Are the Middle East issues forcing Solar Considerations?

Gronk

Due to the current Middle East trouble, the future rising cost of Gas and Electricity doesn't look very promising does it?

I am in my late 70's, own my own house which has an unobstructed South facing roof so you will not be surprised to know that I am open to solar installation. Panels, Air source heat pump, Battery storage, the whole kit and caboodle.

The problem I have, given my age, is whether now would be a beneficial time to make the changes or am I simply too old to make it worthwhile.

My partner is very much against such an investment which would be in the region of £10-12,000 and sees it as a pointless exercise. Perhaps she is right, that's my dilemma.

What's the consensus out there?

Netexporter

Are you looking more to keep your energy cost down or to ensure continuity of supply if rolling blackouts become a thing? If the former, I'd hope you would see a return on your capital, but none of us know how long we will be around. If the latter, you'd need a gateway to isolate you from the grid in the event of a power failure and you could just have a battery and charge it on cheaper overnight rates, for use in the more expensive times. On the other hand, solar is relatively inexpensive, these days (although there may be a rush!), so you could be virtually self sufficient for about 8 months of the year.

Without a crystal ball it isn't easy to make a decision.

Magnitio

https://forums.moneysavingexpert.com/discussion/6660493/are-the-middle-east-issues-forcing-solar-considerations

You might struggle to get a consensus. If you live in the house long enough, you may get a return on the investment, but the payback time will depend a lot on the future cost of enery, which is unknown. However, you will massively reduce your carbon footprint and you will eventually pass that on to a new owner.

Vitor

You'll never see a payback, all things being equal.

Using Ofgem’s typical household figures, about 2,700 kWh electricity and 11,500 kWh gas costs roughly £1,641 a year. A 3.5 kWp solar PV system in England generates around 3,700 kWh annually and costs about £6,100. That can save roughly £600–£700 a year, so payback is about 9–11 years. An air-source heat pump costs around £11,000 installed, with a £7,500 Boiler Upgrade Scheme grant reducing this to about £3,500. Heat pump plus solar might save around £600 a year overall, giving a payback of roughly 16 years with the grant, or over 25 years without.

silverwhistle

If you don't get a pay back it will still reflect in the price of the property: today people are a lot more aware of the benefits than they were even a few years ago.

Would you consider a new kitchen, bathroom or decorating? No direct payback at all from them so if your partner suggests it you can easily quash the proposal. ;-)

QrizB

The Green & Ethical regulars will vigorously dispute Vitor's figures. Let me start.

A 3.5 kWp solar PV system in England … costs about £6,100.

A 3.6kWp system costs under £4k. Here's a 4kWp system for £3500. £6k should get you 6kWp.

That … generates around 3,700 kWh annually and … can save roughly £600–£700 a year.

That's a little on the high side for a 3.6kWp system, IMO. I'd expect no more than 3600kWh/yr in the South of England, less further north. Using 3600, and assuming 1200kWh consumed and replacing mains electricity at 25p/kWh (£300 saving) and 2400kWh exported at 12p/kWh (£288 earned) - total annual return £588.

so payback is about 9–11 years

Earning £588 pa on a £4k system is a ~seven-year ROI.

Heat pump plus solar might save around £600 a year overall

I agree that adding a heat pump might not directly save you any money, but whether you save with a heat pump depends entirely on (a) Coefficient of Performance and (b) relative prices of electricity and gas.

Reed_Richards

It's possible that any investment in "green" technologies might outlive you, although I hope not. But if it does, then the issue becomes one of whether it has enhanced the sale value of your house by a reasonable proportion of the money you spent. That's something that an Estate Agent might be able to advise on; but I don't think any Estate Agents frequent this board.

ka7e

I had solar panels installed 2 years ago (when I was 65), mainly to give me some fuel security - not too concerned about the ROI. Now considering getting a battery retrofitted for the same reason. Heat pump would require expensive and disruptive alterations to my CH system. My electricity bills have reduced by a third using 2024 figures and I earn £250+ selling excess back to the grid.

