Pay off a chunk of mortgage or invest in Solar PV?

acs901

> difficult to predict whether you will recover the investment by increasing the sale value of the house

Given two identical houses one with pv and one without I cant see anyone paying any more for the one with. In fact I might want to pay less because I wouldn't want an ugly sign on my roof advertising that I'm on benefits (which is what it amounts to).

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John

Tammer

Hi,

You mention that you will retire in 10 years.

Will your mortgage be paid off by then without using this extra money?

Do you have a pension plan? If so, maybe think about topping it up with some of the extra money. Remember that you get tax relief on the money paid in.

Tammer

Hungerdunger

acs901 wrote: »

Given two identical houses one with pv and one without I cant see anyone paying any more for the one with. In fact I might want to pay less because I wouldn't want an ugly sign on my roof advertising that I'm on benefits (which is what it amounts to).

I think you have failed to grasp the benefits of Feed-in tariffs. If a potential buyer could see that he would receive 43p per kilowatt index-linked until the end of the contract (up to 25 years), as well as a small payment for each kW he exported, AND a reduction in his own bills, then I think he would quite reasonably choose the house with the panels.

Why do you think it's advertising that the owner is on benefits? It's telling me that the owner is financially savvy and realises that the current FiT figures represent a very good return on his investment.

vax2002

How fixed is the payment scheme ?
As fixed as the pension we all paid in to ?
That most wont live to see now..
How I see it, I would not trust this lot with any cast iron guarantee, promises rust...
Pay the debt off...

acs901

Why do you think it's advertising that the owner is on benefits?

Because the owner is getting a benefit thats only possible because he is being subsidised by other taxpayers.

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John

CB27

I'd personally look to what guarantees a return from all the choices given.

Paying off part of a mortgage guarantees reducing the interest paid out. The current interest rate is very low and, based on the interest you're paying on youre mortgage, you might even find some short term savings accounts that can give a better return for a little while until rates go up, so that you make the payment then. Either way, you're guaranteed to reduce your overall payments over the next few years.

Solar panels, investing in anything to reduce your bills, these are not guaranteed. Tax rules can change, efficiency of these systems may not end up as advertised, there may be further costs down the line.

Because current interest rates are very low I wouldn't recommend locking into a 5 year bond, it's a guaranteed return, but you could be locking yourself in to a very low rate.

thenudeone

Hungerdunger wrote: »

I think you have failed to grasp the benefits of Feed-in tariffs.

Absolutely.

A house with a typical 4kW panels comes with around £1300-£1500 index-linked tax-free income which is broadly equivalent to being completely free of council tax; or a 1% discount of the typical mortgage. I think that's enough to convince the most hardened anti-green housebuyer about the benefits of solar panels:D

acs901

> I think that's enough to convince the most hardened anti-green housebuyer about the benefits of solar panels

Yes, it's a bribe. You're making my point for me really - the scheme is far too generous. It's throwing public money at (relatively) wealthy people who own big South-facing rooves to generate energy in an inefficient way. It just encourages people to think "I can get something for nothing from the state". Of course it's not free, it's just sponging off the rest of us, and a whole business sector is growing up to take advantage of it.

I wouldn't categorise myself as anti green. I'd support the government taking energy saving measures. At a minimum they could restrict the FiT to houses that are insulated to high standards (maybe they already require that?). Or they could require that all rented houses are insulated to a minimum standard. But insulating lofts is low cost, so you won't find businesses lobbying for it. And it isn't very sexy and therefore no votes in it, so you won't see MPs jumping on that bandwagon.

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John

thenudeone

acs901 wrote: »

>It's throwing public money ...... to generate energy in an inefficient way.

This is pretty off topic but I'm not sure whey you think solar energy is inefficient. Have you not realised that oil, coal, and gas are becoming scarcer and that the prices are rising fast? Would you rather depend on those sources for energy?

According to Ethical consumer magazine, a solar panel will generate 3-7 times as much energy in its lifetime as it consumes to produce, so after about 4-7 years of use it will have generated as much energy as was used to manufacture it. That sounds efficient to me.

On the other hand Fossil fuels which have taken millions of years to form, will have been more or less used up in less than a couple of centuries, so we're using them up at least 10,000 times faster than they are created. Do you think that's a more efficient use of the earth's resources?

However, this debate is probably better in the Green and Ethical forum:D

IronWolf

If it was me I would invest it for 10 years, or if your more risk averse, pay off the mortgage.

The solar panels aren't really a yield imo as you lose the capital investment, especially if you're not going to sell the house. You'll have to wait 10 years just to get that money back if it earns 10%, by that time even in a basic savings account you could have earned maybe 40-50% return.

Given your age do you really want to wait 15-20 years before your technically quids in from this investment?