solar panel quote

lisyloo

BTW - we ended up getting Solar edge with power optimisers, monitoring with web portal/alerts and also a solar iboost to divert extra power to the immersion heater.

We paid more (£8,800) but preferred to have the extra technology to mitigate the risks from shading/dual aspect etc.

We actually found a better return (as far as we can tell) from spending more and going for a more expensive install.

I'm not saying that would be right for you, but I am saying that going for the cheapest solution is not necessarily always the best.
I know this is an MSE site, but cheapest is not always best value.

Of course I was doing that from the point of view of paying up front and not funding on a loan which might change the maths.

You need to do a LOT of research if you want to find the best option.
There are lots of things you haven't even begun to consider.

ChopperST

We had a 4KW system plus a Immersun fitted for just over £6.5k in Jan this year.

This was in Leeds, West Yorkshire.

The economics of borrowing money to fund solar panels really don't stack up IMHO, unless you can find a supplier who will let you pay on a 0% purchase card and pay it off before the deal runs out or at least balance transfer.

jimmyboy420

lisyloo wrote: »

BTW - we ended up getting Solar edge with power optimisers, monitoring with web portal/alerts and also a solar iboost to divert extra power to the immersion heater.

We paid more (£8,800) but preferred to have the extra technology to mitigate the risks from shading/dual aspect etc.

We actually found a better return (as far as we can tell) from spending more and going for a more expensive install.

I've done exactly the same and been very happy in the two weeks it's been generating.

I ended up with an in-roof system, SolarEdge optimisers, and SunPower panels. They also took a chimney down for me. So I really was investing in the most expensive end of the market! But generation is great, even when shading is effcting my install. And it still worked out cheaper per kWp than your install!

This was in the South East. I'd happily recommend Solar Roof (once they get rid of the scaffolding and old tiles from my front garden - which I'm not too concerned about right now - they were very busy before the end of the month!)

Cheers,

James

ed110220

The first thing I would do is see if you could fit a 'standard' 4 kW system if you use two roof faces. Typically this would be sixteen 250 W panels. If you can only fit 11 panels then I would look into using higher wattage panels such as the 327 W BenQ or Sunpower models.

If you get 2590 kWh per year from a 2.75 kW system you should get 3388 kWh from eleven 327 W panels. This shouldn't cost more than your 2.75 kW quote so the payback time should be significantly better.

Ed

nigelpm

ChopperST wrote: »

We had a 4KW system plus a Immersun fitted for just over £6.5k in Jan this year.

This was in Leeds, West Yorkshire.

The economics of borrowing money to fund solar panels really don't stack up IMHO

I'd like to see your calculations for this.

I reckon you can get ROI of at least 10% currently.

As long as you borrowing below this it stacks up.

Martyn1981

nigelpm wrote: »

I'd like to see your calculations for this.

I reckon you can get ROI of at least 10% currently.

As long as you borrowing below this it stacks up.

Hiya. Since the money spent on the system is gone, then that also has to be recouped. Working it out over a 20 year FiT period (though hopefully the system will last longer) means that 5% (100%/20) is effectively lost as depreciation. Perhaps an additional 0.5% should be allocated for inverter replacement during that lifetime too.

So technically with a 10% ROI (gross) a little over half is already accounted for before you consider the cost of capital. If the cost of capital is very low, perhaps 0.1 to 1% from a cash account then fine, but as the cost rises into loan territory things get tighter, fast.

Obviously it's not as simple as that, the FiT and export elements are index linked, and our expectations of leccy prices is that they will rise too. But for yr1 analysis it is a bit tighter than it first appears.

Mart.

ChopperST

Borrowing £6.5k for 10 years at 5.6% will cost £1951.

We don't know the OP's estimated generation figure to factor in his break even point so I'm using my own estimate by my installer.

My breakeven point is roughly Y7 - 8 and that is on a 4kW system.

The OP's would be pushed to approximately Y10 with the finance. Add in a new inverter (unless the agreement with the installer includes maintenance) and you are probably looking at Y11 before you are in the black which again (and is only my opinion) is far too long to see a return on investment.

This is all semantics however without the OP's estimated generation figures.

nigelpm

Don't follow your logic - I've just run a few cash flows in a spreadsheet.

As long as you consider the system will last 20 years + and you'll only need one inverter change it works.

With financing you end up cash flow positive until the loan repayment assuming interest only - then takes 5/6 years extra years (to year 16) to fully pay back.

With a repayment loan and paying back your income each year you'll pay back fully four/five years after you've paid off the loan.

zeupater

nigelpm wrote: »

Don't follow your logic - I've just run a few cash flows in a spreadsheet.

As long as you consider the system will last 20 years + and you'll only need one inverter change it works.

With financing you end up cash flow positive until the loan repayment assuming interest only - then takes 5/6 years extra years (to year 16) to fully pay back.

With a repayment loan and paying back your income each year you'll pay back fully four/five years after you've paid off the loan.

Hi

Whether it takes 16 years or 17 (my post #5 above) years to breakeven isn't the issue, the op was informed by the company that payback would be 8 years ....

A couple of further observations .... firstly, on a current cost basis, allowing for a replacement inverter at ~year10 adds a further two years to the payback period, pushing payback to ~19 years ... next, there is a lost opportunity to simply put-aside ~£350/year (850-500), the total compounded value pushing the repayment threshold just about to, or beyond the FiT contract period .... and don't forget, whilst paying the loan, annual income & savings would be ~£500 and seasonal whilst outgoings of £850 would be made at a standard monthly rate, so you couldn't make repayments directly from the income, which is effectively what the offer alludes to - pay for 10years, break even in 8 would mean it's self financing within the period of the loan !.

The reason the price is set at the level quoted is directly related to the maximum that you could get away with without the customer losing out over the length of the FiT contract, something we see described time & time again on these boards.

HTH
Z

ed110220

Surely the point is that the proposed system is rather small and expensive for what it is and the loan isn't a particularly competitive rate either, but from that you can't generalise about whether the principle is sound.

Say you have a 4 kWp system on a south facing roof at Frome.

You generate 3780 kWh/year.

This gives a FIT income of £544/year. Assuming deemed export of 50% you get £90 from export. Assuming you consume a quarter of your generation as a direct replacement for electricity bought at 15 p/kWh (a fairly conservative assumption?) you save £142. So in total you earn/benefit £776/year.

You buy the system for £6500 by extending your mortgage at 4% over 20 years, which costs you £468/year so you are £308/year better off.

Ed