Why were the Dragons in the Den so surprised by solar PV?

by , Social Media Manager Energy & Home 1 August 2011
VN:F [1.9.22_1171]
4 - 1
avatar

Solar PV got an airing on Dragons’ Den last night, but given its growing popularity, I was surprised that the Dragons thought it was a new idea! So here’s a recap for the Dragons on solar and the Feed-in Tariff.

Dragons' Den c/o BBC

At last! Summer seems to have arrived and some are thinking about whether they can cash in on sunny days. There has been an increase of 400% in solar sales since this time last year as more people decide to invest in this new technology.

Perhaps it could only be a matter of time before a solar entrepreneur walked into the Dragons’ Den – and last night it finally happened. He explained how a fortune can be made by selling panels to homeowners looking to get cheaper bills, earn money via the government Feed-in-Tariff (FIT) scheme, and reduce their carbon footprint.

Deborah Meaden was keen to invest in the business mainly because she’d already invested in another – clearly she can spot a growing market! By the end of the pitch, tha Dragons were doing battle for the opportunity to invest in the idea.

Don’t be blinded by solar promises

No doubt some people will really benefit from it with cheaper bills, a lower carbon footprint, and the chance to earn money back from the FIT scheme. But I’m not sure the business warranted such unqualified love from our Dragons.

There are two types of solar technology – solar hot water or thermal and solar photovoltaic (solar PV). Solar thermal uses the sun’s energy to heat up a home’s hot water. Solar PV transforms energy from the sun into electricity that is used in our homes – this was what the entrepreneur was offering.

The systems are expensive – around £10-12,000 – but the government’s ‘Feed-in Tariff’ (FIT) scheme is helping people make money from solar PV (solar thermal is not eligible). It was this that had our Dragons reaching for the chequebooks. Why? FIT pays money to homeowners for generating electricity, at a premium rate, meaning that many are falling over themselves to have panels installed and get some of this cash.

How fit is the Feed-in Tariff?

This may seem like a win-win scenario but remember that this is not ‘free’ money. Everyone pays for FIT through their electricity bills, and the Government is going to review the level of tariffs from April 2012 onwards – a fact the Dragons would have been wise to ask about. Although panels installed this year won’t be affected, if the level of FIT drops next year then solar PV might not look like such a great investment, and sales of the systems could start to decrease.

A recent change to FIT meant that large-scale solar farms were no longer eligible for such high subsidies. We supported this change partly because the amount of subsidy needs to be kept under control. When many people are already struggling with their energy bills, it’s important that the Government has a clear idea of the impact of schemes such as FIT.

Shiny happy salespeople

You also need to watch out for companies making claims that can’t be backed up. Our undercover investigation into solar panels showed up some clear problems with misselling. Some of the solar PV salespeople offered discounts that were only valid for 24 hours, for example. We were also worried by quotes made by salespeople who were not qualified surveyors.

Of course, that’s not to say all salespeople are unscrupulous, but it is important to highlight that solar PV is a technology that will be relatively new to most people. Not only that, but the returns generated can vary greatly depending on the type of property you have, which way your roof faces, etc. Because of this it is really important to make sure that consumers aren’t blinded by sharp sales patter, ending up stuck in a deal that gives poor returns, or doesn’t live up to their expectations.

Sunday’s Dragons’ Den would have been a great opportunity to highlight the pros and cons of solar PV and encourage people to look around before buying. The fact is that although it looks like a good investment, the returns will vary greatly between households – and this could prove a problem for future sales, if the Dragons haven’t done their research.

We advise anyone who is looking to get solar PV to have a thorough look round and do their homework. Perhaps the next time a solar entrepreneur walks into the Den our Dragons won’t be so surprised by this ‘new idea’ that’s been around for a while…

56 comments

Add your comments

avatar

Anna @ Solatricity

It’s great to see Solar PV getting some air time and encouraging discussion out there about it. Obviously the Dragons just need to catch up a bit!

avatar

Moneyclams4u.com

I have solar panels installed in my house. Saving electricity/gas from heating water for 5mths of year is estimated to save me £400. Maintenance cost are roughly £500 per year. That is purely servicing. If you have a breakdown, these are expensive systems to fix.

