Solar Panel Guide Discussion

partist

thenudeone wrote: »

Ahh. I must have missed something. Do S&SE shares now offer a 10-12% index-linked tax free income for 25 years, like solar panels?

Yes you have missed something.

You have omitted from your reckoning that the capital you spend on the solar panels has gone. After 5, 10, 25 years you cannot sell the solar panels. You might argue that £10K spent on solar panels puts £10K on the value of your house, but I wouldn't.

With an asset such as SSE shares, after 5, 10, 25 years they will be worth something, and the way energy prices are forecast to rise (and thus energy company profits) your SSE shares might very well go up in value.

You also overlook the chance that the 10-12% return on panels will diminish: panels lose efficiency over time; and you're betting that the advantageous feed in rates will persist indefinitely. And you assume zero maintenance costs. Rectifiers and other kit does not last for ever and can be expensive to replace.

So, for example, if we assume that after ten years your solar panels have zero value (OK, you might not agree), but if we assume that, after ten years you have got ten years worth of 10% returns - £10,000. But the SSE shares will probably be worth £10,000 at least, plus you have the dividends of, say, £5500 after tax: £15,500. And that assumes no increase in SSE's dividend or share price. And you don't have to pay to maintain the SSE shares. places to visit in the summer

But at least in the summer your place will at least be nice and warm for visitors.

BornAtTheRightTime

partist wrote: »

Yes you have missed something.

You have omitted from your reckoning that the capital you spend on the solar panels has gone. After 5, 10, 25 years you cannot sell the solar panels. You might argue that £10K spent on solar panels puts £10K on the value of your house, but I wouldn't.

With an asset such as SSE shares, after 5, 10, 25 years they will be worth something, and the way energy prices are forecast to rise (and thus energy company profits) your SSE shares might very well go up in value.

You also overlook the chance that the 10-12% return on panels will diminish: panels lose efficiency over time; and you're betting that the advantageous feed in rates will persist indefinitely. And you assume zero maintenance costs.

So, for example, if we assume that after ten years your solar panels have zero value (OK, you might not agree), but if we assume that, after ten years you have got ten years worth of 10% returns - £10,000. But the SSE shares will probably be worth £10,000 at least, plus you have the dividends of, say, £5500 after tax: £15,500. And that assumes no increase in SSE's dividend or share price. And you don't have to pay to maintain the SSE shares.

How does your maths change when you include the 15 years following when the solar PV owner will continue to receive 10% annual return from FiT and make savings against an electric bill that is forecast to rise 5% year on year? Any financial comparison should take this into account too.

keith_r59

partist wrote: »

With an asset such as SSE shares, after 5, 10, 25 years they will be worth something, and the way energy prices are forecast to rise (and thus energy company profits) your SSE shares might very well go up in value.

You also overlook the chance that the 10-12% return on panels will diminish: panels lose efficiency over time; and you're betting that the advantageous feed in rates will persist indefinitely. And you assume zero maintenance costs.

So, for example, if we assume that after ten years your solar panels have zero value (OK, you might not agree), but if we assume that, after ten years you have got ten years worth of 10% returns - £10,000. But the SSE shares will probably be worth £10,000 at least, plus you have the dividends of, say, £5500 after tax: £15,500. And that assumes no increase in SSE's dividend or share price. And you don't have to pay to maintain the SSE shares.

If you believe that you will make more money investing in SSE shares then you should do it.

Your money, your choice.

alterego_2

I don't see much mention on here that the FiT is paid for by all the other electricity users who don't get it, through their normal electricity bills, and is one of the reasons they're going up so much. It's borderline immoral, IMHO, and I'm not surprised the government is backing away from it (although I realise that's a non-sequitur!).

Aside from the debatable environmental benefits (they're energy-intensive things to make and use rare earth minerals) I'm not at all convinced they will last 25 years...

rogerblack

alterego wrote: »

I don't see much mention on here that the FiT is paid for by all the other electricity users who don't get it, through their normal electricity bills,

This wouldn't be so bad if the FIT was an efficient way of causing electricity generation.
It's not.
Incentivising people to put solar on rooftops, when it's far cheaper per kWh generated to put them in poorly performing agricultural field in 100s of kW blocks is insane.

The 'solar industry' being created and lobbying hard for its existence is a fake industry.
It's predicated around the most inefficient way to deliver the goal possible.

It's like encouraging the growing of potatoes at home, by subsidising gardeners to grow them at the rate of 10 pounds a kilo, rather than leaving it to where it's most economically grown - on the farm.

