Cold called re free solar panels.

Martyn1981

KeenToMakeSavings wrote: »

I obtained the 'expiry' dates for the present FIT rates from The Energy Saving Trusts website but the info is also available on one of the .gov websites - I forget which one just now - both state the present tariffs are valid only until 30 April and will be reviewed and adjusted then and at 3-month intervals after that, The Energy Saving Trust's website states the rates after that date "will be revised according to deployment rates" whatever that non-committal and uninformative statement means.

Re export meters, the man from PV Solar UK stated they fit a bi-directional meter next to my present import meter but I have to say I'm sceptical as I know many don't bother as this reduces the system purchase cost.

I am very keen to install a system but being a pensioner on a fixed (actually a reducing income) with insufficient free capital, I can only afford to do so if I can get a deal where I break even immediately on installation. So far I haven't found one but the just announced (today) second phase of the Government's Green Deal might just be of use - I intend to have a Green Deal survey done to find out.

Keep saving,

Ian

Hiya Ian, you are absolutely correct about the current tariffs only being valid until 30/4/13. But if I can add 'so far'.

Using the degression rates which can be found in this download:

http://www.energysavingtrust.org.uk/Publications2/Generating-energy/FAQ-on-UK-Government-Feed-in-Tariffs

I'm 99% sure that installs (or deployment rates) up to 31/1/13 won't hit the 100MWp necessary to trigger even the lowest degression of 3.5%. So I think (but don't take my word for it yet) that there will also be a zero degression in the rates from 1/5/13 - 31/7/13.

I'm sure installs will then pick up and trigger a degression, but even if they don't, a minimum 3.5% degression will be applied automatically in August as I understand that 2 quarters is the maximum that can go by without any reduction. Boy, this is getting complicated!!!

Anyone, myself included, can install an export meter, but some energy suppliers can charge a fortune, or tell you to get it done yourself. I'm no electrician, but I'd have thought installing an 'ordinary' meter (after the import meter), but wired backwards would do the job - but I'm guessing.

Best of luck with the Green Deal, but I suspect micro-generation is excluded as it is already supported separately (via FITs). I don't know much about the Green Deal, but I think a survey might set you back around £100. So if you don't want a survey anyway, I'd ask about PV first before committing.

Happy hunting.

Mart.

Murtle

Different companies are likely to have different offerings with Green Deal, but solar panels should be included - it's just a case of finding companies that will do it - and if it will match the *Golden Rule*

http://www.which.co.uk/energy/creating-an-energy-saving-home/guides/the-green-deal-explained/what-is-the-green-deal/

Martyn1981

Murtle wrote: »

Different companies are likely to have different offerings with Green Deal, but solar panels should be included - it's just a case of finding companies that will do it - and if it will match the *Golden Rule*

Cheers, interesting read, but my head is hurting now. With micro-gen most of the income is under FITs + export, not energy savings on your bill, so PV for example would appear to break the 'golden rule'.

There again, if FIT+export payments from your FIT provider are rounded off against your leccy bill (as savings), then it'll probably comply with the 'golden rule'.

Does that make any sense? Maybe I should stop guessing and wait for Ian to ask and feedback. Or if anyone else knows quite how this would work, but that 7.5% loan rate is a little scary.

Mart.

rogerblack

Martyn1981 wrote: »

Cheers, interesting read, but my head is hurting now. With micro-gen most of the income is under FITs + export, not energy savings on your bill, so PV for example would appear to break the 'golden rule'..

It would be very, very silly (and lead to rapid rule-changes) if it turns out to be possible to use the low-income grant funding stream for green deal for this.

KeenToMakeSavings

I've been studying the websites dealing with the Green Deal, at wwwdotgovdotuk/green-deal-energy-saving-measures and wwwdotgovdotuk/green-deal-energy-saving-measures (sorry to have to use the word 'dot' each time -as a newby the Forum won't accept my posts with the URLs as normally written. Both sites confirm that solar PV systems are available under the Green Deal but nowhere can I find anything to say whether the saving arising from the solar PV system is calculated taking into account the FIT payments or whether it is merely calculated on the direct savings to the electricity bill. However, Solar PV systems are mentioned as an example of the case where the savings are insufficient to meet the Golden Rule and therefore the home owner would have to contribute the difference in cost himself.

I can find no reference to the interest rate for finance under the Green Deal scheme although the .gov website does say the repayments made by the additions to one's electricity (or gas) bill will include interest. All I've heard is a rate of 8% mentioned by the News media when phase 2 was launched yesterday, and the rate of 7.5% mentioned above by Martyn.

Martyn, where did you obtain this figure?

The normal payback period for finance under the Green Deal scheme is 25 years so at 7.5 or 8% interest there is a chance the system would be self-financing but only if the FIT payments are taken into account.

