Does size matter?

ka7e

zxzxzx said:

Seems high.

When I said ‘a good installer’ in my post above, perhaps I should have added ‘local’. 

Maybe knock on a few doors near you that have had solar installed? Word of mouth is valuable imho.

I have a couple of recommendations for local installers after I asked around on a FB post, so I will be contacting them in the next few days!

ka7e

Have had a survey done and have been told they can only fit 4 standard panels, 3 portrait and 1 landscape layout. Apparently the available area is restricted by the presence of the soil stack/water overflow and the shared chimney plus needing 30cm clearance top and bottom of array. 

The quote still came in at an eye-watering £6200! 

QrizB

I guess we'd all be saying "no" at that price, and possibly not in a polite manner!

Screwdriva

QrizB said:

I guess we'd all be saying "no" at that price, and possibly not in a polite manner!

Indeed. Rogue is not the word. I'm positive that roof can take 5-6 panels and even with SolarEdge, the cost would be ~£4K

ka7e

A local installer has quoted for 4 x 505W panels (JA Solar JAM66S30) - £3600

I'm awaiting full specs, but much better than the previous quote!

QrizB

ka7e said:

A local installer has quoted for 4 x 505W panels (JA Solar JAM66S30) - £3600

I'm awaiting full specs, but much better than the previous quote!

That does sound more reasonable. Still not exactly cheap, but there is a floor to how low you can go due to the fixed costs of scaffolding etc.

ka7e

Panels up and running for 12 days now - they managed to fit 5 x 505w panels and final cost incl bird netting was £4439. So far it has generated 100kWh which is spot-on with the company's projections.  Just waiting for Octopus to install smart meters, which I understand may take a while!

1961Nick

Martyn1981 said:

Reed_Richards said:

I think a Return on Investment calculation assumes that the investment itself is redeemable for cash, which isn't the case for solar panels. 

If the solar panels cost £4k, and in 10 years they make you £5.5k but then your inverter fails and you have to buy a new one for £1k then you will have made £500 in 10 years.  If the new inverter runs for another 10 years then you will have made £6000 in 20 years.  That would be about the same as if you invested your £4000 at 4.69% annual interest and allowed the interest to compound over the 20 year span.

If you assume that the panels last 30 years with one more change of inverter then you would make £10.5k in 30 years.  That's equivalent to a rate of return of 4.62% compounded.

Of course, you can do better if you invest the money generated by the solar panels once you have paid off their initial cost.     

Hi. You are compounding the interest in the 4.69% example.

So you need to do the same for the £550 annual returns.

I used a simple spreadsheet, and only added 4.69% interest to the starting balance each year (so zero in yr 1). This gave me an end of year figure for yr10 of £6,818. So even with a new inverter at £1k, you'd 'make' £1,818 after 10yrs.

After 20yrs (with the £1k deduction at the end of yr10), I get a grand total £16,020.

After 30yrs (again a £1k deduction at the end of yr20), I get a grand total of £30,572. So an increase of £26.5k.

Of course, there's a very good chance I've mucked up the calcs, but it does look to be much higher than the £10.5k figure you gave.

[Note - I've assumed no residual value for the PV system, and invested annual returns/savings immediately, as the initial cost doesn't need to be paid off, before making annual returns for investment. That initial cost, is the opportunity cost, against which we are comparing the PV returns to the £4k invested in a simple growth fund.]

I stand by my calculations, over 20 or 30 years the return will be equivalent to investing the same £4000 at an annual interest rate of around 4.65%, compounded.  You'll do better if the lifespan of your inverter is 20 years rather than the 10 years I assumed.

For £4k at 4.65% compounded, I get a total of £9,928 after 20yrs or £15,640 after 30yrs.

For the PV investment, as previously explained, but with the earnings/savings invested at 4.65%, I get a total after 20yrs of £15,952, and after 30yrs of £30,362.

If the inverter is only replaced after the end of yr20, then I get £17,527 after 20yrs and £32,843 after 30yrs.


Edit - Bugging me whether (or not) we should account for the initial £4k or not. So for comparison, let's deduct it from the calcs to see how much was "made" on the £4k.

So the £4k invetsed at 4.65% compounded grows by £5,928 after 20yrs, and £11,640 after 30yrs.

Whilst after deducting the £4k investment from the PV earnings, it has earned £11,952 after 20yrs and £26,362 after 30yrs. [10yr inverter life example.]

Note - I'm building ever more, on top of earlier calcs, so any errors will now be significant.

The opportunity cost of installing solar was very low until a couple of years ago. I paid £4K in 2013 & reached break even (on the FIT) around 6 years later - obviously this would have been earlier if savings from using solar were included in the calculation. The opportunity cost of the £4K outlay was around £180 over that 6 year period. All the income I received from the FIT was paid directly into an ISA & the balance currently stands at £9067.

(I only have figures for savings from direct use of solar from Jan 2019 & that comes to £2410.)