Having had solar panels fitted for heating water, I hold the view they are not economically viable for the UK market. Med weather, different story.

avatar

Nikki Whiteman

Hi Moneyclaims – that’s a shame, although the sun is shining today so maybe you’ll have a bit more luck…?! I can see why our really poor summer this year would be even more frustrating for people with solar thermal panels. Your experience does reinforce how important it is to make sure that your property is right for solar – if anyone is thinking about it, make sure the company does a proper survey to give you estimates of the return.

Should also point out (for those who aren’t sure of the difference) that there is a big difference between solar PV and solar thermal – thermal heats the water (as in Moneyclaims’ example) and PV provides electricity that powers your home appliances. It was PV that the entrepreneur was talking about on Dragons’ Den, but if you’re interested in thermal, here’s our handy guide to solar thermal panels:

http://www.which.co.uk/environment-and-saving-energy/energy/guides/how-to-buy-solar-panels/solar-water-heating/

avatar

Family Man

Why on earth would you pay £500 a year to have a system serviced that saves you £400 a year? I am sure that better systems are available but even then the payback is way too long. Forget about Solar Water heating unless the RHI scheme looks attractive when introduced next year.

avatar

Moneyclaims4u.com

At moneyclaims4u.com we have issued proceedings against one builder who refused to ensure water tank fitted was compatible with the solar panels fitted. They eventually played ball before a judical decision was necessary.

My neighbour has had the PV panels fitted. He is 70. He reckons it will take 20 years to get his investment back through cost savings. Also, he has had problems getting paid for the electricity he has generated.

avatar

John Ward

I think the applicant on Dragons’ Den suggested that an income of £1600 p.a. [nett presumably and taking FIT plus savings through reduced supply from the grid] could be obtained from a 16-panel PV installation on a south-facing roof with all other factors being ideal. This struck me as being a very attractive estimate – but possibly too good to be true – and I could see how eager people would be to install PV. This is what excited the Dragons – while there are so few companies on this bandwagon installation remains very profitable – although I don’t think they asked what percentage of the installation cost was clear profit for the installer. With interest on savings currently at abysmal levels it looks like a no-brainer for anyone who has a spare £16,000 available to spend it on some roof panels and the inverter etc, sit back and watch the cash roll in [remembering to run the dishwasher, washing machine, and other high-load appliances, while the sun is shining of course]. So why are there so few roof panels going up? And why are new houses not orientated to catch the sun and fitted with PV panels as a matter of course? Obviously, the more energy fed into the grid from our roof-tops the lower the feed-in tariff is likely to fall each year, but equally the higher electricity prices rise in real terms the greater the value of the home-produced energy substituting for grid supplies. Will this balance out? People are being very cautious – not wanting to risk their savings and lose the flexibility of access to their money should an urgent necessity arise, not sure how it will affect their selling prospects if they wish to move house [at a stroke it cuts them out of the Buy-to-Let landlord market which is about the only 'sale of last resort' available today]. Will property with large south-facing roofs command a premium? Or will prospective purchasers be put off by the uncertainties and choose a house without panels instead? Indeed – how transferable is the feed-in contract? Unlike your savings, this might not be something for a rainy day.

avatar

Chris

I agree with some of your points.
£1600 per year feed in tarrif is optimistic, more like £1000 I think.
And yes the feed in tarrif will reduce as more systems get installed.
However some I’m not so much in agreement with.
There is no profit until your investment is paid back which might be 12 years plus, so hardly a “watch the money roll in no brainer”
And actually you’d be better off running the dish washer etc at night paying about 12p a Kwh rather than using the daytime 43p Kwh you could sell.

avatar

MrBeck

@Chris

FIT is paid on all generated electricity, whether you use it or feed it back to the grid,
the power you use can be valued at your tariff rate (11p in my case), and finally the power you export to the grid is valued at the wholesale rate (3.1p in my case).