I can find no mention of any curtailment of the FIT payments as a result of the launch of the Green Deal and from what I've read, it appears that the customer will have a choice of buying a Solar PV system as before and collecting the Fit payments or buying it through the Green Deal, with or without FIT payments.

Reading the above two websites, it seems the only way to clarify these factors is to contact the Energy Saving Advice Service on 1300 123 1234 (or in Scotland, Energy Saving Scotland on 0800 512 012) or request a Green Deal Assessment. The .gov website confirms this is free of charge on a no-commitment basis and advises that the customer should cehck that the Assessor does not charge, and if he/she says there is a charge, it advises to go to a different Assessor - you can contact as many Assessors as you wish and obtain free Assessment Reports from all of them for comparison - the report is after all, only their assessment of your property, and in any case, the cost of the systems you are then interested in is only discussed once you contact a Green Deal provider who would carry out the work, and show them your report. Again, you can decide not to use them and try another Provider, all at no cost.

I agree that 7.5 or 8% interest is not good especially as commercial loans are available at rates as low as 5.1% APR depending on the amount and the term.

And it seems to me that the customer will only be in a position to check compliance with the Golden Rule once a quite is obtained from a Provider. If this isn't the case, I don't see at what earlier stage the sums can be checked against the Golden Rule and how the savings are calculated.

Ian

Martyn1981

KeenToMakeSavings wrote: »

I can find no reference to the interest rate for finance under the Green Deal scheme although the .gov website does say the repayments made by the additions to one's electricity (or gas) bill will include interest. All I've heard is a rate of 8% mentioned by the News media when phase 2 was launched yesterday, and the rate of 7.5% mentioned above by Martyn.

Martyn, where did you obtain this figure?

Ian

Hiya Ian. I went to the Which link posted by Murtle (very informative). Then on the LHS clicked on 'Green deal loans and finances'. That page explains the suggested rates, and guesses at a figure:-

"However, the government has said that it expects interest rates to be between 6.5% APR and 9.5% APR, with 7.5% as the central estimate."

Also heard a few bits here and there, with estimates (guesses) of high 6's to low 8's. I'm not clear if there is any concrete rate yet.

Mart.

KeenToMakeSavings

Hi Martyn,

Many thanks for that info - most useful.

Assuming an APR of 6% and an actual rate of 5.9% (both lower than is currently being talked about) over 10 years in combination with an assumed lowest 4 kWp system price of £6,000 results in a no-deposit monthly loan repayment of £79.50. Taking my location in south Cumbria and using the PVGIS website for a south-facing roof with a slope of 30 degrees, the system in theory would earn £551 per year from the 15.44p per kWh Feed In Tariff payments. Assuming half the electricity generated is exported at 4.5p per kWh, the total annual return from the system is therefore £631.53 or, averaged over the year, £52.63 per month compared with the loan repayments of £79.50 so unless the reductions in my electricity bill were more than this difference I would be out of pocket from the first year.

My electricity rate is currently 13.611p per kWh so assuming a reduction in my consumption of half what the system generates (the rest is exported), the reduction in my electricity bill would be £243 per year or an average of £20 per month. This would still leave me out of pocket by an average of £7 per month in the first year. In practice, this amount could vary either way quite considerably depending on the weather pattern for the year and how much of the generated electricity I actually use as distinct from how much is exported, something which is unique to each individual's circumstances.

Of course, as soon as there is a rise in the price of electricity of more than about £7 per month or £84 per year - a rise of about 7.6% in my case - I begin to gain overall provided the above £7 shortfall per month doesn't prove to be significantly larger in practice.

Conclusions:

1. At the 10.1% APR/9.7% actual interest rate being quoted by system suppliers at present for a 10 year loan through the special Barclay scheme, even the lowest cost 4 kWp system is likely to leave the user heavily out of pock for several years in spite of what the system supply companies claim. SO BEWARE and do your own calculations using the PVGIS website in combination with your electricity bills.

2. Using Martyn's Green Deal interest rates as above, and applying the Green Deal Golden Rule where the loan must be fully covered by the savings and assuming the FIT payments can be included as a saving, it seems likely that the end-user will need to contribute something to the cost of the system and at the higher interest rates quoted this contribution could be substantial.

3. If you can afford to buy the system without a loan, it's a no brainer as I've previously said - you will make a far larger return on your investment from day one than from any other source except possibly the best performing stocks whose value can fall as well as continue to grow - something electricity prices are almost guaranteed not to do. Any reductions will be small and relatively short-lived in the context of these calculations.

4. Once again, we seem to have a situation where the poorest are locked out because of the lack of spare capital to top up the loan while others can afford to proceed.

5. If I had the capital, which sadly I don't, I know what I would do with it!

Ian

Cardew

KeenToMakeSavings wrote: »

4. Once again, we seem to have a situation where the poorest are locked out because of the lack of spare capital to top up the loan while others can afford to proceed.

