Solar Panel Guide Discussion

Cardew

Sirlaughalot wrote: »

Hi all,

I have just spent some time on the energy saving trust website and got figures of £9500 earnings from an investment of £7050 over the life time of the panels. We are located in the West Midlands with a 30% pitch and west facing roof. Having surveyed our local estate the take up rate for solar panels i would say is 3 on well over 500 houses.
Am i missing something as i cant see how under any circumstances this venture makes any kind of financial sense at all!

When the FIT proposals were first announced some 3 years ago, the cost of a system, the FIT rate and long term interest rates were all much higher than at present.

There were countless posts on MSE giving their estimate of the 'break even' point. i.e. the point at which the capital cost of the PV system invested at x% would be overtaken by the income and electricity savings(also invested at the same x%)

The unknowns of course were(and still are) future interest rates, inflation rates, electricity price inflation and repair costs.

IMO the sum 'invested' in PV should be treated much like a annuity i.e. you need to live x years before the investment in an annuity starts making a 'profit.'

In the same way I think it makes sense to estimate how many years it takes before making a profit on your PV investment.

Sirlaughalot

Martyn1981 wrote: »

Hello SL. Sorry, didn't realise what the ceramic heater bit meant. If you were thinking about leaving something on (that is optional) then burnt fingers are very likely. get it wrong and you're importing expensive leccy. There are devices, talked about on other threads, like this one:

https://forums.moneysavingexpert.com/discussion/4152489

that can direct excess generation via proportional controls, but you'll need to do some maths to see if they'll be financially viable for you.




Quick check again using PVGIS (I strongly recommend you have a play). Stuck a random pin in Birmingham, 4kWp and azimuth -110deg. [The azimuth is your point of interest, which for us is the sun, to the south, so before it is a minus, east is -90, and after it is a plus, west is +90.] ENE is approx -110.

Then tried a selection of roof pitches. 20d gave annual generation of 2,900kWh's. 50d was 2,420. So big difference. But 30 to 40 not so bad - 30d was 2,750, 35d was 2,680 and 40d was 2,600.

Shading is important, and there are ways to reduce the effect, but you can't eliminate it. Also, not ideal to install anywhere with a 'N' in it. Ignore my WNW, it is extremely marginal, and was to maximise generation, not income. For the same 'pin' location as above, PVGIS gives 3,730 for due south at 35d pitch, so ENE is a big drop, and will affect your returns significantly.

Ok, serious danger of me flooding you with too much info now (too late perhaps!). So I'll stop. But ask anything, happy to help. Also there are probably lots of old threads that cover many of the issues - but you might need directions to particular posts, on particular threads.

Your best bet, if you're still interested, might be to arrange for a few installers to pop round and assess your situation. You'll learn loads, and get a better idea on prices.

Mart.

Great stuff once again Mart,

Have spoken to a national company who install the panels free of charge just to get a gauge of where i stand. They have come back with a reply that my property is not suitable for soalr panels:mad: So between us it looks like our calculations are correct.
What is cofusing me though is the small take up rate of solar panels on the estate as there are plenty of properties with a different orientation to my property

I will speak to a few local company`s to see what they say but initially the signs don`t look good.

Thanks again

Cardew

Sirlaughalot wrote: »

Great stuff once again Mart,

Have spoken to a national company who install the panels free of charge just to get a gauge of where i stand. They have come back with a reply that my property is not suitable for soalr panels:mad: So between us it looks like our calculations are correct.
What is cofusing me though is the small take up rate of solar panels on the estate as there are plenty of properties with a different orientation to my property

I will speak to a few local company`s to see what they say but initially the signs don`t look good.

Thanks again

I think virtually every company who fits free panels(Rent -a Roof) will only consider properties with 'perfect' orientation and no shading.

Is it so surprising that there are so few houses on the estate installing PV?

Taking a £6,000 'investment' for PV and using Martyn's estimate of £630pa income you would need to take a very long term view to even consider PV.

If someone offered an investment where it took, say 12 to 15 years to break even and start generating a profit; I wonder how many people would take up the offer.

Martyn1981

Sirlaughalot wrote: »

Great stuff once again Mart,

Have spoken to a national company who install the panels free of charge just to get a gauge of where i stand. They have come back with a reply that my property is not suitable for soalr panels:mad: So between us it looks like our calculations are correct.
What is cofusing me though is the small take up rate of solar panels on the estate as there are plenty of properties with a different orientation to my property

I will speak to a few local company`s to see what they say but initially the signs don`t look good.

Thanks again

I think you're playing it smart. Since your property isn't ideal best to stay paranoid and don't rush in. There was a rent-a-roofer (RaR) on recently saying that they have tight criteria now. Remember they don't get the leccy savings, get a slightly lower FIT and will have to pay tax on any profits. I think they really only want properties/installs that sit between SE & SW.

For the ENE, if no bad shading, you are probably looking at something like £530pa income (FIT £400, Export £60, leccy savings £70), so you'll probably not want to pay more than £5.5k, giving you a gross return of about 10%.

If you have an ENE, does that mean the W roof is actually WSW? If lots of shading, then forget it, but if the shading isn't too bad, but always affecting a panel or two, then there are systems to mitigate this, such as SolarEdge (which I have on my shady WNW roof).

Since you are obviously interested, I wouldn't stop thinking about it, but I'd definitely suggest you continue to work from a position of 'probably not but willing to be convinced' rather than blindly assuming it is ok.