So John is correct to run his high usage kit in the day time to use generated power. The FIT is paid anyway.

avatar

FINSBURYPARKER

Good Morning John.
______________________________________________________________
I think the applicant on Dragons’ Den suggested that an income of £1600 p.a. [nett presumably and taking FIT plus savings through reduced supply from the grid] could be obtained from a 16-panel PV installation on a south-facing roof with all other factors being ideal.
————————————————————————————
Is it possible that some of these ‘Dragons’ have a vested interest in Solar PV Panels?
…………………Just a thought, they seem to have a finger in every other pie!

Regards.

avatar

Family Man

Just signed up for a 16 panel 3.84KWp system. Roof is almost due south facing and I work from home. Cost is £13,100 and annual benefit works out at about £1600 per year. The company I choose was Which Local recommended and includes a survey of the roof structure and a 10year warranty. Installation starts in 2 weeks time. I am looking at an approximate Payback of @8 years but maybe even quicker if energy prices continue to rise (read something suggesting 60% increase by 2015). FIT is guaranteed for 25 years, index linked and tax free. Better than 12% per annum! Can’t think of a better investment. It’s even possible to take the FIT with you if you sell the house, Check the SAP calcualtion and the EST website calculator if you are worried about possible misselling. What are you waiting for?

avatar

Chris

Good luck Family man.
But I think the figures you’ve been given are a little optimistic.
Don’t think you’ll get to £1600 feed in per year.
I think the payback will be more like 10 to 12 years.
Don’t see, even with your figures how you make it a 12% return, you have to get your outlay back before there is any real return remember. Like money in the bank you can take out anytime? except you are locked in arn’t you?

But not wanting to rain on your parade you won’t do too badly over the 25 year life of the system, just not quite as well as the salesman has clearly convinced you.

avatar

Dave

Take the FIT with you if you sell the house? How does that work?

avatar

john_at_gen

Dave – personally I don’t think it does but we are having a debate about this at http://www.greenenergynet.com/communities/articles/solar-pv-sound-financial-investment (see discussion at bottom of page). We hope to come back with further clarification.

avatar

MrBeck

@Chris

“locked in”?

So no long term investments for you? Not everyone keeps all there investments in a deposit account.

avatar

MrBeck

@Chris

Sorry finger trouble, consider a continuation with my post above.

Lets compare investing in PV panels vs a conventional retirement investment.

I just checked the tables and £100k invested in an annuity (joint life, with RPI) pays less than £4000 per year. So I take some of my tax free (up to 25%) and use that to put PV panels on the roof. The income is RPIed and tax free and beats the crap out of the annuity return. Plus as a retiree you are at home in the day time using power so you get the best benefit of the panels.
This makes me think this is one of the best ways for someone retiring to invest the smaller chunks of pension money that must be crystalised with retirement.

Return on all of the conventional capital investments are very low, even on long term bonds (unless you want to buy Greek) and equity investments are currently in negative return.

Look at your pension arrangements and see what your options are at retirement.

avatar

Family Man

Got at least 6 years before I can retire and potentally up to 17 years but I had also came to the same conclusion. It makes perfect sense for somebody approaching retirement. Also did a stint as a pension trustee and investment returns and annuity rates were frequently discussed. Somehow, annuity rates discussions always caused a dark cloud to decend on the room!

avatar

john_at_gen

MrBeck – we’d agree. Our article “Is solar PV a sound financial investment?” (http://www.greenenergynet.com/communities/articles/solar-pv-sound-financial-investment) suggests that it is a decent option for retirees (for the reasons you state) with some key provisos about staying in your house for the next 20+ years and, unless you are passing your property on to family, it may not be ideal for those over 70-75 years old. This is a broad generalisation based on likely health and other potential financial commitments.

There are other investments that (based on AER) might compare if you move within the first 15 years of a solar PV project. Long-term investments on the stock exchange have offered somewhere near 10% annual returns (so could be comparable) and investments in property renovation like loft conversions and house extensions are (according to published research) also likely to be more lucrative as they add value to your house.

