Current PV panel prices

thescouselander

goldenspiral wrote: »

Total installed cost for 4kWh system is £14,500. The salesman knew his stuff. According to his officially approved figures it will produce 3432kWh pa and return around £66,500 over 25 years. This doesn't include an estimate on the price of electricity in 25 years time.

Sounds good, doesn't it? So why do I keep waking up worried? Here are my concerns.

I dont get it. 3432 kWh at 10p per unit is about £343 pa. So at todays prices thats only £8580 over 25 years.

I assume the salesman used the inflated sell back rate for the electricity that is/was available over the last few years. Personally I wouldn't bank on those rates being around for the full 25 years.

keith_r59

thescouselander wrote: »

I dont get it. 3432 kWh at 10p per unit is about £343 pa. So at todays prices thats only £8580 over 25 years.

I assume the salesman used the inflated sell back rate for the electricity that is/was available over the last few years. Personally I wouldn't bank on those rates being around for the full 25 years.

You get Feed in Tariff payments of 43.3p for each kWh of solar electricity generated plus an additional 3.1p for each kWh exported and this is over an above what you save by using less grid imported electricity.

It is generally accepted that you will achieve investment payback on a Solar PV system within 8 to 12 years depending on it's installation cost.

Feed in Tariff and Export rates will drop after April 2012 for new installations but personally I can't see them being removed for existing ones as all main political parties are in agreement on the renewables target.

thescouselander

keith_r59 wrote: »

You get Feed in Tariff payments of 43.3p for each kWh of solar electricity generated plus an additional 3.1p for each kWh exported and this is over an above what you save by using less grid imported electricity.

It is generally accepted that you will achieve investment payback on a Solar PV system within 8 to 12 years depending on it's installation cost.

Feed in Tariff and Export rates will drop after April 2012 for new installations but personally I can't see them being removed for existing ones as all main political parties are in agreement on the renewables target.

As I said, I don't think those rates will be around for long - I read somewhere the government is already talking about a backtrack on CO2 emission promises. Feed in rates of 43.3p per unit are pure lunacy and not sustainable in the long term IMO. Someone (I suspect the taxpayer) is making a massive loss on this arrangement.

If I was the OP I'd use the standard rate for electricity when doing the calculation just to be on the safe side.

zeupater

goldenspiral wrote: »

.........Total installed cost for 4kWh system is £14,500. The salesman knew his stuff. According to his officially approved figures it will produce 3432kWh pa and return around £66,500 over 25 years. This doesn't include an estimate on the price of electricity in 25 years time. ............

......... The other half is going on a south-facing ground-floor roof with a shallow pitch (almost perfect) but shaded until 10am by the terrace of of which our house is part. By 11:15 the array will be in full sun. Depending on time of year, by around 16:00 shadows start to fall due to a neighbour's trees, clearing again for a short while in the evening for about 5 months of the year. So I assume this half will be producing a lot less than the calculated figures and when the sun is very low in winter the top half will also be less efficient (being only 10-degrees) and slightly shaded by a chimney stack with 2x4 pots .....

Hi

Leaving everything else aside for the moment, I'd certainly be a little worried by basing the returns on 3432kWh/annum with the shading you describe, there's a possibility that the shade %age in the SAP approved calculation doesn't reflect what you've described above. Have you received quotations from other installers to compare the estimated generation figures with ?

HTH
Z

keith_r59

thescouselander wrote: »

As I said, I don't think those rates will be around for long - I read somewhere the government is already talking about a backtrack on CO2 emission promises. Feed in rates of 43.3p per unit are pure lunacy and not sustainable in the long term IMO. Someone (I suspect the taxpayer) is making a massive loss on this arrangement.

If I was the OP I'd use the standard rate for electricity when doing the calculation just to be on the safe side.

As I said, Feed in Tariffs will be reduced from April 2012 for new installations however small Solar PV systems installed up until then will attract the current rate of 43.3p index linked for 25 years.