5. If I had the capital, which sadly I don't, I know what I would do with it!

Ian

You can however console yourself that you are paying, through a levy on your electricity bill, towards the FIT of those who could afford a PV system - or the Rent a Roof companies.;)

zeupater

KeenToMakeSavings wrote: »

Hi Martyn,

Many thanks for that info - most useful.

Assuming an APR of 6% and an actual rate of 5.9% (both lower than is currently being talked about) over 10 years in combination with an assumed lowest 4 kWp system price of £6,000 results in a no-deposit monthly loan repayment of £79.50. Taking my location in south Cumbria and using the PVGIS website for a south-facing roof with a slope of 30 degrees, the system in theory would earn £551 per year from the 15.44p per kWh Feed In Tariff payments. Assuming half the electricity generated is exported at 4.5p per kWh, the total annual return from the system is therefore £631.53 or, averaged over the year, £52.63 per month compared with the loan repayments of £79.50 so unless the reductions in my electricity bill were more than this difference I would be out of pocket from the first year.

My electricity rate is currently 13.611p per kWh so assuming a reduction in my consumption of half what the system generates (the rest is exported), the reduction in my electricity bill would be £243 per year or an average of £20 per month. This would still leave me out of pocket by an average of £7 per month in the first year. In practice, this amount could vary either way quite considerably depending on the weather pattern for the year and how much of the generated electricity I actually use as distinct from how much is exported, something which is unique to each individual's circumstances.

Of course, as soon as there is a rise in the price of electricity of more than about £7 per month or £84 per year - a rise of about 7.6% in my case - I begin to gain overall provided the above £7 shortfall per month doesn't prove to be significantly larger in practice.

Conclusions:

1. At the 10.1% APR/9.7% actual interest rate being quoted by system suppliers at present for a 10 year loan through the special Barclay scheme, even the lowest cost 4 kWp system is likely to leave the user heavily out of pock for several years in spite of what the system supply companies claim. SO BEWARE and do your own calculations using the PVGIS website in combination with your electricity bills.

2. Using Martyn's Green Deal interest rates as above, and applying the Green Deal Golden Rule where the loan must be fully covered by the savings and assuming the FIT payments can be included as a saving, it seems likely that the end-user will need to contribute something to the cost of the system and at the higher interest rates quoted this contribution could be substantial.

3. If you can afford to buy the system without a loan, it's a no brainer as I've previously said - you will make a far larger return on your investment from day one than from any other source except possibly the best performing stocks whose value can fall as well as continue to grow - something electricity prices are almost guaranteed not to do. Any reductions will be small and relatively short-lived in the context of these calculations.

4. Once again, we seem to have a situation where the poorest are locked out because of the lack of spare capital to top up the loan while others can afford to proceed.

5. If I had the capital, which sadly I don't, I know what I would do with it!

Ian

Hi

What seems to have been missed is that if the system was to be fully funded from savings, there is no return at all until the capital has been returned - the loss of interest on the sum 'invested' needs to be considered too ....

Of the £6000 loan repayment of ~£79.50/month at 5.9%APR, the initial interest would be ~£29.50 (6000*.059/12), the £50 difference being capital repayment, and of course, the outstanding balance will be reducing and attracting less interest in subsequent months/years ....

If you are looking at solar pv simply from a moneysaving point-of-view then you need to look at the long-game, this being the case however it would be funded .... using the same logic as used in the referenced post, anyone who has purchased their system is currently showing a loss of £thousands so there's no real difference ....

Looking at the figures used, it would be more realistic to base your energy savings as being somewhere closer to £100/year so as not to overstate any benefits ... if you achieve more then see it as a bonus ...

Taking the above into consideration, it would be far more appropriate to simply add the total interest payable over the loan period to the initial cost of the system and see what the returns would be over the total FiT payment period. There will be a point at which the loan repayment of £79.50 minus the FiT income and import energy savings are in balance, so maybe it would be an idea to also establish where this crossover point is and consider whether it's affordable & worthwhile to accept a negative cashflow position until this point is reached and benefit from a positive cashflow from then on ....

HTH
Z

Cardew

zeupater wrote: »

Taking the above into consideration, it would be far more appropriate to simply add the total interest payable over the loan period to the initial cost of the system and see what the returns would be over the total FiT payment period. There will be a point at which the loan repayment of £79.50 minus the FiT income and import energy savings are in balance, so maybe it would be an idea to also establish where this crossover point is and consider whether it's affordable & worthwhile to accept a negative cashflow position until this point is reached and benefit from a positive cashflow from then on ....

HTH
Z

Also to factor in repairs to PV system; and even the possibility of having to remove panels for roof repairs.