But 25 years is a long time and what seems like a good return right now may not be as attractive in 5 or 10 years time eg. if interest rates go up significantly.

The critical ‘unknowns’ with solar PV are:
(1) What will it do to the price of your house if you decide to sell it within the 25 year period? We don’t have enough evidence yet.
(2) What are your savings likely to be over 25 years? These are largely guesstimated by solar PV calculators. But right now there is widespread disagreement about how high energy prices may go and how fast they will get there! Some experts are saying one thing while the government is saying something quite different.

avatar

KYLIC

I suggest Family Man has his facts wrong!
To continue to get the FIT payments, it is necessary to continue to supply the Quarterly Readings from the ‘Output Meter.’
How many house purchasers will permit a vendor to invade their privacy every 13 weeks to read their output meter?
A 16 panel array should be able to produce 4KW per hour in optimum conditions however for some reasons some installations are deliberately ‘MUZZLED’ at 25% less than the stated capability. I wonder how this can be justified under the ‘Sale of Goods Act? KYLIC.

avatar

Damn Young

I plan to go on Dragon’s Den with my idea for a business collecting all the PV solar panels that will be blown off people’s roofs during storms. Remember 1986?

avatar

Family Man

Nice idea. The company I am using also include structural calculations for the weight of the panels and possible wind lift. Not all companies offer this so buyer beware.

avatar

MrBeck

Excellent point. Check your home insurance too. My Halifax policy covers PV panels but not many do.

avatar

Family Man

Already checked with my insurance company (Also Halifax). I will be covered.

avatar

Chris

I was interested in solar, both hot water and PV, so I did some research.
I found that when installed correctly on a south facing unobstructed roof both systems will indeed produce hot water and electricity respectively, so they do work.
However unless you install these systems purely to do your bit in reducing Co2 emmissions the economics need looking at very carefully.
Take PV generation of electricity. The average domestic installation will consist of an array rated at 2.5 Kw to 3.5 Kw, it will currently cost you around £10,000 to £12,000 and have an operational life of perhaps 25 years. The feed in tarrif at 43p or so per Kwh will net you a realistic income of circa £1000 per year tax free. So on the face of it the deal is you give me £12,000 and I’ll give you £1000 per year for 25 years. Doesn’t sound a bad deal but remember you are locked in for at least 12 years before you get your initial investment back, maybe a little less if you reinvest the £1000 feed in tarrif from year one. This compares reasonably with an alternative £12,000 investment but it’s not outstanding especially not with the “lock in”.
Most people with £12,000 to spare will probably be perhaps recently retired, and a 12 year payback coupled to a 25 year investment might not be something they will want to embark upon, but perhaps some will? Perhaps some will opt for more conventional investments?
As for the free installations being offered, well no £12,000 outlay, but no feed in tarrif either. You only get free electricity when the sun shines, the very time you won’t be needing much. So I see little advantage in these except perhaps for people using immersion hot water.

But what about solar hot water? Well, economically I don’t think this is very good at all. An installation will cost pergaps £3000 to £4000 and might provide all your hot water needs for 6 months of the year (maybe). So what are you saving? My natural gas combination boiler provides 6 months hot water for around £10 to £12 per month, say £70?
I make that a payback for solar hot water of around 42 years. Perhaps a few years less if gas prices continue to rise at the currently alarming rates but still a long long time. Conventional investment of your £3000 or £4000 will do much better.

