Solar Panels - Are they worth it?

bloss0m

Paul Hudson BBC weather presenter recently posted on his blog regarding solar panels

http://www.bbc.co.uk/blogs/paulhudson/2011/07/my-experience-with-solar-panel.shtml

zeupater

Cardew wrote: »

I think your figures are a little optimstic.

If you borrow £8k to £9k, you are looking at initially paying something like £500pa in interest.(@6%) So that doesn't mean that you will 'obviously' pay off the loan in 10 years. - especially if you have any repairs needed.

How on earth can people 'guess' that solar PV will add 9% to house values? Houses vary in price from about £50k to many £millions. I believe the average is around £170k - so people are 'guessing' that a £8k to £9k system will add £15k+ to the house vaue????

There is a perfectly valid argument that solar panel will deter some house sales.



What does the above mean please?

Hi

I agree that the post is a little optimistic, seeming to base the logic on FiT earnings alone ..... not knowing the location orientation etc, if we were to base the output on say 825kWh.y/kWp then the annual generation range for the 2.1-2.5kWp system would be 1700 to 2000kWh, so allowing for a £100/year energy saving and 44.85p/kWh(43.3+1.55p) for FiT and deemed export, the saving range would be £860 to £1000, a similar range, but allowing for all variables (FiT, 50%Export, E.savings).

Considering the point on house values, I think that the OP has described a range of effect. At one end of the scale a 9% increase on house values, at the other 20x the value of the annual energy savings (£10 per 50p bill saving). Applying this range to the current average UK house price of £232,628 (Land registry Q1/11) then the OPs logic would suggest a range of ~£2k (£100x20) to ~£21k (232936x0.09) .....

Personally, I think that too many people play the house added value card. They've watched too many television property programmes and believe that every pound spent on a property can return a profit, without considering that any profit is only possible because most buyers are willing to pay a premium in order to avoid disruption. However, compared to a bathroom/kitchen makeover or a loft conversion, the installation of solar pv is straightforward, therefore there is almost no disruption, therefore there is no likely considerable premium ...... if the property value increase is proved to be any higher than the currently applicable install cost plus a couple of hundred pounds then I would be surprised .....

HTH
Z

Cardew

bloss0m wrote: »

Paul Hudson BBC weather presenter recently posted on his blog regarding solar panels

http://www.bbc.co.uk/blogs/paulhudson/2011/07/my-experience-with-solar-panel.shtml

He needs to stick to weather forcasting, because he won't make it as an economist!!

I am dismayed that the BBC allow people to have such a platform where they can influence people.

He calculates payback in 8 years by:

1. Ignoring any interest he would have got by investing the £11k.

2. Taking a figure of £150 pa saved off his electricity bill.(the EST estimate £70 as average.)

noncom_2

@beedydad above, no Solar PV is not solely an investment option which has no place in this Forum. Clearly anything on which we could spend money in order to save/make money could be regarded as an investment option - be it Premium Bonds, lottery tickets, Solar PV, a new condensing boiler etc.

The fact that for some of these choices there is, for some people, an added ethical dimension, is the reason a sub-Forum like this one exists. For me, I had a pot of money coming in from the sale of our previous house, and had a choice to make: pay it off the mortgage of the new house, or invest it in some other way. Being of a cautious, long-term investing nature, Solar PV seemed like a good possibility. It is more risky than reducing the mortgage, but has the capacity to either under-perform or out-perform that option.

Our best estimates suggest that, over the long term, the most likely outcome is that we will have done a bit better financially than by reducing the mortgage. If that were the sole consideration, I would probably not have taken it.

But let's say the Solar PV option doesn't work out as well over the next couple of decades as we expected, for whatever reason, and it turns out that we have ended up in exactly the same position financially as we would have done had we taken the mortgage choice. If that happens, I am still very happy to have made the choice I did, because I will have effectively consumed no electricity off the Grid for 20+ years. We are on target this year to produce around the same amount we consume as a household (3500 units), and are constantly working to reduce our energy usage when gadgets, lights, appliances etc need replacing.

If after 20/25 years, I am no worse off than I would have been, and have reduced my "dirty" (ie Grid mix) electricity to zero, or even been a net Generator, then I have achieved something to be proud of.

So, this is not just a get-rich-slow scheme for the middle classes, as some would like you to believe.

Re: the house price increase/decrease argument. I can see why some people currently might be put off by Solar Panels, although I think this will reduce with time as more people get used to seeing them. I think it is more likely that people will find the idea of a £1500+ annual income a benefit. (An extra £1500 per year would pay for another £30k mortgage approx at today's rates). In my own calculations, I was way more cautious than this - in my "best case" scenario, I assumed a figure that on day One the "value" of the system was two-thirds of its installation cost, ie about £10k, and depreciated linearly to 25 years. This led to a genuine "payback" time of about 8 years. Our "worst case" scenario was that it added nothing to the house price and was effectively written off as an asset on day one.

raider

Cardew wrote: »

It isn't that easy to see what you have shaved off your electricity bill.

Funnily enough, I've just been going through my bill for the last quarter and using a spreadsheet comparing it to using two previous bills of Q2.

