Solar panels FIT rebates

robinwales

Yesterday I ordered a 4KW solar panel system to go on my roof (16 panels). I was assured that I will get the current FIT rebates as an energy producer before any possible reductions planned by the government. Installation should be within the next 2 weeks.

I'm having trouble grasping the figures, which frankly seem unbelievable. My wife and I live in a 4 bed detached house in West Wales (1,800 sq ft). House is 16 years old, well built, and well insulated. Doubled glazed. Our heating is from a Worcester/Bosch oil boiler (16 years old) and costs £1100 a year in oil fuel.

Our current electric bill is £800 a year on standard tariff of 14.4p KWh. We are away from home for about 60 nights a year in a typical year, and on those days electricity costs are minimal (Fridge and septic tank). The salesman said that due to our being retired and at home during the days we are there we would be able to utilize the solar power more if we did high consumption activities during daylight hours. That makes sense. That will take our on-grid bill down to about £500 a year. But... we will get a FIT rebate for generation which amounts to £540 a year, which effectively wipes out that charge for what we use. So, we get free electricity?

I realize we need to take account of the capital cost of the panels (£6500 over 20 years) and that would be about £330 a year, but getting 'free' electricity does seem a particularly good deal. Or have I got that wrong?

Cardew

You are better posting in the Green and Ethical section of MSE where all the experts post.


However some points.


1. 4kWp Installations are currently generally available for under £5.000.


2. Why get electricity at standard rate? Electricity is available some 40% cheaper than 14.4p/kWh.


3. There is no way you will save £300 a year off your bills especially as you are away for 60 days a year. £100 to £150 would be more typical.


4. Any savings on water heating should be costed at the price of oil - which is currently under 3p/kWh


5. Investing £6500 in solar over 20 years isn't a simple case of calling it £330 a year. You have to take into account loss of interest, and £6500 in a long term ISA can produce nearly £200pa compounded.




I am not saying it is a bad deal, but the saving figures are exaggerated and it seems the cost of installation is too high. But go to the Green and Ethical section for a more informed opinion.


P.S. Can you still cancel? and get a cheaper installation price?

macman

The only really high consumption activities are heating, hot water and maybe washing/dishwasher/tumble drier. Since you have oil CH and DHW, you are not in a position to switch those first two (the big ticket ones) to electricity-and of course the demand for hot water and heating is mainly in the hours of darkness and in winter when your solar PV will produce precisely zero.
The rep has done what he is expected to do and hyped up the value of the product.

robinwales

Thank you for the detailed replies.

Cardew wrote: »

1.. 4kWp Installations are currently generally available for under £5.000.

The price range seems to be £5,000 - £7,500. The ones we are buying are German made. They are black coated rather than silver which I think looks a lot better, especially as we have a smart property. Initially I wanted them ground-mounted, but the salesman said we had too much shade - which we have.

Cardew wrote: »

2. Why get electricity at standard rate? Electricity is available some 40% cheaper than 14.4p/kWh.

I am thinking of swapping, but I swapped before to one of the smaller suppliers a few years ago and they were an absolute nightmare as far as customer services were concerned.Have now swapped back to SWALEC.

Cardew wrote: »

3. There is no way you will save £300 a year off your bills especially as you are away for 60 days a year. £100 to £150 would be more typical.

Our total consumption for past 12 months was 4,880 KWh - 16 KWh a day for 300 days (365 less the 60 days we are away) at 14.4p which cost, with VAT and standing charge, about £800. We did a test yesterday and measured from the meter our useage between 10:00 and 15:00. We used the dishwasher, washing machine, tumble drier, and cooked our main meal at lunch-time (which we always do). Our consumption was 8KWh, which is half our daily consumption of 16 KWh - so why should we not save 50% of our bill? I agree that we need to run some of those big usage items one at a time to avoid draining the power from the solar, but we are in a position to do that. We wouldn't have all that equipment on every day, but in summer we do have some heavy useage garden tools on (2.5KWh shredder, electric lawn mower, pressure washer etc), and all of those could be run during the solar panel hours. because we are at home during the day we can use all the heavy machines and kitchen equipment during the day when the electricity is free from the solar. I appreciate that many working households are not able to do all of that as they are out at work during daylight hours, and for them I should think solar is a bad idea.

Cardew wrote: »

5. Investing £6500 in solar over 20 years isn't a simple case of calling it £330 a year. You have to take into account loss of interest, and £6500 in a long term ISA can produce nearly £200pa compounded.

If £6,500 is invested over 20 years at 3% the return would be about £11,700. Buying solar panels loses you the capital, but if you get back £800 a year (£540 from generation taffif and £260 from energy savings) then that results in £16,000 after 20 years. It is also tax free, unlike the interest earned on an investment.

robinwales

macman wrote: »

The only really high consumption activities are heating, hot water and maybe washing/dishwasher/tumble drier. Since you have oil CH and DHW, you are not in a position to switch those first two (the big ticket ones) to electricity-and of course the demand for hot water and heating is mainly in the hours of darkness and in winter when your solar PV will produce precisely zero.
The rep has done what he is expected to do and hyped up the value of the product.

I did look at getting an air source heat pump for the heating, but the costs for the eventual returns just looked too high. Our oil bill for heating is only £1,100 a year for a 4 bed 1,750 sq ft house with two adults.

Cardew

robinwales wrote: »

Thank you for the detailed replies.


The price range seems to be £5,000 - £7,500. The ones we are buying are German made. They are black coated rather than silver which I think looks a lot better, especially as we have a smart property. Initially I wanted them ground-mounted, but the salesman said we had too much shade - which we have.


I am thinking of swapping, but I swapped before to one of the smaller suppliers a few years ago and they were an absolute nightmare as far as customer services were concerned.Have now swapped back to SWALEC.