Nothing I have seen coming from this Government indicates that this is likely to change therefore saying anything else is just pure speculation.

Cardew

goldenspiral wrote: »

Total installed cost for 4kWh system is £14,500. The salesman knew his stuff. According to his officially approved figures it will produce 3432kWh pa and return around £66,500 over 25 years. This doesn't include an estimate on the price of electricity in 25 years time.

.

Little puzzled about the phrase 'officially approved figures'.

3,432kWh pa from a 4kWp(note kWp not kWh) would be for a perfect South facing, non shaded site. So from your description you will get a lot less.

Secondly even if it was to produce 3,432kWh that would raise £1530 pa from FIT and selling 50% of generated output.

That over 25 years is £38,270 you can estimate another £100 a year from electricity saved in the house. £2,500.

So to reach £66,500 an inflation rate has to be estimated, as has the amount of electricity used in the house. - Whilst £66k might be a reasonable assumption - it is hardly 'official'.

thescouselander

keith_r59 wrote: »

As I said, Feed in Tariffs will be reduced from April 2012 for new installations however small Solar PV systems installed up until then will attract the current rate of 43.3p index linked for 25 years.

Nothing I have seen coming from this Government indicates that this is likely to change therefore saying anything else is just pure speculation.

I'd still be nervous about these economics. Would you invest into a business that relied on selling a product at over 4 times its worth on the open market? I certainly wouldn't.

The only reason this makes financial sense is because the feed in tariffs are heavily subsidised. As far as I can see this is a loss making enterprise and the overall business model is irrational. Some day someone is going to decide this is a waste of money and the subsides will come to an end - the only question is when?

keith_r59

thescouselander wrote: »

I'd still be nervous about these economics. Would you invest into a business that relied on selling a product at over 4 times its worth on the open market? I certainly wouldn't.

The only reason this makes financial sense is because the feed in tariffs are heavily subsidised. As far as I can see this is a loss making enterprise and the overall business model is irrational. Some day someone is going to decide this is a waste of money and the subsides will come to an end - the only question is when?

I wouldn't disagree that Solar PV is a high risk investment but then that is why the returns are more favourable than keeping your cash under your mattress.

I also don't disagree that the only reason it makes financial sense to install Solar PV is because of the generous FIT payments but as these are bank rolled from the environmental charge component on everyone's electricity bills they are currently sustainable.

With the UK legally committed to increasing its energy production from renewables, and with all the three main political parties agreeing on the current climate change agenda, I see no reason to believe that FITs for existing installations will be reduced.

thescouselander

keith_r59 wrote: »

I wouldn't disagree that Solar PV is a high risk investment but then that is why the returns are more favourable than keeping your cash under your mattress.

Then I think we agree - this is a high risk investment. Considering the risk involved I do think the potential return on investment is on the low side - there probably much better investments around.

keith_r59 wrote: »

I also don't disagree that the only reason it makes financial sense to install Solar PV is because of the generous FIT payments but as these are bank rolled from the environmental charge component on everyone's electricity bills they are currently sustainable.

To some extent yes but I expect the energy companies off set the loss they make on FIT against tax so it is actually the taxpayer picking up some of the the bill here - probably the accountants find ways to off sett nearly all of the loss in fact.

keith_r59 wrote: »

With the UK legally committed to increasing its energy production from renewables, and with all the three main political parties agreeing on the current climate change agenda, I see no reason to believe that FITs for existing installations will be reduced.

True but 25 years is a long time - I wouldn't like to predict what future governments may do over that timeframe.

zeupater

thescouselander wrote: »

...... I expect the energy companies off set the loss they make on FIT against tax so it is actually the taxpayer picking up some of the the bill here - probably the accountants find ways to off sett nearly all of the loss in fact ....

Hi

The energy companies do not make a loss on this. They are obliged to run the scheme by the government & finanace the FiT payments and cover their own costs for scheme administration through increased electricity prices across the board.

HTH
Z