The only actual important bit of the 'solar industry' is the manufacturing of solar cells, and panels, at increasingly low cost. The rest of the current UK schemes to put panels on roofs is a job-creating, money-wasting scheme.

keith_r59

alterego wrote: »

I don't see much mention on here that the FiT is paid for by all the other electricity users who don't get it, through their normal electricity bills, and is one of the reasons they're going up so much. It's borderline immoral, IMHO, and I'm not surprised the government is backing away from it (although I realise that's a non-sequitur!).

Aside from the debatable environmental benefits (they're energy-intensive things to make and use rare earth minerals) I'm not at all convinced they will last 25 years...

This has been mentioned many times on here and no doubt will be mentioned many times again in the future.

Are the government backing away from it? Not really. All they have done is reduced the subsidies for the large-scale solar power installations to preserve funds for the smaller household ones.

Does this make sense from an environmental perspective? Probably not but if the current policy is to pay generous feed-in tariffs for generating solar energy I would sooner these payments came to me as opposed to a few rich landowners as that would be immoral.

Will the FITs last 25 years? I suspect that they will but I'm sure that others will hope that they won't. But then you can't please everyone.

partist

BornAtTheRightTime wrote: »

How does your maths change when you include the 15 years following when the solar PV owner will continue to receive 10% annual return from FiT and make savings against an electric bill that is forecast to rise 5% year on year? Any financial comparison should take this into account too.

That's anyone's guess really. My guess would be that, given the rise in electricity prices you predict and its consequences for power company profits, that SSE's dividend will rise by at least 5% per annum (have a look at its past history) such that at some point the dividend would be more per annum than the return on the panels. But really there are so many variables and unknowns that nobody can say for certain.

But in 25 years time a £10K holding in power company shares should be worth £20k at least - but again who knows. How much would £10K's worth of panels be worth in 25 years?

So you pays your money and you takes your choice. Personally I'd rather have the hassle-free investment, and not be subject to the whim of the Government when it comes to adjusting electricity tariffs.

mo786uk

I thought I had asked htis already but seems I didnt post it.

Given there are so many variable sin working out how much energy you will produce - how can you tell if the salesman is being accurate with his figures?

Get multipe quotes?
Ask to see his formula and figures and work it out yourself?

I udnerstand the SAP calculation is a basic one but apparantly there are flaws with it and not everyone uses it........?

zeupater

alterego wrote: »

I don't see much mention on here that the FiT is paid for by all the other electricity users who don't get it, through their normal electricity bills, and is one of the reasons they're going up so much. It's borderline immoral, IMHO, and I'm not surprised the government is backing away from it (although I realise that's a non-sequitur!).

Aside from the debatable environmental benefits (they're energy-intensive things to make and use rare earth minerals) I'm not at all convinced they will last 25 years...

Hi

I really don't see how anyone could open a post with those words if they had actually read any of the threads about pv as there's always debate on that very issue .... you'll probably find that hardly a week passes without it being raised ..... That, repayment periods, generating potential, energy savings and 'rent-a-roof' seem to be the most emotive issues on the pv subject across the threads.

HTH
Z

zeupater

partist wrote: »

That's anyone's guess really. My guess would be that, given the rise in electricity prices you predict and its consequences for power company profits, that SSE's dividend will rise by at least 5% per annum (have a look at its past history) such that at some point the dividend would be more per annum than the return on the panels. But really there are so many variables and unknowns that nobody can say for certain.

But in 25 years time a £10K holding in power company shares should be worth £20k at least - but again who knows. How much would £10K's worth of panels be worth in 25 years?

So you pays your money and you takes your choice. Personally I'd rather have the hassle-free investment, and not be subject to the whim of the Government when it comes to adjusting electricity tariffs.

Hi

Have you looked at the way the FiT scheme works yet ... did you know that it's index linked ?? ... suggest you do the same simple calculation as you did over 10 years over 25 years .... it's pretty simple, just use the same assumptions.

You might as well have said that you would be in a better position with shares over one year than ten as it's is closer to ten than twenty-five is .....

Regarding hassle free investment, is there such a thing ?. I suppose the investers in TEPCO thought that investing in generation was a good thing, and closer to home those who invested in bank shares a few years ago have either lost all of the capital, or have seen the capital fall to a level which will take at least a decade to recover and have not seen a dividend for a few years.

As others have mentioned, it's your choice where you invest, but the rational for selecting one investment product over another should be totally understood before making any decisions ... then again, some have pv to help the environment too ...

HTH
Z