Installing solar panels and battery storage in 2018 - expensive hobby or viable proposition?

MrSugarfr33

Hi all,

Long time listener, first time caller. I had recently taken a plunge and leased a Leaf to cover my daily commute and I have since become sold on the whole idea of EV lifestyle. LEAF was just a gateway drug and I started toying with the idea of installing solar panels and battery storage. I really want to do it but I cannot convince myself and my other half that this is a financially viable proposition. I have had some quotes and I crunched the numbers but I can't make it work. I wonder if I can call upon the collective wisdom of the forum members, perhaps I am missing something.

My current situation is: I recently switched from British Gas to Avro where I pay 12.19p per kWh and 18.9p standing charge. Including car charging (I do about 1,600 to 2,000 miles a month) the household uses about 900 kWh of electricity a month.

I approached several companies and everyone has been very helpful, I haven't encountered any pushy salesmen yet.


First quote is for a 3.6kW system based on Csun 295W panels with 4.8kWh Pylontech battery for about £8,800 (which was £5,200 for panels and £3,600 for battery). The system is estimated to deliver about 3,800 kWh of electricity. I crunched the numbers and it looks like the FIT payment would be 3,800 x 4p generation payment plus 50% of 3,800 x 5.24p export tariff so in total, I should get about £252 a year. Now, let's assume (very optimistic scenario, will never happen) that I will manage to capture all that energy either by timing my car charging and appliances and by utilizing the battery (again, extremely unlikely with 4.8kWh battery but I am going to make this superoptimistic assumption for the purpose of this exercise), I will save money by not buying 3,800 kWh electricity from Avro. At today's prices, that is 3,800 x 12.19p = £463.22 saved. This super optimistic scenario ignores transmission losses and the obvious fact that there is no way I will use all 3,800 kWh myself, it is likely that most of it will go back to the grid for me to buy it back at 12.19p. Total saved and earned via FIT tariff is then £715. The installed system would cost me £8,800 plus about £500 in paperwork (turns out my new build house has permitted development rights withdrawn as a condition of planning permission so I need a full planning permission to install solar panels), so I am looking a 12 years just to break even. Very likely much longer than that.


I then started reading more about it and I don't really have a lot of confidence in Pylontech batteries and warranty they offer, once I started reading about batteries, I realised that Tesla Powerwall 2 is the only way to go - lowest price per kWh storage and backed by a massive corporation. Very few companies are Powerwall authorised installers so every next quote was higher than the previous one. Due to my usage and the fact that FIT is coming to an end, I want to get as large system as I can fit onto my roof. Depending on which company I ask, my roof can accomodate 16 or 18 panels.


Next two companies I approached were Tesla Powerwall 2 installers. Both charge about £6,800 for the battery, not much between them. First one quoted £9,370 (plus £980 for SolarEdge and £450 for pigeon proofing) for 18 LG NeON2 320W panels producing 5.76kWp with estimated 5118 kWh annual generation. Working on the (unrealistic) assumption that I will be able to use all of that, and export nothing, that is worth £995 to me in the first year in FIT and savings. Accounting for inflation, it will probably take at least 10 years to break even on panels and Powerwall battery warranty runs out after 10 years, I will probably need at least 5 more years to break even on the battery.


Second company went "all in" and pitched SunPower all-black 335W panels - they actually came and measured my roof and done a proper survey, free of charge - and decided only 16 panels will fit making it 5.36kWp system. According to their model, it will only generate about 4250 kWh per annum. The price for that system (NOT including £6,800 battery) is £10,800 with SolarEdge included but pigeon proofing for another £500, so with lower estimated generation, it will take even longer to break even on the panels.



The battery seems like a particularly poor investment, I understand people on average use about 50% anyway and certainly if I timed charging my Leaf right, I could self consume half of what I generate without battery. So in the best case scenario, battery means being able to consume 100% which means I won't have to pay for 2,500 kWh energy per years worth barely £322.50 at the prices I am paying now. There is still a gap between what I use (about 10,800 per annum) vs max production of 5,118 so perhaps with the battery I will be able to shift that remaining approx 5,600 kWh to night tarrif and save about 7p per kWh worth another £392. With the most optimistic scenarios, I may be able to break even after 10 years on the panel and battery. By then, battery will be out of warranty but panels technically will still be under 25 year product warranty so they should have 15 more years left in them. SolarEdge inverter also has 12 year warranty and I understand it can be extended to 20 years. From what I hear, inverters are what people are replacing most, panels seem to last forever.



LG and SunPower panels seem much more expensive, but on the other hand when I compare a quote for 12 Csun 295W 3.6kWp system which was £5,200 with a quote for 18 320W LG panel 5.76kWp for £9,300 few things come to mind. The second system is 60% larger so it makes sense for the price to be 60% higher so £5,200 with 60% on top is £8320. LG panels are likely to last longer and degrade less so over the life of the panels, I should be able to recoup that £1,000, which is about 7,700 kWh of electricity over 20-25 years. In fact then, both quotes are in the same ballpark when comparing £/kWp and looking at product quality. SunPower was recommended due to parts and labour warranty, apparently they pay for scaffolding to be erected and for shipping faulty panels back to factory. Not sure if that is something I can rely on in 20 years time so I am leaning towards LG panels offering similar power warranty and product warranty but saving about £1,500 on the installation cost.


