Solar ... In the news

zeupater

nigelpm wrote: »

... No, you ignore after 25 years - the cash flows are only considering the first 25 years. After that you could just ignore the system - you DON'T need to re-invest.

Hi

You can't do that ... if you don't 're-invest' in a replacement system then there's an end-of-life decommissioning cost ... taking scaffold, labour, re-roofing materials, re-wiring, safe disposal/WEEE etc into account and you're probably looking at a decent chunk of a replacement system anyway .... If you're looking at whole life costs then they must reflect the whole cost of the project, not what simply suits ... Not considering this is analogous to the historical costing of nuclear power capacity where decommissioning etc was simply ignored up front ...

I simply don't like the way the comparison has been made .... I understand why it has been and how the figures stack-up, but importantly it's just as flawed as it was when various FDs raised changing my departmental capital budget purchases to equipment leases in order to 'improve' business cash-flow, but I don't intend to go into the details as it simply will send everyone, except accountants, to sleep ....

HTH
Z

zeupater

lstar337 wrote: »

I'm reading.

What happens if you feed your FIT earnings into an ISA as well?

Hi

Didn't everyone do that in a spreadsheet when self-justifying the expenditure ? ... ... I certainly did, FiT and anticipated energy savings using both inflation and energy inflation assumptions too .... even opened a dedicated account to accumulate savings/returns in order to use the money for further home improvements ....

.... ended up with the electricity DD reducing and a regular FiT payment hitting the current account (where it just gets spent) along with an account with the first couple of FiT payments sitting in it with interest rates at rock bottom earning very little and not much more ...

HTH
Z

nigelpm

zeupater wrote: »

Hi

You can't do that ... if you don't 're-invest' in a replacement system then there's an end-of-life decommissioning cost ... taking scaffold, labour, re-roofing materials, re-wiring, safe disposal/WEEE etc into account and you're probably looking at a decent chunk of a replacement system anyway

I don't get this point. At the end of the 25 years - my solar PV will either keep generating electricity or it won't and I can just leave the panels and inverter kit all where it is without any cost to me.

Of course if the kit wasn't on my property that wouldn't be possible and I'd be looking at a charge to remove it but we are talking about retail PV systems here. Decommissioning simply doesn't come into the equation. And even if you think it does just stick a nominal minus £500 into the cash flow at the year 25 and it won't hurt the return hugely.

zeupater wrote: »

I simply don't like the way the comparison has been made .... I understand why it has been and how the figures stack-up, but importantly it's just as flawed as it was when various FDs raised changing my departmental capital budget purchases to equipment leases in order to 'improve' business cash-flow, but I don't intend to go into the details as it simply will send everyone, except accountants, to sleep ....

HTH
Z

Ha ha, it won't surprise you to learn I'm an accountant!

You might not like it but it works and it's logical and it stacks up.

More than happy to hear your reservations if you can be bothered.

Sterlingtimes

Rather than an ISA, it should be an annuity whereby your capital is lost for ever.

But it is a policy driven issue. The Government must target a level of uptake to meet the policy target and then offer appropriate compensation. It is a matter of demand.

Those fighting a class war will be aggrieved that wealthier people are benefiting to the detriment of the the less wealthy. That may well be the case.

The socialist policy may give free panels to the less wealthy and let the burden fall to the wealthier in society. The uptake would then be lower and targets would fail.

nigelpm

Sterlingtimes wrote: »

Those fighting a class war will be aggrieved that wealthier people are benefiting to the detriment of the the less wealthy. That may well be the case.

The socialist policy may give free panels to the less wealthy and let the burden fall to the wealthier in society. The uptake would then be lower and targets would fail.

Coming back this point.

I'm a capitalist through and through but the scheme is too generous.

I take the points made by mart and others that rates of return are much lower if you take a less than ideal orientation and live in Scotland but if you live in the SW (as I do) and have a almost South facing roof (as I do) and have a roof space that can take 16 250w panels (as I do) the returns are around 15% - this is far beyond sense.