Our total consumption for past 12 months was 4,880 KWh - 16 KWh a day for 300 days (365 less the 60 days we are away) at 14.4p which cost, with VAT and standing charge, about £800. We did a test yesterday and measured from the meter our useage between 10:00 and 15:00. We used the dishwasher, washing machine, tumble drier, and cooked our main meal at lunch-time (which we always do). Our consumption was 8KWh, which is half our daily consumption of 16 KWh - so why should we not save 50% of our bill? I agree that we need to run some of those big usage items one at a time to avoid draining the power from the solar, but we are in a position to do that. We wouldn't have all that equipment on every day, but in summer we do have some heavy useage garden tools on (2.5KWh shredder, electric lawn mower, pressure washer etc), and all of those could be run during the solar panel hours. because we are at home during the day we can use all the heavy machines and kitchen equipment during the day when the electricity is free from the solar. I appreciate that many working households are not able to do all of that as they are out at work during daylight hours, and for them I should think solar is a bad idea.


If £6,500 is invested over 20 years at 3% the return would be about £11,700. Buying solar panels loses you the capital, but if you get back £800 a year (£540 from generation taffif and £260 from energy savings) then that results in £16,000 after 20 years. It is also tax free, unlike the interest earned on an investment.

Well if you are content - go for it: but your installation costs are too high and your savings exaggerated and you appear to have ignored any possible repair costs.

Look at it another way, if a firm asked you to 'invest' £6,500 with them and they would gradually give you back YOUR money so after about 12 years you would have got all your money back and for the next 8 years you would be well in profit - provided there were no problems with the system - I suspect most retired people would not be interested.

We used the dishwasher, washing machine, tumble drier, and cooked our main meal at lunch-time (which we always do). Our consumption was 8KWh, which is half our daily consumption of 16 KWh - so why should we not save 50% of our bill?

Go on the MSE 'Green and Ethical' forum and read the thread 'talking about my generation' and read the thousands of posts where those with solar panels detail their daily consumption. You will then get a picture of how much is likely to be generated over the year.

Also your system(presumably 4kWp) will output a maximum of say, 4kW, very rarely over the year. Your dishwasher, tumble drier and washing machine can each use up to 3kW at some point during their cycle; the cooker considerably more than 3kW. The chance of you being able to cover all of that consumption on any given day are close to zero even on a bright sunny day. Much of the year you will generate a few hundred watts.

Ectophile

Bear in mind that the amount of power generated by solar panels depends entirely on the weather. For the last few weeks, with the short days and dismal grey weather, my panels have generated almost nothing.

However, when spring comes, the days get longer and the sun starts to come out. The generation then rockets. Throughout the spring and summer, I generate far more power than I can ever use.

Martyn1981

robinwales wrote: »

The price range seems to be £5,000 - £7,500. The ones we are buying are German made. They are black coated rather than silver which I think looks a lot better, especially as we have a smart property. Initially I wanted them ground-mounted, but the salesman said we had too much shade - which we have.

Hiya Robin. I'd normally disagree with that range, suggesting £4.5k to £6k. But I appreciate that the current government changes have caused a solar rush, so it's very hard to know where the line is at the moment.

£6.5k isn't great, but it's alright I suppose given the situation. I have black on black panels on the front of my house, but it only adds about £5 to £10 per panel.

I suspect the salesman was correct about ground mounting, shading would be worse, you'd need planning permission (for more than 9m2 (6+ panels)) and you'd need to clean them as leaves etc would blow onto them and stick to the dew.

robinwales wrote: »

Our total consumption for past 12 months was 4,880 KWh - 16 KWh a day for 300 days (365 less the 60 days we are away) at 14.4p which cost, with VAT and standing charge, about £800. We did a test yesterday and measured from the meter our useage between 10:00 and 15:00. We used the dishwasher, washing machine, tumble drier, and cooked our main meal at lunch-time (which we always do). Our consumption was 8KWh, which is half our daily consumption of 16 KWh - so why should we not save 50% of our bill? I agree that we need to run some of those big usage items one at a time to avoid draining the power from the solar, but we are in a position to do that. We wouldn't have all that equipment on every day, but in summer we do have some heavy useage garden tools on (2.5KWh shredder, electric lawn mower, pressure washer etc), and all of those could be run during the solar panel hours. because we are at home during the day we can use all the heavy machines and kitchen equipment during the day when the electricity is free from the solar. I appreciate that many working households are not able to do all of that as they are out at work during daylight hours, and for them I should think solar is a bad idea.

For leccy savings a figure I'd usually suggest is £120 (£80 to £160). However, as a relatively high user, and the ability to make best use of generation during the day, your savings will be higher than average. My pre-PV consumption was about 3,000kWh, and we save about £180.

I don't think you'll get as high as £300, but if you do work hard, and spread consumption out across the generation period, then I'm sure you'll do well, plus you'll probably find that better awareness of consumption will mean you reduce demand a bit more, no matter how conscientious you thought you were already.

robinwales wrote: »

If £6,500 is invested over 20 years at 3% the return would be about £11,700. Buying solar panels loses you the capital, but if you get back £800 a year (£540 from generation taffif and £260 from energy savings) then that results in £16,000 after 20 years. It is also tax free, unlike the interest earned on an investment.

I agree that if the funds are coming from a low interest source (cash ISA etc) then the long term returns are excellent. But don't forget to factor in a replacement inverter, which is likely during the first 20 years. These cost £400 to £700, so assume around £1k (inflation + labour) at some point. Other maintenance should be negligible, but there will always be the unlucky few.


[Edit: Possibly too late, but you may still find something of interest in the PV FAQs. M.]

Mart.