On-grid domestic battery storage

zeupater

zeupater said:

thevilla said:

I was hoping there'd be some news on vat for retrofit from last week's 'budget that isn't a budget '.  Nothing as far as I know 😕

Hi

Economically, that makes perfect sense .... I really don't follow the need for the introduction of schemes to spend taxpayer money up front in order to encourage the growth of whatever the political 'current thing' pet project is when it can be done for effectively £zero up front and achieve the same goal faster ...

Considering the current size of the domestic battery sector the total VAT take must be relatively closer to £zero than any meaningful sum therefore the anticipated 'risk' to the government's revenue stream for removing VAT on ESS is low, so what's the issue? .... 

Simply stimulating the uptake of ESS through the initial removal of VAT would encourage consumers to move towards a more balanced energy environment far more readily than bunging £billions into pretty useless schemes such as smart-meters ... our home is currently importing 330W and I'm stating that without reference to a smart-meter that we're continually told we need to do so in order to raise the profile of personal energy usage & therefore save the planet (subtext - costing £500+ up front of everyone's money which needs to be replaced on a regular basis!) .... when the sector has successfully grown to an agreed threshold, the VAT rate for the ESS could even be raised to the lower (5%) rate which is applied to domestic energy without any real administrational fuss, just advise it's happening beforehand and press a button on the appropriate day, so no worries of dismissing armies of government or related agency employees: there you go, a low cost (/almost no cost), self funding solution towards the net zero goal with the added benefit of eventually creating a 5% VAT revenue stream to pay the salaries of all of those well paid civil servants that haven't got a clue on how strategic thinking works .... now, don't even get me started on how to scope/build subsidy schemes which would encourage overall installed costs to fall dramatically & thus accelerate uptake!!

Here end-eth today's sermonic rant on inept governance ....    - Z     

Hi

<Cough> .... sorry!! ....

Inept Governance?? ... well either I've been endowed with psychic powers, someone 'in the know' reads this thread ... or it's true that coincidence is a subset of logical thought ....

Link .... https://www.gov.uk/government/consultations/vat-energy-saving-materials-relief-improving-energy-efficiency-and-reducing-carbon-emissions/outcome/summary-of-responses#next-steps  ... took some time to make the decisions and publish them though !!

HTH - Z

markyp64

Hi there - just moved and some big decisions to make - am pretty clear battery storage (alongside heat pump and solar panels and EV) is the way forward for me. What I am less clear on is which batteries to choose. Givenergy AIO sounds great - good service, tie in with Octopus, great tools to manage. But am also being quoted very cheap prices with companies I’m not familiar with - eg Felicity with 12.5k storage for less than £3k which seems v cheap. So am tempted to go for high storage at low cost?? On paper they do look ok in terms of other factors - no of cycles, warranties, DOD. Am happy to go cheap and cheerful but a bit nervous this might be a false economy. Any thoughts much appreciated!

Thanks 

Mark

orrery

markyp64 said:

So am tempted to go for high storage at low cost?? On paper they do look ok in terms of other factors - no of cycles, warranties, DOD. Am happy to go cheap and cheerful but a bit nervous this might be a false economy. Any thoughts much appreciated

You pays your money and takes your choice.

We can all relate our personal experiences, each one no more valid than the rest.

I found a lot of recommendations and went with U5000 Pylontech batteries and an AC coupled 3600 Lux inverter. I like the modularity of the batteries, sitting in a rack in the garage. So far all good.

Someone I know went for a Givenergy hybrid, solar and battery system and had so many software problems that they couldn't deliver fixes for, he had them pulled out - they told him that no-one else was having the same problems (the quoted nett capacity wasn't available). He only knew because he was monitoring very closely. They did admit to the issue but couldn't give any assurances on the fix. He replaced them with a hybrid Pylontech/Lux combination.

EricMears

QrizB said:

Early FITs were priced to give a ~5% IRR over the duration of the scheme. It was not meant to be a way of transferring money from billpayers to middle-class homeowners and rent-a-roof companies.

I don't think so !    Our panels were fitted in 2011 - before prices started dropping - but I was calculating that I should get initial annual payments of around 10%.  In fact first year payments were more like 15% and have continued to rise in line with inflation ever since.

