Does domestic solar make financial sense?

pinnks

I have been recording all sorts of data from the outset in June 2013 so have about 5 years worth. My 3.5kWp system was installed in 2013 and the smaller system in March 2014, so not quite 5 years of data on the total spend but close.

I save about £200 on import each year (accurate data for 3 years and pretty good estimates for the first two). I have diverted at about £150 per year (immersion, UFH and oil radiators) and earned FiTs of about £750 per year on average (currently on 17p and 15p for the two systems).

All together I invested, with the two diverters, just over £11k and have recovered almost exactly 50% in 5 years (for one system) and 4 1/4 years (for the other system).

Add future inflation into the mix and I should break even at around the 9-year point. This is actually a little longer than the installer's projections even though their annual generation estimates were a little on the low side. Must mean their (hyper)inflation estimates and own usage estimates were too high.

But that said we have drastically reduced consumption over the same period too with new A+++ appliances, LED lighting and so on, so perhaps a little harsh to criticise their usage estimate. For instance, our old fridge-freezers (all three) drank a whopping £210 of leccy per year. The new Fridge and two freezers (same overall capacity) take only about £50 of the stuff, and so on...

:beer:

Coastalwatch

Hengus wrote: »

I have just sold my home with a 2.12kWp array that generates an annual income/savings of c.£1000 a year. Despite getting a raft of (often daft) questions from the buyer’s solicitor, I am convinced that the income/savings from my array was a factor in my sale.

I am now struggling with the advantages/disadvantages of getting PV solar installed at our new home. There is an unobscured roof space for a 4kWp array but, even with an install cost at the lower end of the range, I cannot seem to make the sums add up given the falling level of FIT payments. I guess that I am not alone in thinking that, until battery storage becomes more affordable, solar PV is a life choice rather than a sensible financial decision. I don’t really want to get quotes unless I am minded to take the installation forward. Am I missing something?

As someone who has only just had a PV array installed on the basis of my own figures that don't take any inflation into account it will take 14 years before breakeven is achieved. At 68 I'm naturally optimistic that I'll see this realised but even if I/we don't, our children will. They will also benefit from clean energy and the reduction in pollution that comes with it.

Strangely, I arrived at installing a PV array because of the need to replace our ageing diesel, as opposed to having it installed purely as a stand alone investment.
Our eleven year old diesel is to be replaced next week with an EV. It's pollution free when charged from the sun, has zero road tax and with only 5% VAT paid on fuel when charging from the grid will returns saving of approximately £900 annually(not counting possible lower service charges too).
We are in the enviable position of being retired so the EV will sit on our drive in the daytime when there is plenty of surplus solar energy to charge it with. I appreciate that others who need their vehicles for work etc are not so fortunate.

Home storage is not financially viable but may become so in the future which may return some small savings then.

Sadly, history will show how much our generation polluted the Earth. I'm just hoping that by engaging with renewable energy we can show one way forward to a slightly cleaner future for our grandchildren.

Zarch

After pouring over the FIT figures, inflation indicators and tons of other data on my own spreadsheets I've come to the conclusion that the amount of energy you use (of what you generate) is the real key to driving down the numbers of years you need to pay the system off.

The current (right now) generation figure of 5p and export of 4p are nothing to write home about but they are set and assuming a set inflation you can be sure of these.

So for every 1kWh of system installed you can get back £750 over the next 10 years assuming inflation of 3%.

1kWh: £750
2kWh: £1500
3kWh: £2250
4kWh: £3000
5kWh: £3750

Onto using that generated energy......

Can you say £8 per month from your current electricity bill? With yearly energy rises of 5% that will save you £1200 over the 10 years.

£8/month: £1200
£16/month: £2400
£24/month: £3600
£48/month: £4800

Obviously there are other costs and additions not fully mentioned. Inverter replacement (maybe 10 years). Gradual decrease of system efficiency over time etc.

So for me, if I went 4 kWh system (£3000 if FIT) and I could save £16/month (£2400 saving) that would be £5400 over 10 years.

And from current quotes, £5000/£5500 seems about right for a 4kWh system (1.25 per kWh).

But obviously, if I can save more, say £24/month, then i'd get back £6600 back over 10 years, so will have paid the system back more like 8 years.

