Solar PV - does payback/breakeven matter?

bluelycra

new to the board. first, i will love solar installer recommendations. we are in Bucks. i got a quote from Wallop Energy and Glowgreen and they seem to be okay but both quoted based on satellite photographs. none of them did an in-person survey. is that normal?

now onto the main question -

we consume approx 5k kwh of electricity annually and are thinking of getting a solar PV installation for obvious reasons.  panels + battery. we think we might end up spending anywhere from 7k to 12k depending on how complicated we want the system to be.

i have seen payback and ROI calculations just about anywhere and i keep wondering why that matters? isn't this a sunk cost like getting an extension done (which is far more expensive) or getting kitchens ... and given the state of the housing market and the energy market, don't PV installations add to home value? afaik the jury is out on whether they reduce home value.

will appreciate comments.

ed110220

bluelycra said:

new to the board. first, i will love solar installer recommendations. we are in Bucks. i got a quote from Wallop Energy and Glowgreen and they seem to be okay but both quoted based on satellite photographs. none of them did an in-person survey. is that normal?

now onto the main question -

we consume approx 5k kwh of electricity annually and are thinking of getting a solar PV installation for obvious reasons.  panels + battery. we think we might end up spending anywhere from 7k to 12k depending on how complicated we want the system to be.

i have seen payback and ROI calculations just about anywhere and i keep wondering why that matters? isn't this a sunk cost like getting an extension done (which is far more expensive) or getting kitchens ... and given the state of the housing market and the energy market, don't PV installations add to home value? afaik the jury is out on whether they reduce home value.

will appreciate comments.

I guess it depends how much you value protecting/helping the environment. Many people would pay a little more to do the "green" thing, but not a lot more. If you view it like that, then it seems like a reasonable thing to do even if the ROI isn't great as long as it isn't wildly uneconomic.

Something like an extension is different as it has a clear, immediate benefit to the person involved rather than being a public good. Eg an extra bedroom that you didn't have before.

Now the average domestic PV array is in the low thousands, about 1.5% of the value of an average house and often a lot less, I think it's going to get lost as a rounding error in house values. 

QrizB

bluelycra said:

i have seen payback and ROI calculations just about anywhere and i keep wondering why that matters? isn't this a sunk cost like getting an extension done (which is far more expensive) or getting kitchens

Most people don't have £12k lying around to blow on tat (or on blow, for that matter) and would like to know that they're going to get something for their money.

Money invested in a passive tracker fund is likely to have a better 25-year ROI than solar PV does.

Exiled_Tyke

It's a sunk cost only after you've made the investment then frankly it is too late. 

Experience shows that PV does not add value to house prices. 

Both payback and ROI are terrible tools for investment decisions.  Happy to go further but it gets boringly technical. 

If you want to a) do what is right for the environment and b) lock in a little bit of certainty on electricity prices (i.e. not presume you will make a killing with current prices but just accept the price you can guarantee now with PV) then go ahead.  As QrizB quite rightly implies, if you see it as purely investment then it's not right for you. 

ispookie666

Yes and No. 
Our first system has paid back in 7 years.  Thanks to FIT, iBoost and reduced consumption.  
The current system might never pay back.  I'm planning to add more panels and another battery, so that there is generation throughout the day.  I'm considering this as a hedge against rising energy prices.  
Our govt does not seem have any sensible long term plan for energy security and a minimal shock to the market seems to make the price of everything go up!  

bluelycra

Exiled_Tyke said:

It's a sunk cost only after you've made the investment then frankly it is too late. 

Experience shows that PV does not add value to house prices. 

Both payback and ROI are terrible tools for investment decisions.  Happy to go further but it gets boringly technical. 

If you want to a) do what is right for the environment and b) lock in a little bit of certainty on electricity prices (i.e. not presume you will make a killing with current prices but just accept the price you can guarantee now with PV) then go ahead.  As QrizB quite rightly implies, if you see it as purely investment then it's not right for you. 

i don't see it as an investment ... i thought my q made that clear  . i see it as a sunk cost in a project that will be beneficial to us us in terms of lowering our elect costs. the money we put in will be written off by us.

flyinggoose

I suppose it depends on your reasons for having solar pv installed.

 

I'm having a 5kwp system installed soon with a Tesla Powerwall, my reason for getting this done is because I do not want to be at the mercy of wholesale prices and greedy companies who will make as much profit from you as possible, this particular battery (there's also two or three others) will allow me to isolate from the grid and be more independent from the circus that's going on.

Of course being completely energy independent is just a dream at the minute unless your usage is extremely low and even then you'd struggle, but just knowing that I'm not 100% dependent on these lot gives a good feeling of security.

So yeah, ROI? I expect to make atleast half back in about 15 years, but that'll be a really nice bonus, main aim like I say is to be more independent from crazy wholesale prices and greedy companies, neither of which you can control.

Ectophile

I think the ROI is an important consideration.  If you have some money that you could spend on the house, then it could be spent in many different ways.

You could improve the loft insulation, fit triple glazed windows, add external insulation, buy a heat pump, or whatever.  Any money you spend on one thing is money you don't have to spend on something else.

Thrugelmir

bluelycra said:

Exiled_Tyke said:

It's a sunk cost only after you've made the investment then frankly it is too late. 

Experience shows that PV does not add value to house prices. 

Both payback and ROI are terrible tools for investment decisions.  Happy to go further but it gets boringly technical. 

If you want to a) do what is right for the environment and b) lock in a little bit of certainty on electricity prices (i.e. not presume you will make a killing with current prices but just accept the price you can guarantee now with PV) then go ahead.  As QrizB quite rightly implies, if you see it as purely investment then it's not right for you. 

i don't see it as an investment ... i thought my q made that clear  . i see it as a sunk cost in a project that will be beneficial to us us in terms of lowering our elect costs. the money we put in will be written off by us.

Then there's the impact of the raw materials and energy consumed in the production that need to be considered, let alone ESG considerations. Going green is more than a tick box exercise. 

Spies

I calculated a 7 year ROI and I'll be honest, it did play a part in my decision.