2009 Q2 = Ave 12.81 kWh per day
2010 Q2 = Ave 11.53 kWh per day
Combined Q2 Ave = 12.17 kWh per day

With solar installed 2011 Q2 = 6.47 kWh per day.

12.17 kWh - 6.47 kWh = 5.7 kWh saved per day X 91 days = 518.7 kWh saved.

518.7 kWh X 13.15p (unit rate) = £68.21

Not to difficult

lanstrom

Cardew wrote: »

He needs to stick to weather forcasting, because he won't make it as an economist!!

He's certainly no MoneySavingExpert thats for sure. I had a quote for £11,500 for a 3.91 kWh system and he paid £11,000 for a 2.96 kWh.

Unless I missed something ?

noncom_2

Yup, you missed that prices have fallen significantly in the last year.

When I was getting quotes last July, £15k for a 4kWp system was typical, now it seems to have fallen by a couple of grand from that.

£11.5k all in (if you're including VAT and scaffolding costs etc) seems a good deal if you trust the company quoting it. But imo for that amount of money and given what they will be doing to your property, finding an installer who you really trust to do a good job is worth a premium.

Dagsyrugg

Hi

I've just had a 3.95kwh system fully installed for a tad over £11,000

The system comprises:

16 Samsung 247w panels
SMA 4000TL inverter
Schuco mounting
SMA sunny beam
Elster generation meter
Cabling/isolators/scaffolding etc

A few months ago I had no knowledge of solar pv but thanks to the contributors on this site I have quickly updated my knowledge base!

Regards

dagsyrugg

beedydad

noncom wrote: »

@beedydad above, no Solar PV is not solely an investment option which has no place in this Forum. Clearly anything on which we could spend money in order to save/make money could be regarded as an investment option - be it Premium Bonds, lottery tickets, Solar PV, a new condensing boiler etc.

The fact that for some of these choices there is, for some people, an added ethical dimension, is the reason a sub-Forum like this one exists. For me, I had a pot of money coming in from the sale of our previous house, and had a choice to make: pay it off the mortgage of the new house, or invest it in some other way. Being of a cautious, long-term investing nature, Solar PV seemed like a good possibility. It is more risky than reducing the mortgage, but has the capacity to either under-perform or out-perform that option.

Our best estimates suggest that, over the long term, the most likely outcome is that we will have done a bit better financially than by reducing the mortgage. If that were the sole consideration, I would probably not have taken it.

But let's say the Solar PV option doesn't work out as well over the next couple of decades as we expected, for whatever reason, and it turns out that we have ended up in exactly the same position financially as we would have done had we taken the mortgage choice. If that happens, I am still very happy to have made the choice I did, because I will have effectively consumed no electricity off the Grid for 20+ years. We are on target this year to produce around the same amount we consume as a household (3500 units), and are constantly working to reduce our energy usage when gadgets, lights, appliances etc need replacing.

If after 20/25 years, I am no worse off than I would have been, and have reduced my "dirty" (ie Grid mix) electricity to zero, or even been a net Generator, then I have achieved something to be proud of.

So, this is not just a get-rich-slow scheme for the middle classes, as some would like you to believe.

---

Worthy comments - but would be very interested for you to actually state what you are USING as apposed to generating. If you are using as much as you generate you are probably a very unqiue person and you should be praising from the rafters how much you use.

I know some off grid and partial off grid and they get no where near the figures you purport to use.

zeupater

raider wrote: »

Funnily enough, I've just been going through my bill for the last quarter and using a spreadsheet comparing it to using two previous bills of Q2.

2009 Q2 = Ave 12.81 kWh per day
2010 Q2 = Ave 11.53 kWh per day
Combined Q2 Ave = 12.17 kWh per day

With solar installed 2011 Q2 = 6.47 kWh per day.

12.17 kWh - 6.47 kWh = 5.7 kWh saved per day X 91 days = 518.7 kWh saved.

518.7 kWh X 13.15p (unit rate) = £68.21

Not to difficult

Hi Raider

I think that the point being made was that you wouldn't know what proportion of the energy saving would be directly related to the pv generation as opposed to savings due to other energy reduction activities which awareness of generation and usage bring about.

If you were using an average of over 12kWh per day in Q2 for the last couple of years then there was definately scope for improvement anyway, mine was reduced gradually from ~14kWh/day in Q1/Q2 2006 to ~7kWh/day before installing pv. This is where many see savings after installing pv which could have been made even without having pv.

I can quite confidently claim that the majority of the reduction in our purchased energy is as a direct result of having pv, however, having purchased further energy saving equipment such as a LED TV, even I can't claim to know what the saving directly related to out pv installation is, but I can say that we now average around 3kWh/day, with somewhere around 3kWh of the ~4kWh/day energy reduction being due to pv.

Another point relates to the 13.15p/kWh cost of electricity, is this your tier 2 tariff or an average cost ? .... At an average of 6.47kWh/day you will only ever be saving energy at the tier 2 rate ... my tier 2 rate for the next 12 months will be just over 10p/kWh(inc VAT) before incentives .....

HTH
Z