I very much like the idea of limiting the tariff on a Kw/h/Kw of generation basis.

The point being I would have still invested if I'd only had a 7% return on offer.

nigelpm

Sterlingtimes wrote: »

Rather than an ISA, it should be an annuity whereby your capital is lost for ever.
.

Fair enough or a 25 year fixed term savings account - what is a reasonable rate on these?

zeupater

nigelpm wrote: »

I don't get this point. At the end of the 25 years - my solar PV will either keep generating electricity or it won't and I can just leave the panels and inverter kit all where it is without any cost to me .....

Hi

I would hope that you'd be in a minority then, else there'll be huge issues which will lead to even more poorly framed legislation ... failed grid tied equipment on walls with sheets of glass on the roof maintaining something around 300 to 500VDC under no load with the potential for the root cause for the failure to be of a type which could lead to all sorts off accidents/incidents ...

When my system fails it's either be fixed, replaced or removed safely .... I'd also expect that not having potentially dangerous failed & unmaintained kit in place will be a condition for buildings insurance by the time that the FiT contract expires ...

As for allowing £500 for the removal, well that'll just about cover the scaffold for most people, what about the other costs and margins for the contractors ... even if you can DIY as much as possible there's still legal requirements to meet (electrical, disposal etc) ... it's probably more realistic to allow 2-3x as much to decommission/remove the system professionally.

HTH
Z

nigelpm

zeupater wrote: »

Hi

I would hope that you'd be in a minority then, else there'll be huge issues which will lead to even more poorly framed legislation ... failed grid tied equipment on walls with sheets of glass on the roof maintaining something around 300 to 500VDC under no load with the potential for the root cause for the failure to be of a type which could lead to all sorts off accidents/incidents ...

When my system fails it's either be fixed, replaced or removed safely .... I'd also expect that not having potentially dangerous failed & unmaintained kit in place will be a condition for buildings insurance by the time that the FiT contract expires ...

As for allowing £500 for the removal, well that'll just about cover the scaffold for most people, what about the other costs and margins for the contractors ... even if you can DIY as much as possible there's still legal requirements to meet (electrical, disposal etc) ... it's probably more realistic to allow 2-3x as much to decommission/remove the system professionally.

HTH
Z

Sorry, I should have clarified that I'd would be most likely (90%) to replace the inverter and panels as by then all the kit and batteries are likely to be extremely cheap.

I also expect the price of electricity will also be a lot cheaper as well though - given the points being made further up the thread.

zeupater

nigelpm wrote: »

... The point being I would have still invested if I'd only had a 7% return on offer.

Hi

That's a fine position today where the average UK saving account is earning 1.48%(2014), however, the 5 years prior to the current financial state (2003-2008) averaged 4.96%, with the 50 years to 2014 averaging 6.01% (source ONS/BSA) ...

... although a 7% return looks good when compared to current savings offerings we've recently had 5 year accounts paying 6.5% mature, so when looking at historical average data or what's been available through best-on-offer long term accounts comparatively recently the return may not be quite so good .... if you could have had a rock solid return of 5% or 6%, or more, when making the decision to 'invest' in solar with potential unknown future costs/incomes (and we know how accountants dislike unknown variables ... ) would the decision have been so straightforward ? ... and more importantly, would the return have sparked the interest in pv which it so obviously has ?

HTH
Z

Martyn1981

zeupater wrote: »

Hi

When my system fails it's either be fixed, replaced or removed safely .... I'd also expect that not having potentially dangerous failed & unmaintained kit in place will be a condition for buildings insurance by the time that the FiT contract expires ...

HTH
Z

I'm being lazy and not checking this, but somewhere in my memory I seem to recall that whilst PV is generally PD for most of us, it is under certain conditions, and one of those is that it is removed at end of life.

In reality, I expect most households, but perhaps not us (must get back to the gym) would replace the old PV with new super duper PV that is a bit more efficient and even cheaper (in real terms) then.

Mart.