Spare Cash Should i Get Solar

Nellybee

Hello
I have been thinking for a while about solar panels now i have some spare cash .But are they worth it for a outlay of £5500 for a 4 kw system living in the north of England with south facing Roof .Are there any users who can tell me how long to get my money back and is this a better idea than having the money stuck in a bank earning next to nothing ..............thanks:beer:

Fruit_and_Nut_Case

Almost certainly worth it if you can pay outright and not need to borrow for finance. I used some of my Cash ISA savings a couple of years ago to get mine and haven't regretted it.

I expect someone from "oop north" will be along in a moment to comment on the fine details.

EricMears

Nellybee wrote: »

But are they worth it for a outlay of £5500 for a 4 kw system living in the north of England with south facing Roof .

I don't really think of Derbyshire as "the North" but doubt conditions in Cumbria are much worse.

In the 2 years from 1-Nov-11 to 1-Nov-13 we generated 7158 kWh (= 3579 kWh pa) with what you 'll notice from the autosig a very shallow roof.

Obviously my FIT rate of almost 50p is a lot better than anyone will get this year but my panels cost over twice as much as the quote above. My ROI works out at around 13%; I'd expect quote above to make at least 8%

Martyn1981

Nellybee wrote: »

Hello
I have been thinking for a while about solar panels now i have some spare cash .But are they worth it for a outlay of £5500 for a 4 kw system living in the north of England with south facing Roof .Are there any users who can tell me how long to get my money back and is this a better idea than having the money stuck in a bank earning next to nothing ..............thanks:beer:

Hiya Nelly.

Lots of ways of working this out, and different people will see differing ways as important.

First, we need to work out income and savings. Depending on location your generation will vary, but roughly for Liverpool, Leeds or Newcastle a 4kWp system, south facing, with no shade could generate around 3,600kWh’s per year.

Income has 3 components:
1. Feed in tariff (FiT) @ 14.9p/kWh = £536
2. Export 50% deemed @ 4.64p/kWh = £84
3. Leccy savings perhaps £80 to £160 = £120
Total £740

Cashback - simple version, £5,500/£740 = 7.43 years.
Complex version will include lost interest on the monies invested, but additional interest on the income and savings as they come in each year, inflationary increases in the 3 income elements, panel degradation (perhaps 0.5% pa) etc, but if interest rates are low, around 2%, this won’t make much difference, and will still be around 7 to 8 years.

Profit point – You make a profit, once all costs have been accounted for. In the case of investing in PV, your two main costs will be the lost interest on the monies invested, and the depreciation of the ‘asset’ over a ‘reasonable time’.

So assuming cost of capital in year 1 is 2%, then that’s £110, and depreciating the PV system over the 20 year FiT scheme is £275 (£5,500/20), total costs are £385. £740 - £385 = £355 profit in year 1. Or to describe that better, £355 better off, than investing it in a low rate savings scheme. In year 2 the figures improve slightly as you also have the interest earned on the £740 from year 1 …… and so on.

Can I ask, where did you get the £5,500 figure from, that’s a good price, is it an actual quote, or just a figure you’ve heard? Nothing wrong with it, just don’t want you to assume too low a figure.

Being a little negative, assuming a cost of £6,000, and an alternative investment (somewhere?) of 5%, the cashback becomes 10 years*, and the year 1 profit becomes £140 (£740 – (£300 interest + £300 depreciation)).
(*assuming annual income from PV is only re-invested at 2%)

Lots of guesses and assumptions in here, but happy to help you polish it if you want.

Mart.

silverwhistle

I must admit that my thoughts were exactly the same as yours, Nellybe, and I had mine installed this summer. Admittedly I live to the south with better returns, but I took very much a rule of thumb approach. You might possibly get 5% return (I certainly do on another investment) but there is a risk. There's absolutely no risk with knowing what's going to happen with cash - you just know that it's going to continue to lose value with current government financial policies. I took the view that converting cash into an asset was a better idea - and should I need a couple of grand for a new boiler (say) at least I've got a regular income should I need to borrow. It's also good to have a buffer against rising energy prices, and you'll find you become more aware of energy consumption and usage patterns and also save that way.

[Deleted User]

silverwhistle wrote: »

It's also good to have a buffer against rising energy prices, and you'll find you become more aware of energy consumption and usage patterns and also save that way.

Yup solar PV certainly makes me more of a scrouge everyday

Even if the wife turns on an LED during the day :mad:

:rotfl:

PS Now she tells me she has lit the log burner whilst doing the ironing... :shocked:

Not happy...

zeupater

EricMears wrote: »

... In the 3years from 1-Nov-11 to 1-Nov-13 we generated 7158 kWh (= 2386 kWh pa)

???? .... :think: ... :idea: ... :eek: ... :whistle:

EricMears

zeupater wrote: »

???? .... :think: ... :idea: ... :eek: ... :whistle:

how time flies when you're enjoying yourself

zeupater

EricMears wrote: »

how time flies when you're enjoying yourself

Yes, but ... is it 2 years (as per the dates) or 3 (as stated) ... then which number should the total generation be divided by ?? ....

HTH
Z

Nellybee

Just had solar man around cant get 4kw system says i can only get 10 panels on my roof .So will it take longer to get my money back or will there be no difference what he says it will be cheaper so less outlay .And also power prices are only going to go one way so he s doing a quote with all the figures will let you know how i get on .The 4kw system was £5500 plus vat which is only 5% on solar panels i thought this was a good deal so will see what a 2.5kw system costs.:j

tunnel

Nellybee wrote: »

Just had solar man around cant get 4kw system says i can only get 10 panels on my roof .So will it take longer to get my money back or will there be no difference what he says it will be cheaper so less outlay .And also power prices are only going to go one way so he s doing a quote with all the figures will let you know how i get on .The 4kw system was £5500 plus vat which is only 5% on solar panels i thought this was a good deal so will see what a 2.5kw system costs.:j

You could put 10 x sunpower/ben-q panels on the roof, both are around 325W panels thus giving you a 3.25kWp system. The panels are more expensive but are very handy if your limited with space on your roof.