Ectophile

Solar and heat pump are not a particularly useful combination, unless the heat pump is the sort that also does air conditioning in the summer.

British winters aren't sunny, and you don't need the heat pump so much in the summer. Though you can use the solar for loads of hot water. A decent size solar installation will generate more electricity than you know what to do with in the spring and summer, and a miserable little amount in winter.

So maybe look at the two separately.

Heedtheadvice

My take is that it should be given serious consideration. I too am in my 70s and plumped for solar several years ago and have since added and increased battery storage. After adding an EV electricity now costs me less than I used to buy from the grid, use less energy and export some too helping my and the countries green credentials and the planet for my children and grandchildren future and less asthma etc from pollution.

Solar has already paid for itself.

Batteries were going to take about 10 years for return in investment but now with more storage a time of use tarrif ( having an EV) just 6 years....and storage costs have fallen considerably since then.

Heat pumps ( also enable time of use tariffs) can be cheap as in a post above but need to be costed with potential changes to the property's heating system. Not done that yet as on gas heating still but the way the world is that might change.

Is it worth it. In my opinion yes will be quids in I hope if I last another 10 years but glad to be more green in the meantime.

Martyn1981

https://forums.moneysavingexpert.com/discussion/6660493/are-the-middle-east-issues-forcing-solar-considerations

As a thought exercise, I personally think, that we shouldn't think just in terms of payback period. But I absolutely understand why it's important.

For yourself, as you say you are open to this, and putting aside green & ethical issues, though of course this is the G&E board, I'd suggest just thinking about the cost opportunity.

So, let's say you have £5k in the bank. I don't think we should compare to cash at hand accounts, if comparing to long term retention, with an eye to passing the money on. So perhaps we can say 5% return just for the purpose of a discussion. So that money is locked away, as an investment, and will earn you £250 pa. And for fun, let's say you use it to reduce your energy bill.

Now, let's say you lock that £5k up as a PV system, so again it's gone, maybe somebody's inheritance in the long term. But pessimistically, I'd suggest that could earn you £500 pa. Yes the cash 'is gone', but so is the cash invested long term to get a better rate of interest. And the PV will add to the property value.

So you are now £250pa better off (after deducting the opportunity cost of using that capital), so just thinking of it as an investment (£5k on your roof at 10%, v's £5k in the bank at 5%), it's a better use of your money.

Of course we can do this more properly, but even then, if instead of thinking in terms of payback, we think of a business investment, then the system hasn't cost you £5k, it's actually more correct to say it's costing you ~£250pa (by depreciating the capital investment over 20yrs(ish)). So you earn £500 (less costs (the largest being depreciation)) and end up earning ~£250pa, similar to investing the money financially.

Also need to ponder inflation, that cash investment of £5k is reducing due to index linking, whilst the PV earnings will hopefully stay current.

Apologies for the digression, but just wanted to say or suggest, that PV (or any other investment that reduces your costs). And can be seen as an alternative way of inveting your money, even if you're not sure that you (personally) will see it payback. As an extreme example, going back a decade, I used to point out that the best investment option for £5 was a low energy lightbulb. Each one had an approximate 100%pa interest rate, or a 1yr payback.

Back to reality, and given that you have a very PV friendly roof, I'd suggest that after shopping around that £5k example, would probably get you 6kWp+ of PV, and generate ~6,000kWh of leccy pa, if you aren't too far north. So even if it was all exported, that's currently about £700pa. Or if it say, reduces import by 2,000kWh at 25p and the rest exported, then maybe more like £900+. Which is probably a good/better way to invest your money for an annual income, v's £250?

[Note - We could discuss and debate the financial comparisons all day, month and maybe year. This is really meant more as a way to think of the monies invested, just in different potential ways, but still helping you live through retirement.]