My conclusions are Solar hot water is pointless but Solar PV might be a goer, however I’d like to see the up front cost reduce a lot more before I take the plunge. The numbers arn’t quite good enough just yet, perhaps in a year or two if the feed in tarrif remains at current levels.
And my last word is if you borrow to install the interest will put your whole deal well into the red, and I suspect that will also be the case if you go for the forthcoming the “green deal” loan scheme..

avatar

Damn Young

What about a nice cheap black water butt, in a sunny spot? Or perhaps one of those 5 metre black sewage pipes from B&Q, with the ends sealed up. Solar hot water doesn’t have to cost.

avatar

John MACMILLAN

Remember that in addition to the FIT you will receive income from selling any electricity you don’t use. I have seen panels on a grey February day generating electricity.

avatar

Family Man

Hi Chris,
You raise a good point about recovering your investment first before getting a real return. I will admit I hadn’t considered that in the calculation as I was looking at a 25 year investment and selling the system at a later date could still be an option for recovering some of the money (not without some problems I admit). With regard to the annual benefit of @£1600 (FIT + Personal use + feed into grid) and the payback period this is backed up by the EST website calculations. I didn’t just take the suppliers word for it, I got 3 quotes and checked all assumptions. However the EST website is also pessimistic because it works on SAP calculation instead of the more relevant PVGIS assumption. It also ignores the Index linking to RPI and potential increased energy costs in the future. Check it for yourself on the EST website.(http://www.energysavingtrust.org.uk/Generate-your-own-energy/Cashback-Calculator) Investment is £13,100, SAP value is 3161KWh/y

avatar

Chris

Family man, like I said good luck and I hope it works out for you.
I’m still however not convinced the FiT will provide the return you expect. Suppose it really depends on who’s crystal ball you believe in the most. I’m also not totally convinced the system will really have an operational life of 25 years, there are no existing examples to prove this. There is a school of thought that as the system gets older it will lose efficiency and that the inverter might need replacing after a much shorter time, perhaps 10 years (and that won’t be cheap), but who knows?
To be honest the only thing I am sure about is that you will find out over the next 25 years just how well your installed system really works, and how the economics pan out. I hope the concerns I have read about and that I’ve expressed here turn out to be unfounded.
I would agree with many other comments that an independant study needs to be conducted. This might go some way to confirm or deny all or at least some of the concerns the varying opinions we read about are giving rise to.

avatar

Family Man

Hi Chris,
Its true the system will slowly lose efficiency but PV panels all come with a guarantee of at least 80% of year 1 perfomance after 25 years. The basic technology has been understood for years so there should not be any surprises.You are also correct about the invertor may need replacing after @ 10 years. There is another Solar PV payback calculator at http://www.solarguide.co.uk/solar-pv-calculator . This one allows you to change assumptions about RPI, Energy price inflation, invertor life etc. Definately worth a look. I regularly visit Germany which has had a similar government program. Its impressive how many Solar PV systems are installed in Germany. If you are looking for a field trial there is plenty of evidence from Germany. Everything in life carries some risks. In the case of solar PV and the FIT, I have concluded the risk is minimal and the potential ROI is very good. As you say, only time will tell and whatever the outcome I am commited to it. Will post messages again when the system is installed and running.

avatar

john_at_gen

Chris,
On point 1, will the FiT provide the return, right now (in the early days of projects) many people are exceeding the yield expectations of their installers because the calculations installers do are pre-set by government. Actual yields are often better than expected. Solar PV panels have no moving parts making them a lot more robust than many other bits of kit. Our top tip is to get your solar PV modules from a recognised manufacturer that is likely to be around for the next 25 years so they can support the 25 year warranty. In terms of output they are not that much different – those in the industry use manufacturers that they trust and have been around for a long time. So pick your kit manufacturer with care – based on their likely longevity and the ease by which you can contact them – not necessarily their promised output and cost. Your installer should give you a choice and, if they don’t, then maybe they are not the right installer.

I think the main worry that many people raise is whether the UK Government would try and wriggle out of the commitment to honour these payments over 25 years in the way, as I understand, the Spanish government has done. FiT is paid by energy companies from revenue on our energy bills and the ‘big six’ energy companies are mandated to honour the 25 year term. It’s unclear what would happen if they tried to get out of this? We think it’s unlikely. However, as our Legal Guide to FiT (http://www.greenenergynet.com/anaerobic-digesters/articles/summarising-legal-guide-feed-tariff-scheme) highlights, there is no legislation in place to compensate people should this happen!