Obviously, with FIT guaranteed for 20 years once you've paid the system off, whether its in 8 years or 10 years, you are still going to get at least 10 years of pure profit out of an install.

Saving £16/month on a 4kWh system you could be looking at as much as £13,000 back in total over 20 years. Based on FIT and savings.

Again, increase your savings to £24/month and its over £16,000.

Does all that make sense? :rotfl:

zeupater

Zarch wrote: »

After pouring over the FIT figures, inflation indicators and tons of other data on my own spreadsheets I've come to the conclusion that the amount of energy you use (of what you generate) is the real key to driving down the numbers of years you need to pay the system off.

The current (right now) generation figure of 5p and export of 4p are nothing to write home about but they are set and assuming a set inflation you can be sure of these.

So for every 1kWh of system installed you can get back £750 over the next 10 years assuming inflation of 3%.

1kWh: £750
2kWh: £1500
3kWh: £2250
4kWh: £3000
5kWh: £3750

Onto using that generated energy......

Can you say £8 per month from your current electricity bill? With yearly energy rises of 5% that will save you £1200 over the 10 years.

£8/month: £1200
£16/month: £2400
£24/month: £3600
£48/month: £4800

Obviously there are other costs and additions not fully mentioned. Inverter replacement (maybe 10 years). Gradual decrease of system efficiency over time etc.

So for me, if I went 4 kWh system (£3000 if FIT) and I could save £16/month (£2400 saving) that would be £5400 over 10 years.

And from current quotes, £5000/£5500 seems about right for a 4kWh system (1.25 per kWh).

But obviously, if I can save more, say £24/month, then i'd get back £6600 back over 10 years, so will have paid the system back more like 8 years.

Obviously, with FIT guaranteed for 20 years once you've paid the system off, whether its in 8 years or 10 years, you are still going to get at least 10 years of pure profit out of an install.

Saving £16/month on a 4kWh system you could be looking at as much as £13,000 back in total over 20 years. Based on FIT and savings.

Again, increase your savings to £24/month and its over £16,000.

Does all that make sense? :rotfl:

Hi

... but it would it be possible for you to reduce your energy cost by £48/month with a 4kWp system? ....

We don't have proportional diversion and our 4kWp setup saved somewhere around £120 in an average year, so around £10/month and that seems to be pretty typical ...

Anyway, £48/month represents £576/year, possibly representing >20%-30% more than what most would expect to generate in a year, but it doesn't stop there .... the majority of annual generation would be at this time of year so the question posed is whether you're currently consuming well over 20kWh/day during daylight hours alone? - if not then there's a strong chance that a large proportion of generation would be exported, reducing the saving ... but if you are using that kind of level of energy/power you should really be looking at improving efficiency measures before solar!

HTH
Z

Zarch

zeupater wrote: »

Hi

... but it would it be possible for you to reduce your energy cost by £48/month with a 4kWp system? ....

We don't have proportional diversion and our 4kWp setup saved somewhere around £120 in an average year, so around £10/month and that seems to be pretty typical ...

Anyway, £48/month represents £576/year, possibly representing >20%-30% more than what most would expect to generate in a year, but it doesn't stop there .... the majority of annual generation would be at this time of year so the question posed is whether you're currently consuming well over 20kWh/day during daylight hours alone? - if not then there's a strong chance that a large proportion of generation would be exported, reducing the saving ... but if you are using that kind of level of energy/power you should really be looking at improving efficiency measures before solar!

HTH
Z

Yep totally agree. Our electricity bills are currently only £40/month (3600 per year usage), so no chance of saving some of the figures I listed.

Figures were just for illustration and you make excellent points that stress that you need to tailor any calculations personal to your own setup and usage patterns.

One question/situation for the floor that I find interesting.

If the install of 5kWh system costs £1000 more than a 4kWh system, you'll get £750 back in FIT over the first 10 years, so 3/4 of the extra costs are covered. But will that extra 1kWh throughout the year, especially through the winter/non summer months allow you to increase your overall percentage usage of generated energy?

Obviously the extra generated might be wasted during the summer, but crucially could having a higher generation ceiling during the winter mean you'd have more to use when you need it?

If that makes sense?