Solar panels Not worth the money

Alnat1

I need grid connection to sell excess generation and for when the sun doesn't shine. Quite happy to pay the standing charge.

21p per day SC doesn't seem too bad (Octopus Agile) and the export prices (Agile Outgoing) follow the market, so have been really high recently.

70sbudgie

I installed my panels post FiTs, but even with "just" a SEG, they are definitely one of my better investments. I calculated the annual return for the first year to be ~6%. And I am expecting this year to be much higher. I'm not someone who plays the stockmarket for big returns, so I am more than happy with my >6% annual return on my investment.

I have a few minor regrets with how I set up my system but have only recently found this forum. I wish I had found it becore installing my panels as I feel the advice on here would have helped me avoid those minor regrets. But it is not too late and I am still learning and tweaking.

QrizB

gorgeousme said:

You ARE a humorous lot! But seriously, I would like to now whether you feel it was worth it or not.

I can't imagine there's been anyone disappointed this past summer, when grid electricity has been 28p/kWh (almost double the long-term average price).

And with prices roughly doubling again from October, solar PV owners will soon be getting four years worth of payback in a single year.

If payback was originally expected to take fifteen years, if prices stay that high it will now only take four.

Illustrative example:

Imagine you fitted 4kWp of solar PV in early January 2021 for £5000 (not an unreasonable price at the time). You would have been given a projection that you would generate 4000kWh/yr, and of that you would use 1200kWh (replacing grid electricity at 15p/kWh, saving £180) and export the remaining 2800kWh for 5p/kWh (earning £140) for a total return of £320. Payback will take 16 years, to 2036.

2021 - as planned. Annual return £320. Breakeven date 2036.

2022 - grid electricity is now unexpectedly 28p/kWh, and export is 7.5p/kWh (I'm ignoring OOA for now). Annual return is £336 + £210 = £546. Breakeven date becomes 2031.

2023 - grid electricity rises again to 60p/kWh. Export is 10p/kWh. Annual return is £720 + £280 = £1000. Breakeven date is now 2026-ish.

Magnitio

gorgeousme said:

You ARE a humorous lot! But seriously, I would like to now whether you feel it was worth it or not.

As of today I've had solar for 7 months. It has saved me just over £1100 so far, which was the saving I expected after 12 months. So yes, it was worth it.

Alnat1

@Magnito and any others who will give their methods, wondering how you work out how much you're saving.

I can think of several different ways to compare and it seems whichever gives the biggest £ saving must be the "right" way? 

Magnitio

Alnat1 said:

@Magnito and any others who will give their methods, wondering how you work out how much you're saving.

I can think of several different ways to compare and it seems whichever gives the biggest £ saving must be the "right" way? 

I keep a spreadsheet and record some daily stats:

- yield from panels

- electricity consumed

- import (based on inverter readings)

- export (based on inverter readings)

- import according to Octopus

- export according to Octopus

- cost of import

- value of export

- value of electricity consumed

- amount saved = value of export + value of electricity consumed - cost of import

I get the cost of import and value of export from an app called Octopus Go Agile. This isn't perfect, so I adjust the figures when the Octopus bill comes in.

Only takes a couple of minutes to update each day. I spent my whole working career with spreadsheets, so now I've retired, what else is there to do!

The only challenging issue is what rate to use when calculating the value of the electricity that I have consumed. Currently I am using 30.83p/kWh as that is the tarrif I would have been on if I hadn't switched to Agile.

Sterlingtimes

My figures during the past 12 months are:

Generation 3,227 kWh

Export 888 kWh

Diversion 550 kWh

I will ignore the FIT payment for generation. At October 2022 tariffs, I would value this at £982 per annum.

The capital value of my system, if new, would be £6,400. Payback (disregarding inflation) would be 6.5 years if the October 2022 prices were to remain at current levels. The investment prices is better for people like us who are at home during daylight hours. No batteries deployed.

Martyn1981

If the World returns to normal, then hopefully this example will help.

My sister got a large install last Autumn, before all went crazy. She got 10.3kWp for ~£8k. That seemed very good at the time, but not exceptional, just the direction of travel which seemed to be more than £1k per kWp up to about 4 or 5kWp, and then less than £1k/kWp for bigger systems.

From that I worked out a cost of generation for her, from a very old spreadsheet I'd put together years ago, when it was a hot topic on here.

Folk may like or disagree with my method, but I think it's fair and reasonable, but certainly not perfect.

So I use a 25yr repayment mortgage method, in order to account for a cost of capital, even though in this case it came from short term savings. I applied 2% interest, though rates are now rising. I assumed degradation of 0.5%, but that's probably too high, and for simplicity, write the degradation off against any inflationary rises in leccy savings. I also added £1,200 at the 12yr mark for a replacement inverter (just in case).

From there I see what monthly payment is needed to bring the 'debt' to zero in 300 months (25yrs) and divide 12 payments by the annual generation to get a per kWh cost of generation.

It came out at about 4.79p/kWh. So in effect their savings are the unit price of import minus 4.79p. So as an example, if they pay 20p, then each unit of generation is saving them about 15p. The other good news is that their export rate is 6p, so they get paid more than the cost of generation.

[They could probably get a better export rate, but they locked in their deal in Autumn last year too, for 3yrs , before things went nuts, so they absolutely don't want to muck about with it.]


If this helps for the future, assuming some normality is restored, and PV install prices fall, then for a 5kWp system, generating 5,000kWh pa, and costing £6k (I assume that the impacts of inflation will prevent prices going much cheaper), would at 2% (use of own cash/savings) work out at roughly 7p/kWh.

And just to be clear, I'm not saying this is the right way to do it, just that finding a rough cost, and comparing it to the SEG, is a handy way of seeing if it effectively pays for itself, and then all import savings are the 'gravy'. So purely a peace of mind exercise.

gorgeousme

Thank you. So the consensus is positive then!  I will look into this a bit more now. 

70sbudgie

My calcs were a lot more basic than above (but reading this forum has inspired me to improve my calcs). I had Octopus Go before I got PV so had day and night readings. Obviously I wouldn't be able to replace all my day consumption with solar, but think I roughly halved it. Then I used the gen figures quoted by my installer. Gen - half day consumption gave me an export figure. Export kWhr x 5p, consumption x day rate (can't remember it now, perhaps 15p?). Gave me a total annual return of ~ 6%

At end of 1st year gen, I used inverter gen figures and Octopus export figures with the same calc and it came out pretty much as predicted ~ 6%. Since then the export (and import) rates went up and then I switched to Agile. When the children go back to school, I will be pulling together a much more comprehensive spreadsheet, so at the end of year 2 I will have more accurate information.