This thread might be interesting, as 'Elantan' had too many negatives:

https://forums.moneysavingexpert.com/discussion/4549037

and this thread where Elantan again was asking about shade management systems:

https://forums.moneysavingexpert.com/discussion/4658103

Back to your local area - no idea! Where I live is similar, no real pattern. Comparing areas around me, properties here are about £180k, not much PV. 1 mile away to the East properties are about £140k and quite a lot of PV. 2 miles to West, near my sister, properties are around £300k, lots of solar thermal, but low levels of PV, and inbetween (1 mile to West) loads of flats (3&4 storey) and townhouses being built, all with PV.

There may be no rhyme nor reason to it. Could be down to disposable income - Very long time ago, chatting with a salesman for Encyclopedia Britannica, he said he got very few sales in Cardiff, but loads in the valley towns just above, he put it down to housing costs and disposable incomes. Personally, I reckon you'll go insane before calculating all the issues.

Mart.

Sirlaughalot

Cardew wrote: »

I think virtually every company who fits free panels(Rent -a Roof) will only consider properties with 'perfect' orientation and no shading.

Is it so surprising that there are so few houses on the estate installing PV?

Taking a £6,000 'investment' for PV and using Martyn's estimate of £630pa income you would need to take a very long term view to even consider PV.

If someone offered an investment where it took, say 12 to 15 years to break even and start generating a profit; I wonder how many people would take up the offer.

Hi Cardew,

Fair point you make but like any long term investment/endowemont/pension fund the real benefit comes towards the end / maturity of the investment. If you subscribe to the global warming theory there is also a feeling of doing your bit for future generations as well.
From a personal point of view the challenge of maximising electric efficiency is appealing but not at a financial cost to myself.
It`s pretty windy all year round where i live perhaps a wind farm plonked on the roof might be a better option lol!

EricMears

The rent-a-roof people can afford to be choosey - there's bound to be somebody with a better roof than yours. But you've only got one roof (probably) and will be getting the benefit of free units so could accept an installation they wouldn't.

You aren't of course forced to stick the things on the house roof - if your garden is large enough you can install them on a convenient (or even new) shed roof or you could even put them on a tracking array and get even better generation.

Cardew

Sirlaughalot wrote: »

Hi Cardew,

If you subscribe to the global warming theory there is also a feeling of doing your bit for future generations as well.

Hi,

Isn't the term 'Global Warming' discouraged by the environmental lobby in favour of Climate Change'.

That way if the planet gets warmer/colder/wetter/dryer they are covered;)

EricMears

Cardew wrote: »

Isn't the term 'Global Warming' discouraged by the environmental lobby in favour of Climate Change'.

That way if the planet gets warmer/colder/wetter/dryer they are covered

Absolutely !

Not forgetting of course that the climate has changed nearly every day for as long as I can remember.

orrery

I'm faced with the probability that I'm going to need a new roof (i.e. battens and tiles replacing with identical). This will mean having the solar PV panels taken down and then replaced exactly as they are now. This is the result of a persistant leak (in fact 2) which was repaired twice before the panels were fitted and has returned in the latest downpours. I've just had enough of it and want it sorted once and for all. It appears as though the house was extended many years ago and the tiles 'spaced' a little - presumably to save money.

Any implications, other than the, er ... cost!

Martyn1981

Sirlaughalot wrote: »

Hi Cardew,

Fair point you make but like any long term investment/endowemont/pension fund the real benefit comes towards the end / maturity of the investment. If you subscribe to the global warming theory there is also a feeling of doing your bit for future generations as well.
From a personal point of view the challenge of maximising electric efficiency is appealing but not at a financial cost to myself.
It`s pretty windy all year round where i live perhaps a wind farm plonked on the roof might be a better option lol!

I have to agree with you regarding the investment ‘view’. I fail to see why an investment that does better over a set time period, is judged critically on the basis of when cash balances intersect. It shouldn’t really have any bearing, unless there is an outside time factor, such as a property move.

My view on profit also doesn’t require waiting for capital repayment. For me, profit is reached when income exceeds costs, one of those costs being the cost of capital. Going back to my earlier post where I compared PV income to an ISA @ 3%. The starting numbers were £630 pa from PV and £7k cost, at the end I calculated the figure for £6k, being the price target I think you should aim for. But, to make things easier, instead of adding a new inverter in yr 12, I’m going to add £500 onto the initial price as a warranty extension. I’m also going to drop the leccy savings down to £80 (from £110). So when / where is the profit, what are the costs and income:-

Yr1
Income: £600
Costs:
1. Depreciation (as we no longer have the cash, but a depreciating asset instead), we could depreciate over the life of the PV, perhaps 25 to 40 yrs, but sticking with 20 yrs to match the FIT payment is simpler, so £6,500/20 = £325
2. Cost of capital, what we have given up, which is £6,500 @ 3% = £195

£600 – (£325 + £195) = £80 profit

Alternatively you could just compare the two investments:
Yr 1.
The ISA gives (£6,500@3%) £195
The PV (less depreciation) gives £275 or compared to the ISA a £80 profit

Yr 2.
The ISA gives (£6,695@3%) £201
The PV (less depreciation) gives £289* plus £18** = £307 or compared to the ISA a £106 profit

* £600 plus 3% index linking, minus 0.7% panel degradation = £614
** interest @ 3% on the £600 from yr1

Obviously, all of this is based purely on the financial issues, but as you mentioned, that is only the start, there is also the sizeable bonus, that clean leccy is being produced, in this example over 50MWhs in the first 20 years. And the raising of awareness regarding renewables and energy in general.

Mart.