value of the system decrease the more units that you export and I'm a bit confused by this as we thought it would increase.

We can only fit a small system around 1.5KWp.

And the second question was should we avoid ordinary electricity accounts that charge a standing charge as isn't this in effect paying for electricity whether you are using any or not.

With husband breathing over my shoulder to hurry as he wants the computer I feel I have made this more confusing!!

Squizz

Ok folks so we haven't bitten the bullet and committed yet but we have begun the electricity supplier switch and have an opted for a no standing charge online tariff.

I'm still concerned though as to whether or not this is the right choice if we do go ahead with the solar.

Is there any way to calculate if paying a standing charge or not paying a standing charge makes a difference if you are saving electricity by generating your own? Obviously we only have a small 14 day window to change our minds and any info would be appreciated.

mackemdave

Yes you should avoid tariffs that have standing charges