In a nutshell, I would spend £17-18k, possibly voiding my new build home NHBC warranty and complicating sale of my house in the future. The equipment is warranted for 5-10 years tops and frankly speaking, I can't recall an appliance I have at home that is older than 5 years, things just break these days very quickly. All this to save/earn max £1,000 a year (although going up every year), likely much less. It is likely that the equipment will have to be replaced before it pays for itself. I would love to be able to generate my own electricity, but is this all a pipe dream at this point?


I am curious to hear fellow forum members thoughts, mainly around

• is it worth to spend £17-18k for the systems described above, given my annual consumption of 10,000 to 12,000 kWh?
• Is it better to go for rock bottom cheapest panels (with inferior warranties and relatively low output) or splash for LG or SunPowers (due to warranty and also due to the fact that the produce 10-20% more electricity than cheapest panels)?
• Are the prices quoted reasonable or am I being taken for a ride?
• Is extra £1,000 for SolarEdge worth it given that there is literally nothing shading my roof - no chimneys, no trees, nothing, Roof is dual aspect, southeast and northwest (the former obviously better for irradiation). In those circumstances, is £1,000 for SolarEdge a good investment, looking at 10-12 year lifespan?
• For better ROI, should I just cancel the battery and go for panels only and get battery later? The problem with that is VAT being 5% when battery is bought with panels and 20% without panels. On a Tesla Powerwall 2 that extra 15% is worth over £1,000 so battery would have to drop in price by £1,000 for me just to break even. With prices of everything going up, I can't see Tesla suddenly discounting their products by 20-25% in foreseeable future, so I figure I may as well get the battery now.

I appreciate any advice and feedback.

silverwhistle

It's a bit late for me to read all that and then give a coherent answer (!) but I'm sure some of the experts will be along in the morning.



When I get an EV that _will_ be my battery as I would be able to charge from PV during the day, and I also divert spare power to the hot water tank. At the moment I'm exporting a fair bit every day.



My instinct is that battery technology (and prices) has not quite made it for domestic use where you are essentially at the retail end of the market. But I'll still look with interest on the responses you get.

Zarch

From doing the same umming and arhging over the past few months and fact finding.

https://forums.moneysavingexpert.com/discussion/5856064/quotes-and-install-questions

My summary.... ie where i'm at.

No matter what your usage patterns, general consensus is that batteries aren't currently cheap enough to pay for themselves. Especially when you can move to something like Octupus Agile (or other Economy 7 style tarrifs) for 6p per kWh through the night. I think its better to get the panels installed now (before the FIT goes) and think about batteries a few years down the line.

https://forums.moneysavingexpert.com/discussion/5568536/on-grid-domestic-battery-storage

Your quotes for solar install seem high, which in turn are making your payback calculations daunting. For info, i've just had a quote for 18 x 320w LG (5.760kWh) with full Solar Edge optimsers for £7300. Depending on amount of generated energy we use we should see that paid off between 8 and 10 years. With the current low FIT this is about as good as it can get methinks. Obviously, paying over the odds for the install means the years just increase. If you can get the install cheaper the years come down. From your calcs its looks like you clearly understand how all the payments work. :j

As you've rightly figured, us punters aren't going to get rich with Solar on the current FIT, at least in the short term. Obviously as the FIT is paid for 20 years there is scope to double your investment over that period. Which is more than can be said for leaving it in the bank. But we're playing the long game. And with EV cars and batteries likely to drop in price, the more Solar you can get on the roof at install is probably the best course of action.

https://forums.moneysavingexpert.com/discussion/5871410/the-pros-and-cons-of-an-over-spec-pv-install-ie-going-large

Do you plan to stay in the property for the next 10-15 years? As its years 10-20 that you'll start to turn a profit? Another thing to consider I suppose?

Really i'd get some more quotes and continue throwing ideas around. Not sure whereabouts you are in the country. If you post up maybe people can give you some suggestions for local installers.

Hope this helps.

MrSugarfr33

Thanks for the feedback, £7,300 is miles better than any other quote I had, I was quoted £9,300 without the optimisers for the very same 18 x 320W LG panels, that's £2,000 more. I am in Kent and the quotes I had so far are from Fuel Included (that's the one with Pylontech batteries), then 2 Tesla Powerwall 2 authorised installers which were Spirit Energy and Kent-based The Little Green Energy Company. With £7,300, that's almost £3k less. May I ask which company quoted you £7,300?

Zarch

http://www.ctsrenewables.co.uk/

The are based in the midlands, so not sure how far south they'd come.

Maybe some other regulars can recommend reputable installers closer to you?