Point 2 about efficiency – yes, an efficiency loss is likely although there are things you can do to your panels to maintain them and minimise this annually. The solar calculator we like (http://www.solarguide.co.uk/solar-pv-calculator) builds in an efficiency loss over the 25 years of 80% over the lifetime of the project (you can change these parameters if you want which is why we like this calculator).

Point 3 – replacing the inverter. I have had a mixed response from engineers in the industry on this one. Some engineers say they should last this duration, others that they may only last 10 years, others that they certainly do malfunction but it’s more likely in the first few years than after that. I take from this a conservative attitude that it’s best to build in costs into your calculations for a replacement inverter. How much do they cost? It depends on your system but it could be as much as £1000. You should be offered an option to take out a 25 year warranty on the inverter malfunctioning. This is well worth considering. You can again build in a replacement inverter using custom settings on the SolarGuide calculator mentioned above.

Final point – always bear in mind that Germany is probably 10 years ahead of us and they have a huge number of installations based on the same technology. They also have rigorous test centres doing independent PV module testing. I think it’s fair to say they have a pretty strong reputation when it comes to product engineering – and their consumers are unlikely to tolerate poor quality products.

avatar

john_at_gen

We share many of these financial concerns – many of the technologies in a significant proportion of UK houses are going to break the ‘Golden Rule’ that the government is basing their flagship Green Deal policy on.

John Ward > We agree with your concerns and address them directly in our 2 articles – “Why would you not invest in solar PV” (http://www.greenenergynet.com/households/articles/when-does-solar-pv-not-make-sense) and “Is there a sound business case for solar PV”? (http://www.greenenergynet.com/communities/articles/solar-pv-sound-financial-investment)

We also try to answer Peter Jones’ question on Dragons Den about the potential size of the domestic PV market in Britain on our blog post – this is the one Chris couldn’t answer..
http://www.greenenergynet.com/blog/future-uk-solar-pv-market-answering-dragons

avatar

Chris

john_at_gen,
That’s because Chris doen’t know.
I’m not a market reasearcher.

avatar

John Ward

Thanks Chris for all your contributions which filled in the gaps in my knowledge and reasoning and made some very cogent points. And thanks also to John at Green Energy Net. I really think Which? should produce a detailed well-researched supplement on alternative energy to help those caught between trying to do the right thing for the planet while protecting their financial future, and bamboozling sales pitches from the installers [reminds me of the double-glazing industry in the sixties]. Something else I had not thought of, triggered by Chris’s comment on the re-investment of FIT receipts, is that my savings do at least supply a dribble of income which progressively compounds and is [virtually!] tangible. This would cease immediately I transferred the money to the roof-top but even at the low end of the income forecasts the FIT would cancel out my gas bill [our electricity consumption is so low and predominantly night-time and winter that the personal use factor would not make a huge difference]. If I thought I might continue living her for more than a few years, and if the south-facing section of the roof were big enough to take sixteen panels, and if I hadn’t just booked up a cruise holiday in the sun, I might be seriously tempted to make this investment.

avatar

john_at_gen

Independent, well-researched, financially sound reviews of alternative energy – mmm, couldn’t have said it better! We hope there’s a role for our new player – GreenEnergyNet.com – to treat this whole subject in depth with strong input from experts in the industry. Of course we are big Which? fans and publish links to most of their energy pieces too.

avatar

Dave

I got one of these, the biggest I could fit on my south facing roof. 4kW it is but it only cost 10500. Performance seems to be as advertised but getting a good price is also very important. A good deal at 15K is a much better deal at 10K?

