Purchasing Solar Panels- Yes or No?

SpenDiscipline

My husband and I are considering taking advantage of an offer on solar panels that would enable us to save 36% off the normal cost of installation, through a group buying scheme organised by our Council. We have reviewed the scheme and sought advice on solar panels from independent experts, we feel this would be right for us. The environmental benefits are our main consideration, but so are the relative independence from the grid and the possibility of future savings (as they won't really materialize for a while yet). However, we don't currently have enough savings to purchase the panels, and are considering borrowing on our mortgage. We have no other debt than our mortgage, an excellent credit rating and we have a  current mortgage to value ratio of 56%, which would rise to 61% if we borrow. I have compared the costs of borrowing against our mortgage to the cost of taking a consumer loan, and I believe borrowing against the mortgage is the cheapest option overall. Taking into account the likely interest, the panels would break even in 13 1/2 years, 12 years if we did not have to borrow and pay interest. The installation would cost us an additional £280/year until then. I can't shake off a sense of discomfort at the thought of borrowing money for this. Does anyone have any advice for us? 

Gerry1

"Save x% off the normal price" should always be taken with a shedload of salt.  That's probably what they tell everyone, in the best double glazing tradition.

More importantly, how do you think you will be independent of the grid?  There aren't many weeks in the year when it doesn't get dark.

And do you never use more than 4kW or whatever is the peak output?  Even on the sunniest day, if you use just the tumble dryer and the washing machine at the same time (cross your fingers that the fridge and the freezer aren't also calling for energy), you'll no longer be self sufficient.

Have you factored in the cost of replacing the inverter when it goes phut?

[Deleted User]

What size of solar array are you considering? Do you have any shading which will reduce solar output unless you purchase SolarEdge? Have you taken into account SEG payments for any surplus that is exported to the Grid (note: most homes can only use 25 to 50% of the solar generated). How have you calculated your electricity savings per year?  VAT? Insurance backed installation? Panel and inverter warranties? Installer feedback?

I don’t require any answers. These are the types of questions that I got answers to before I installed PV solar earlier this year. I did my own research.

For what it is worth, I paid less than £1000 per kWp which included the cost of an in roof (rather than on roof ) mounting system.

Petriix

You need to provide actual details from the quote: the size (in kW or kWp), the cost, the expected yearly generation in kWh, the angle and orientation of your roof etc..

For reference a 4kWp array should cost less than £4,000. From my experience these council schemes don't actually give any real discount when compared to a competitive quote from a local installer although it will be cheaper than one of the ripoff bigger firms.

Without considering interest, a typical household will take 12-13 years to break even on a £4,000 4kWp array. This is based on using around 40% of your generation and getting SEG payments for the remaining 60%. With interest a say 2%, you're looking at adding another 2 years, although less if you overpay early.

Ectophile

If you want more independence from the grid, you need to install a battery.  That adds significantly to the price, and with an estimated 10 year life, it's borderline whether the battery would ever pay for itself.

Even then, the battery is only useful if it's a sunny day.  On a grey day, your panels may only generate enough to cover the base load in your house, leaving little or nothing to charge the battery.

[Deleted User]

Ectophile said:

If you want more independence from the grid, you need to install a battery.  That adds significantly to the price, and with an estimated 10 year life, it's borderline whether the battery would ever pay for itself.

Even then, the battery is only useful if it's a sunny day.  On a grey day, your panels may only generate enough to cover the base load in your house, leaving little or nothing to charge the battery.

I am not wishing to split hairs but the Powerwall 2 warranty is that the battery will retain 70% or more of its capacity at 10 years. Sonnen is offering a 20 year warranty on its domestic batteries. Batteries can also be cost saving on the dullest of days when there is little PV solar. My Powerwall2 tops up as required overnight at 5p/kWh. That said, domestic batteries do not make financial sense without solar.I calculated at 28 year break even point without solar. With solar, it is less than 20 years at today’s prices.

matelodave

A few years back when FIT was being paid by the government then fitting solar panels was a pretty good deal as you'd probably get a pay back after about 8-10 years and the FIT payments were guaranteed for up to 25 years. However now that you are on your own, any payments you get are much lower and not guaranteed then the payback period its a lot longer and may never be achieved. It's also possible that you might need to pay for a new inverter during the lifetime of the panels so it's a good idea to factor the cost into the equation.

Having to borrow money and paying interest makes the payback period even longer and if you add it to your mortgage, unless it's a fixed rate, you have no idea how much you might end up paying if interest rates increase in the long therm.. Also bear in mind that you may or may not move house over the next 10-15 years and so you may not realise the the value of the panels during the period of your tenure or even enhance the value of your property by having them fitted.

As others  have said, having solar panels will not make you independent of the grid. You generate most of your energy during the middle off the day in summer when it's difficult to use it all and very little in the winter when you use most. You need to do your sums very carefully as it's a very long therm commitment.

These are just my thoughts and it would be useful to get the views of those who have installed them recently and are therefore not getting any government FIT payments

Talldave

Ectophile said:

If you want more independence from the grid, you need to install a battery.  That adds significantly to the price, and with an estimated 10 year life, it's borderline whether the battery would ever pay for itself.

Even then, the battery is only useful if it's a sunny day.  On a grey day, your panels may only generate enough to cover the base load in your house, leaving little or nothing to charge the battery.

Independence is a subtle point. As I understand it,  without a battery installed, your panels will be useless in a power cut.

[Deleted User]

Talldave said:

Ectophile said:

If you want more independence from the grid, you need to install a battery.  That adds significantly to the price, and with an estimated 10 year life, it's borderline whether the battery would ever pay for itself.

Even then, the battery is only useful if it's a sunny day.  On a grey day, your panels may only generate enough to cover the base load in your house, leaving little or nothing to charge the battery.

Independence is a subtle point. As I understand it,  without a battery installed, your panels will be useless in a power cut.

True up to a point. In the event of a power cut, you are correct that all batteries have to be disconnected from the Grid in a timescale set out in the Regulations. However, batteries such as the Powerwall 2 now come with a Gateway option which allows the battery to power everything in the home up to 5kWs (single battery). The transfer of power is seamless. Other batteries come with a single 13 amp extension socket: ie, the house powers down but it would be possible to heat a kettle.

Ectophile

My system has a manual changeover between grid-tied and islanded mode.  So if there's a power cut, I have to crawl into the meter cupboard to turn a rotary switch.  That's not particularly helpful.  So far, I haven't managed to get to the switch before the power has come back on again.

Of course, most power cuts happen during storms, not on nice sunny days when the panels are generaying and the battery is full.

ElephantBoy57

I have 8 solar panels fitted in 2015, I get around £320 in FIT tariff payments per year from those 8 panels, my electric bill is low, but they certainly would not allow independence from the grid.

You would need numerous modern panels and maybe a wind turbine to be independent from the grid. Solar panels are good if you want to reduce your carbon footprint and they can save money in the long run. But since there is no longer any FIT panments, the return from solar panels is much reduced.