Solar panel quote

Martyn1981

https://forums.moneysavingexpert.com/discussion/comment/82082030#Comment_82082030

But I thought you'd suggested a return on Gilts of ~6%? So a 7% loan interest rate (I see loans, at this scale, start at ~6%), isn't significantly different to the opportunity cost of capital you were using before in your calculations.

Quick calc, so great chance I got this wrong, but £10k at 7% over 20yrs on repayment basis, works out at about £950pa repayment. If the income from the PV exceeds £950pa, would that mean (tongue-in-cheek) a free PV system? And a green tech, cheaper loan/mortgage rate, may be possible. And potential for cheap to zero rate in the future if the Gov scheme comes about (edit - Apr 2027).

Newbie_John

Sure, but if we say his yearly return before was 13%, adding 7% loan takes it down to 6% and thats the gilts level - guaranteed for 15-30 years depending on which one we pick. With gilts they get free electricty for that period and dont lose capital (skipping inflation here as £10k will be worth £6k in 30 years but solar £0).

If all goes well, they use cheapest loan possible, export during Flux peak hours and these rates continue raisng as well as import rates, they dont move houses, battery, solar, inverters dont break and dont lose efficiency.. then it could work - but for such a long investment its getting very risky.

And as said earlier - as OP has no savings there is no gilts alternative here.

But there are so many other options that would work better - switching to Agile, getting small cheap plug in, getting solar only (paid with cash).. rather than jumping to deep water.

Martyn1981

https://forums.moneysavingexpert.com/discussion/comment/82082281#Comment_82082281

You are double counting. You can't charge 13% for 7% loan and 6% cost of capital for the alternative gilts investment, as the loan scenario doesn't have the cost of capital for the gilts investment.

So the 6% gilts scenario, and the 7% loan scenario, are actually very similar.

If I use your 13% income figure for the PV, then loan repayments are exceeded by £350 in year one, and more in year two as we overpay the loan and accelerate repayments due to falling interest. In that scenario the loan is repaid halfway through year 12, so a 'free' PV system

sajag83

i have £3000 cash what if i take a 0% purchase creditcard and pay rest uisng the card does that make financial sense

Newbie_John

Alright, sticking to numbers provided by @Screwdriva in his quote and being supported by GPT (btw it says its a really good quote :) ).

End results after 15 years:

Solar cash: £25650 + 15 year old system

T41F Gilt: £22635

Solar 7% loan: £5450 + 15 year old system

QrizB

Of course you don't have to pay 7% for your loan. MSEs best rates start at 5.9%

https://www.moneysavingexpert.com/loans/cheap-personal-loans/#7.5k

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/82082350#Comment_82082350

Unfortunately the gilts figure is irrelevant, because there is no cash to buy the gilts, the same applies to cash.

EricMears

https://forums.moneysavingexpert.com/discussion/comment/82082419#Comment_82082419

Or indeed it might be even cheaper if you can add the solar costs to your mortgage.

Screwdriva

https://forums.moneysavingexpert.com/discussion/comment/82082330#Comment_82082330

I am sorry that some of the background noise on this thread can be disorienting for people asking for help with their quotes. Can you confirm the following:

1. Who your mortgage provider is?
2. Assuming your system cost is £12.5K, that you plan to borrow £9.5K on a 0% interest credit card for 24 months?

sajag83

1. Who your mortgage provider is? HSBC
2. Assuming your system cost is £12.5K, that you plan to borrow £9.5K on a 0% interest credit card for 24 months? planning to pay 25% using 0% interest credit card to get section 75 and rest using personal loan and my £3000 cash