Solar panels help?

shazh70

Hi
I have been contacted to look at solar panels that work on daylight, apparently a high street company is lending money which will be paid back out of the energy they produce, once the debt is paid off, then we would receive any money that we earn but don't use.
is this a genuine scheme or a scam please? We have someone booked in to talk to us next week and would like to know before hand.
Thanks in advance.

Cardew

Welcome to the forum.

There are firms who are financing this type of scheme. However it depends on the terms of the deal if it is a scam or not.

You need to read up some of the many threads of the forum to understand the concept of subsidy(called Feed in Tariff -FIT) paid to you for producing electricity from solar panels.

The major factors in any such scheme are the size and cost of the solar system, and the interest rate on the loan.

Whatever you do, you must not sign anything when the salesman visits - especially if he offers inducements to sign straight away.

I suggest you get in writing from the salesman full details of the scheme and post it here so the experts(not I) can advise you further.

I don't know your credit rating, but it is almost certain that you will get a better deal by borrowing money/increasing mortgage(around £6,000 to £7,000) and financing the system yourself. The firm are normally middlemen who want their slice of the action themselves.

DO NOT SIGN ANYTHING NEXT WEEK!

mac2008

Crikey - I agree with Cardew! Very sound advice there.

I agree you should get the details and come back. Remember to include the type and size of system (how many panels), and their estimate of how much electricity (in kWh) it will produce per year,

zeupater

shazh70 wrote: »

Hi
I have been contacted to look at solar panels that work on daylight, apparently a high street company is lending money which will be paid back out of the energy they produce, once the debt is paid off, then we would receive any money that we earn but don't use.
is this a genuine scheme or a scam please? We have someone booked in to talk to us next week and would like to know before hand.
Thanks in advance.

Hi

Agree with above posts ... take care as the scheme could relieve you of any (/all) financial benefits which the pv would provide. A similar question was posed on these boards about a month ago .... http://forums.moneysavingexpert.com/showpost.php?p=63292087&postcount=3 ... have a read through the question and the reply given at the time - the figures may not be the same, but if you follow the logic you'll be well placed to judge whether the salesman is peddling the same wares ....

HTH
Z

shazh70

Thanks for the replies, much appreciated. I certainly have no plans to sign anything on the night, we like to read through things and talk about it before we commit.

Will update you next week ;-)

Thanks again :-)

shazh70

Hi

So we have had the visit and not signed for anything!

We were offered 16 panels to produce 4 kwh, with an inverter, meter and voltage optimiser.

FIT of 14.9p per kwh

4.69p per kwh what goes in to the grid.

They will provide survey and EPC certificate

Finance company is Creation, which i have had dealings with before, apr of 10.2%

Cost of system - £10995 to be repaid over 10 years. Total cost £17363.00

Any input would be much appreciated.

Many thanks in advance.

EricMears

shazh70 wrote: »

Hi

So we have had the visit and not signed for anything!

We were offered 16 panels to produce 4 kwh, with an inverter, meter and voltage optimiser.

FIT of 14.9p per kwh

4.69p per kwh what goes in to the grid.

They will provide survey and EPC certificate

Finance company is Creation, which i have had dealings with before, apr of 10.2%

Cost of system - £10995 to be repaid over 10 years. Total cost £17363.00

Any input would be much appreciated.

Many thanks in advance.

£11 grand seems a lot for a 4kW system these days. Mine only cost £12k three years ago. Going rate today seems to be around half that !

Average annual generation has been around 2400kWh/year. You ought to do better than that (my roof is too shallow) but stick with those figures.

I make FIT payments £357 and export sales of half of that £56 giving total of £413 which I only make an annual rate of return of 3.75%

It would be madness to borrow money at 10.2% to earn 3.75% !!

If you could find a similar system at half the price you'd be getting a ROI more like 7.5% and if you could expend your mortgage you'd expect to pay less than 7.5% interest on the extra advance so it would make more sense.

Martyn1981

shazh70 wrote: »

Finance company is Creation, which i have had dealings with before, apr of 10.2%

Cost of system - £10995 to be repaid over 10 years. Total cost £17363.00

Any input would be much appreciated.

Holy Cow!

Hiya shazh70, run away, drive away, book a taxi if need be, but put some distance between yourself and that deal.

As Eric said, should be nearer half that price, but even then, 10.2% APR would swallow up all/most of the annual income. At £11k the income wouldn't even cover the interest.

If you've been bitten by the PV bug, keep looking, get some quotes and ask on here for advice on costs and system suggestions ...... but if financing it, you'll need a good deal and a low interest rate such as a mortgage top up, or similar.

Also, I'd seriously doubt the voltage optimiser would save you much. For domestic use, it'll do very little, but would help to push the quote up - so sounds like a bit of up-selling.

Mart.

shazh70

Hi Guys

thanks for your feedback, apparently in 20 years we would make £60,000, we will not be in profit for the first 5 years, but would also still have to pay for electric of an evening as these are daylight panels and do not store the electric they produce, so can only use this during the daytime. As we are out most of the day, would this really save us that much?

Martyn1981

Hi shazh, happy to run some numbers for you, but short answer, £60k, no chance! Especially with such a high cost and interest rate. Even if that is before paying the loan back, it's still an average of £3k per year. If it's clear 'profit' then you'd need £4k per year!!!!!

If you're willing to mention your location (just nearest city) and roof orientation, I can take a stab at a rough guestimate of PV income. There is a walkthrough on this thread, post #1 section 5 if you're feeling brave:

https://forums.moneysavingexpert.com/discussion/3872445

But (stab in the dark), if you are fairly southern, with a south facing roof, large, no shading and stick a 4kWp system on it, then you could and should get about 4,000kWh's of generation per year. Currently that would earn/save you:

FiT @ 14.9p * 4,000 = £596
Export 4.64p * 2,000 (50% deemed) = £93
Leccy savings around £80 to £160, but as you say you're not in much during the day, I'd go for the lower end, so £80(ish).
Total £769 pa

If you could get an install for about £6k and pay for it yourself. Then a nice return.

If financed at a low rate, still not too bad.

But at 10.2% it wouldn't make any sense. And if you're further north, with off-south roof and shading, then all the numbers would need to come down.

Mart.

zeupater

shazh70 wrote: »

Hi

So we have had the visit and not signed for anything!

We were offered 16 panels to produce 4 kwh, with an inverter, meter and voltage optimiser.

FIT of 14.9p per kwh

4.69p per kwh what goes in to the grid.

They will provide survey and EPC certificate

Finance company is Creation, which i have had dealings with before, apr of 10.2%

Cost of system - £10995 to be repaid over 10 years. Total cost £17363.00

Any input would be much appreciated.

Many thanks in advance.

Hi

As others have said .... run away.

It's just like the example I raised in the earlier post - the supplier has manipulated the costs to relieve you of as much money as they can, leaving no contingency for possible repairs along the way.

Roughly ... including finance, you're being charged 3x the price of the system.

If the system cost £6000 and you financed the purchase with a loan with an APR of 26.9% the total repayment over 10 years would be £17353, a £10 difference !! ...

I'd suggest that you check with your bank and see what rate they'll lend you £6k against a pv system over a 120month period .... anything less than 26.9% is money in your pocket, not some greedy supplier's 'get rich quick' scheme ...

HTH
Z