avatar

Snowdin

One of my neighbours, an electronics consultant, tells me that he has researched solar panels and they aren’t very efficient at converting sunlight into electricity at the moment so he is holding off. In time they will become more efficient, and presumably smaller, and the prices are dropping – I think I read recently that prices dropped in China by 30% this year. The race to get in before the tariff reduces next year is a fallacy – with lower panel prices and increasing efficiency in converting I think it is unlikely that the overall percentage financial yield on purchase price will drop, even if the nominal feed in tariff price reduces.
The other issue is installation. According to a recent NHBC Building report the increased installation rate has also seen an increase in wind induced failures and rain penetration of the roof envelope due to our unique British climate. While there is regulation to ensure the panels are fit for purpose, there are currently no standards to regulate the mechanical installation on buildings to ensure they are resistant to wind and rain! nhbcfoundation.org has produced a booklet about the problem and what it considers to be best practice but I think you have to be a professional to look at it.

avatar

Family Man

I also work in the electronics Industry for as company that makes silicon chips including products for solar panels (although I am not directly involved in this part of the business). I have a degree in Physics & Electronics. The panels themselves may become slightly cheaper year on year due to improved manufacturing and production volume but I would expect an average of @5% per year althoiugh some years may be better depending on Silicon wafer production utilization rates in the Billion dollar factories. The efficiency of the panels is governed by the laws of physics. Currently they are limited to @14-15% efficiency with relatively minor improvements year on year. Scientists and Engineers are working on techniques to increase the effective active area at a microscopic level by creating a cone like structure inside the silicon wafers . One report suggested that this could yield up to 80% efficiency. However, I think there may be potential problems with heat dissipation so it could be IMHO at least 5 years before we see such a “quantum leap” in efficiency. Another area of improvement could be in invertor efficiency due to improved high voltage switching transistors and control circuits. This is more tangible and realistic in the short term but again will only yield a few percentage points each year. So yes, you are right the systems will get better but don’t forget the technology has already been around for some time so I would not expect massive overnight advances. If you install a system now you could also look at upgrading the panels and invertors in the future depending on the economic arguements at the time. In the meantime my energy company anounced gas and electricity price rises this week so I am not waiting. System installation starts next week!.
Very interesting point about installation and wind induced failures and rain penetration. My installer does a roof survey. We have discussed wind lift and loading but rain penetration was not discussed. I will ask them about it.

avatar

Colin Grave

One of the problems with many of your posts is that the comments are from people who have theories about solar PV and no real life experience, not surprising as this is a new technology.
I had a 3.88kw solar PV system installed on my south facing roof last December and so far have detailed performance figures for the first 7 months of 2011. I also have taken my gas and electricity meter readings, and now my PV meter readings, almost on a daily basis since 2008. My spreadsheet is used not only to calculate how much the FIT is generating me in KWh and income but also to calculate how much KWh in both electricity and gas I am saving over previous years, and what the value of those savings are at today’s energy prices.
During the summer months we use a specially designed immersion heater to heat our water using electricity rather than our gas boiler. We pay particular attention to using our main electrical appliances during daylight hours to use as much PV energy as possible and we try not to have more than one energy guzzler in use at a time. We use a monitor linked to our inverter to show us in real time how much PV energy is being produced so we rarely exceed this in consumption.
In 2010 we used an average of £36 per month in electricity, but this has now reduced to an average of £17.50. For the last 3 months we have spent less than £5 per month on gas, with an overall monthly average of £29.50.
Taking the savings I have made in KWh over the same months last year and adding that to the FIT payments I have generated I am tracking at a benefit of £1470 for the first 7 months of 2011, which is a very encouraging figure so far, but we have to bear in mind that the weather for 2011 has been exceptionally good with record breaking months in March and April.
You also have to bear in mind that there is always someone in at our home to take advantage of daylight hours. A family who are all at work during the day would not be able to take advantage of sunny periods in the same way, and probably using timers to set appliances off during daylight would be the only way possible, similar to how some people use cheap rate night time electricity.
Nevertheless, in our case the claims on Dragon’s Den of £1600 benefit per year seem to be easily achievable.

avatar

Family Man

Hi Colin,
Great to see somebody confirming the real life situation which seems to be very much in line with expectations. Maybe even better! My installation start next week. Was very interested in your comment about a specially designed Imersion heater. Can you supply more info and product/manufacturer links? I also work from home and will be able to monitor the energy usage.

avatar

pvsolaruk

If you are still unconvinced by the investment in a PV Solar system. Here’s some real statisitics over a one year period from a house in Abingdon, Oxfordshire. (Solar panels installed by PV Solar UK).

