Purchase solar pv or pay off mortgage?

Bitterlemon

Not sure if I should purchase panels either by end of April or June? Quoted 7795 for Sun power for 4khw or main roof or 6795 with ? galliant? With two on garage as they say that cheaper ones won't all fit on main roof. Have young baby and only had time to get one quote from eco energy warehouse. I understand that fit maybe reduced after end of April so perhaps a bit late now to benefit. I could just not bother and pay off mortgage next year with this money which is about 4.5%. I have been told will get about 500ish for fit, 70 for grid, 300 for electric. My gas and electric was a shocking 600 from Dec to Feb recently after switching to fixed tariff and I think about 50 per month of that is electric. I also had to pay £400 to old co when I fixed as was in arrears after only ten months. I am in receipt of tax credits as partner is on low income. Will fit be counted as income as you're only allowed £300 income which you don't have to declare?

Anyway, sorry for the waffling. I know some people think it's unethical but I feel like a slave to these energy companies and want something back. Is it worth doing? Opinion s welcome. Thanks.

Martyn1981

Hello Bitterlemon, lots of decisions for you to make, your head must be spinning.

Firstly rate drops, have a read of this post (click on the little silver arrow in the blue square):

Martyn1981 wrote: »

Degression - FIT rate won't drop on 1/5/13 (next review date), but will drop on 1/7/13 by at least 3.5%. The 1/8/13 review has been brought forward a month to bring several review dates into line.

I'm pretty confident on this, but I'm not privy to govt/EU policies, and don't have a crystal ball, so please allow me some slack.

Prices, first thought was that £8k is high, but if Sunpowers, then I assume those are hybrid panels, which are smaller, allowing more to be squeezed in, perhaps 16 250W panels, where there is only room for 12, or 14 'regular' 250W panels.

The hybrids are expensive, you are paying a hefty premium to get a bigger system (in kWp terms). You might be happy to do this, it might be worth it in the long-term, but I think you also need to get quotes for a regular system, just on that main roof, perhaps 3kWp to 3.5kWp in size, and hopefully around £5k(?).

The 'two on the garage bit' could be using a clever system, or be disastrous depending on different orientation, pitch, shading and so on, so you'd need to get more info, particularly the inverter make and model.

Income figures - the FIT and export look to be based on a generation figure of about 3,200kWh's pa. Would need to know approx location, and roof orientation, but don't sound un-reasonable unless you are very northerly.

[Edit: just spotted you are in Swindon, totally rough estimate for 4kWp would be 3,800kWh's pa due south, and 3,000kWh's pa due East or West.]

Leccy savings - I don't like that figure, that suggests using about 2/3 of generation. Very, very difficult. £150 is not too difficult, but I'd suggest working on £100 just in case. Better to be pleasantly surprised than disappointed.

PV income and savings aren't taxable, but I've no idea if the FIT element is classed as income, or just a return of (and on) your investment.

Mortgage - too important, so I'm going to sit that one out. However, as you build up more info, prices, returns, savings etc, then lots of people on here (me included) should be able to compare returns over say 10 years. From there you'll be able to make a more informed decision.

Mart.

EricMears

There are some downsides to paying off a mortgage.

The interest payments you're saving are usually some of the lowest ones you could get. Possibly lower then the %ROI you could expect from solar panels ?

If you have an existing mortgage and suddenly need an extra loan it's usually fairly easy (& cheap) to extend mortgage. If you've paid it off it's not quite so easy. A new loan elsewhere will cost more than mortgage rates.

Not so much of a problem these days when 'deeds' are electronic but when you have a mortgage, lenders are effectively storing your deed for nothing. They'd want an annual fee to look after them without a mortgage.

Wh05apk

I am in a similar position, looking at solar or pay off a chunk of the mortgage, for me the decision is a bit simpler, my mortgage is at 0.19% above base so 0.69% in total, given that the return on solar should be 10-12% + it is a bit of a no-brainer.

Something else to consider is if you intend staying in the house for long enough to see the return?

spgsc531

EricMears wrote: »

There are some downsides to paying off a mortgage.

The interest payments you're saving are usually some of the lowest ones you could get. Possibly lower then the %ROI you could expect from solar panels ?

If you have an existing mortgage and suddenly need an extra loan it's usually fairly easy (& cheap) to extend mortgage. If you've paid it off it's not quite so easy. A new loan elsewhere will cost more than mortgage rates.

Not so much of a problem these days when 'deeds' are electronic but when you have a mortgage, lenders are effectively storing your deed for nothing. They'd want an annual fee to look after them without a mortgage.

Not sure that's the case anymore. Since the Land Registry went 'electronic'. If any are, they are just ripping you off.

As long as you have a title number, the deeds can be obtained very easily and cheaply if ever required online.

I suppose you may want to keep physical deeds for historical curiosity.

Bitterlemon

Thanks for comments. Yes the expensive ones are hybrids but wanted them just on main roof. Will contact energy saving trust for more advice/quotes I think. My house is south/south west facing but can only fix 14 panels on main roof. Would be nice to get for 5k.

Thanks for comments on mortgage. Wouldn't be all of mortgage paid off unfortunately. The return on the solar panels does sound good as long as I don't move.

Martyn1981

Bitterlemon wrote: »

Thanks for comments. Yes the expensive ones are hybrids but wanted them just on main roof. Will contact energy saving trust for more advice/quotes I think. My house is south/south west facing but can only fix 14 panels on main roof. Would be nice to get for 5k.

Hiya, still guesstimates, but can now put a little more meat on the bones using PVGIS estimate:-

SSW (azimuth +22) 4kWp, 35deg roof, Swindon(ish), no shading(?) = 3,760kWh's pa.

FIT + export 17.76p (15.44p + 4.64p/2) = £668

plus Leccy savings, say £100 (£70 to £150), so £750-£800 pa total

If the roof is good for 14 regular panels (3.5kWp) then spending more might not be worth it. Also, if there are any left in the UK, YingLi make a 270W regular panel, so that would be a very respectable 3.78kWp.

[To compare system sizes, just divide 3,760kWh's by 4kWp, then multiply by system rating eg 3.5kWp, or 3.78kWp etc]

The more you look into this, the more options you'll find, and the more complicated that might make your choice. Just keep a sense of humour, and it'll all make sense.

Mart.

Bitterlemon

Ok thanks. Called Energy saving trust but all they do is give the name of microgeneration website to search for installers. They don't know whether it would reduce tax credits.

OffGridLiving

spgsc531 wrote: »

Not sure that's the case anymore. Since the Land Registry went 'electronic'. If any are, they are just ripping you off.

As long as you have a title number, the deeds can be obtained very easily and cheaply if ever required online.

I suppose you may want to keep physical deeds for historical curiosity.

This is what I understand too, paper deeds are worthless as it's all stored electronically at the Land Registry.If I had the chance of paying off the mortgage, especially with the economy in such a state, I think I'd take it. I understand the point about cheap borrowing, but it's cheap for a reason - it's debt secured on your home. The lender doesn't have to build too much risk into the cost of the loan and so it's cheaper. If things so wrong, the lender can force a sale on the house to get its money. This can happen with unsecured loans, but only after a legal battle, where the judge is more likely to allow a nominal £1 per month repayment of the debt than to turn people out of their homes.