I first looked at fitting solar panels when planning our new build in 1996.  At that point,  it would have taken 400 years (yes : four hundred years !)  to recoup the investment.  From 2011 it was less than eight years.

QrizB

EricMears said:

QrizB said:

Early FITs were priced to give a ~5% IRR over the duration of the scheme. It was not meant to be a way of transferring money from billpayers to middle-class homeowners and rent-a-roof companies.

I don't think so !    Our panels were fitted in 2011 - before prices started dropping - but I was calculating that I should get initial annual payments of around 10%.  In fact first year payments were more like 15% and have continued to rise in line with inflation ever since.

Thank you for your anecdote which illustrates my point perfectly

The FIT scheme was intended to provide a 5% return. FIT recipients like you (and me) found ourselves receiving more than double that, which is why DECC reduced the FIT payment rates steeply.

You'll find the consultation doc from 2011 here. On page 3 you'll find para 4 of the executive summary, which states:

Falling costs combined with a number of other factors, including rising electricity prices, have meant that the returns available to new PV generators are higher than originally envisaged. The tariffs for solar PV were originally intended to provide a return of around 5% for well located installations but our analysis suggests that the returns available now are substantially more than that.

The 5% figure is repeated a few times in the main body of the consultation document, There's also a footnote pointing to the Impact Assessement where these costs/returns are calculated. Sadly the link in the footnote is broken and I've not yet turned up a copy of the IA.

paul991

yes can see why  they reduced the payments but the speed of reduction reduced the demand which caused a lot of companies good and bad to go out of business.

QrizB

paul991 said:

yes can see why  they reduced the payments but the speed of reduction reduced the demand which caused a lot of companies good and bad to go out of business.

Reducing demand was the whole point of reducing the FIT, though. The budgeting assumed 137MW of solar PV over the first two years. In practice there were 255MW installed in the first 18 months.

paul991

yes that s true but the speed of this did not give the companies time to adapt and so set the industry back  

Exiled_Tyke

EricMears said:

QrizB said:

Early FITs were priced to give a ~5% IRR over the duration of the scheme. It was not meant to be a way of transferring money from billpayers to middle-class homeowners and rent-a-roof companies.

I don't think so !    Our panels were fitted in 2011 - before prices started dropping - but I was calculating that I should get initial annual payments of around 10%.  In fact first year payments were more like 15% and have continued to rise in line with inflation ever since.

I first looked at fitting solar panels when planning our new build in 1996.  At that point,  it would have taken 400 years (yes : four hundred years !)  to recoup the investment.  From 2011 it was less than eight years.

Be careful here. IRR and annual percentage returns are not the same thing.  Annual payments of 10% for a 25 year programme equate to an IRR of around 8.7%. IRR takes into account the fact that the initial investment is not redeemable at the end of the project. Annual percentage returns are relevant when the initial investment is recovered as with the case of a savings account.   If the aim was for 5% IRR with some margin for error in favour of the PV owner then 10% annual payments isn't too far off. In fact annual percentage returns of 7.1% would equate to 5% IRR (again over 25 years) 

EricMears

Exiled_Tyke said:

EricMears said:

QrizB said:

Early FITs were priced to give a ~5% IRR over the duration of the scheme. It was not meant to be a way of transferring money from billpayers to middle-class homeowners and rent-a-roof companies.

I don't think so !    Our panels were fitted in 2011 - before prices started dropping - but I was calculating that I should get initial annual payments of around 10%.  In fact first year payments were more like 15% and have continued to rise in line with inflation ever since.

I first looked at fitting solar panels when planning our new build in 1996.  At that point,  it would have taken 400 years (yes : four hundred years !)  to recoup the investment.  From 2011 it was less than eight years.

Be careful here. IRR and annual percentage returns are not the same thing.  Annual payments of 10% for a 25 year programme equate to an IRR of around 8.7%. IRR takes into account the fact that the initial investment is not redeemable at the end of the project. Annual percentage returns are relevant when the initial investment is recovered as with the case of a savings account.   If the aim was for 5% IRR with some margin for error in favour of the PV owner then 10% annual payments isn't too far off. In fact annual percentage returns of 7.1% would equate to 5% IRR (again over 25 years) 

Indeed,  but my 15% of investment returned within the first year is a lot more than 7.1%