NigeWick

If you buy a Tesla Powerwall 2, VAT is 20% if you have only the battery and 5% as part of a system. I already had 4kW so added two 300W panels to my system. Battery, panels & micro inverters, Zappi smart charger and installation came to just over £7,000.

I can afford to be an early adopter, and, will be living in this house until after the system has paid for itself. I would not take out a loan to buy as the time to payback would be too long for me in my circumstances.

When looking at solar systems, the latest super duper panels may not work out as cost effective as slightly older ones. That's why I went for the 300W and not higher wattage.

Martyn1981

NigeWick wrote: »

When looking at solar systems, the latest super duper panels may not work out as cost effective as slightly older ones. That's why I went for the 300W and not higher wattage.

@MrSugarfr33. Hiya and welcome. Nige raises a very important point. You should see the cost of installs falling per kWp as you go bigger, if you install more and more panels. But if you go bigger by choosing higher and higher efficiency panels, then that might make things more expensive. So you need to find the right balance.

The £5,200 for 3.6kWp isn't bad, but as you look to 300Wp+ panels it will get expensive. I'd also suggest that if someone has been out, then they may have a better idea on the max no of panels you can fit. perhaps somewhere about 4.8kWp and aim for £6k with haggling and shopping.

I think your post is spot on, you've certainly thought it through. As I read it, my thought was that the pylontech batt was too small for what you were considering and a PWII would be better - then you said that, so your reasoning and assumptions seem fine.

I too think the batt is too expensive for you. You would do well as your consumption is high, but a lower price for storage would be nice, and it actually might not pay back at current rates.

The VAT situation is a pain, but if you can get the batt for 15% less in a few years if prices start to fall then that helps, or if you can add some minor PV at the time to get the lower VAT.

I don't think you should chase the 15% VAT saving now, if the numbers don't look good anyway.

I'm a huge Solaredge fan, it really does do what it says on the tin ..... but .... if you don't have a shading issue, then gains will be small and you'd be better off just taking the lower cost today.

Regarding panel quality (as different to panel efficiency), it's hard to know if they are much different. A 290Wp panel should generate the same as any other 290Wp panel, and degradation is so low (hopefully) at around 0.5% or less pa, that it won't really matter. In 20-30 years we'll probably be swoping out our panels still generating 90% of their claims, to fit new panels that generate perhaps twice as much for the same size.

For an excellent guestimate of annual generation have a play with PVGIS, see section 5 of the PV FAQ's (link in autosig).

Martyn1981

Just a thought on batts. I've been watching lots of you-tube news and tech web sites and there seems to be a shortage of available batts as demand is ramping right up.

Tesla in particular have far more demand than they can meet with the Powerwalls. They are shipping loads of Powerwalls and Powerpacks to Puerto Rico, and are starting the 50,000 PWII virtual grid storage scheme in Australia.

Looking at this positively means that supply might be ramped up, and result in cost reductions.

Looking at this negatively (and possibly more likely) the increasing demand for Tesla batts from the stationary and automotive sides may well continue to outstrip the increases in production. I think they've said that for the next few years they expect to roll out as much stationary batteries each year as the sum of all batts from previous years.

I don't know?

ASavvyBuyer

Zarch wrote: »

My summary.... ie where i'm at.

No matter what your usage patterns, general consensus is that batteries aren't currently cheap enough to pay for themselves. Especially when you can move to something like Octupus Agile (or other Economy 7 style tarrifs) for 6p per kWh through the night. I think its better to get the panels installed now (before the FIT goes) and think about batteries a few years down the line.

https://forums.moneysavingexpert.com/discussion/5568536/on-grid-domestic-battery-storage

I too have been looking at the economics of getting battery storage, but the payback period is just too long. The most we could save is about £200 a year of our electric bill, but for that we would need a battery costing at least £4,000 (but likely a lot more). So a minimum of a 20 year payback period, with a battery only likely to last 10 years.

Another possibility I am thinking about is changing to an economy 7 type tariff to use through the winter months (when we have poor solar PV generation).

Then to put the immersion heater, washing machine, dishwasher and any other high wattage appliances on timers to work during the cheap rate.

However, it would depend on what the peak rates would be during the day to work out if it was worthwhile.

MrSugarfr33

@Martyn1981 Funny you should say that, out of 4 companies I spoke to, who hold the title of Tesla Authorised Installer, only one told me that have 4 batteries left in stock, other 3 could take my money (to keep VAT at 5%) and then install Powerwall when they have it in stock - October the earliest... That doesn't scream to me: prices are about to drop...

Nebs9999

Don't forget to take into account that your solar panels will produce more electricity in summer. For example my 4kw system will generate over 25kwh/day in summer on a nice day, but on an overcast winters day I am lucky if it generates 2kwh/day and even on a nice sunny january day it will give me 8kwh/day max.
As an aside, I have found the best use for mine is air-con. When do you need air con? When it's bright and sunny. When do you get the most from your solar panels?