18 Panels (3.15kW)

Full year results (August 2010 to July 2011)

Kilowatts generated
Month Per month Cumulative
August ‘10 276 884
September 225 1109
October 184 1293
November 86 1379
December ’10 37 1416
January ’2011 71 1487
February 76 1563
March 280 1843
April 380 2223
May 379 2602
June 341 2943
July ‘11 349 3292

Payment for generation with 50% sold to grid (August 2010 to July 2011)
£1155

Electricity Bill
The electricity bill was less for the year when the PV panels were installed compared with the same period the previous year (August to July).

£ kW
Elect bill old £821 7133
Elect bill new £649 5452
Reduction £172 1681
Reduction % 20.95% 23.57%

Total income plus saving £ 1327 (Capital cost £13,500) or 9.83% Return on Investment

avatar

SolarBowler

Well, what can you expect from the quaint old folk at the BBC? To their Dragons Den their panel members bring only paper money; at Top Gear they put electric cars in the hands of petrolheads.

I am 85 and grew up learning about electricity with my Dad and in the WAAF. I have had solar water heating since 2006 and PV electricity since 1st July 2011. To date, my 3.9 kWp PV array of 18 panels has generated 615 kWh of electricity, of which more than half has been fed back onto the grid. The Feed In Tariff Scheme guarantees me (infation proof and tax free) 43.4p per kWh generated (roughly £260 to date) and 3p per kWh fed to the grid (£9.15). That’s over £9 a day. On those figures the pay-back time for the cost of installation is going to be no more than the 5 to 6 years quoted to me. On the figures quoted to me in 2008 by npower it was 20 years.

To install the PV, I employed a firm with thirty years experience in electrical work and over 10 in PV. I found them by using the Government’s advisory service, the Energy Saving Trust, and the internet. I interviewed four others as well. Anyone who has a south facing roof, clear of obstructions and shadows, should download the EST’s pdf’s pdq.

avatar

colin grave

Hi Family Man
I bought my immersion heater element from H D Howden Ltd, http://www.howden-electroheating.com
Tel No 01698 573100. It is 27 inches long and uses 1kw of power, though I believe it is more like 1.25kw. The reason I wanted such a low power output is so that I can leave it switched on for long periods without it ever exceeding the output of the PV panels, otherwise I would be paying for the electricity. It has been sunny enough to use it since the beginning of April and so far I estimate to have saved £75 in gas charges by heating water with PV electricity. Therefore I have just got back my original investment in 4 months. I may get another 3 months use this year before the sun isn’t bright enough to guarantee continued use. My gas bill for the whole of June was only £1.81. It takes roughly 5 hours to heat the hot water tank from cold to 85 Centigrade. The high temperature ensures the water may last 2 of us for 2 days.

avatar

Trevor Bell MD AES

We are an MCS accredited installed who installed solar PV on our own roof earlier this year with the system being commissioned on 21/02/11. According to the Government SAP calculation our 3.68kW array should produce an annual yield of 2747kW per year. Providing the survey has been carried out correctly and we don’t have an atrocious summer this figure should be conservative as there is a 20% safety factor built into the SAP calculation and our office is in the South of England where solar radiation figures are higher than the average for the UK as used in the SAP calculation. As of today 08/08/11 our total generation meter read reads 2267kW which puts us on target to comfortably exceed the Governments SAP figure, which is exactly what I would expect due to the reasons stated above and the fact that the weather this year has been particularly good!
The property does need to be correctly surveyed as orientation is important, but, shading of any part of the array can be seriously detrimental to the performance of the system. All the equipment used does need to be on the MCS approved list in order to receive the FIT but it is important to correctly match the inverter to the panels in order to achieve the maximum yield. If the roof renters, who will fit a system for free, are prepared to fit a system on your roof then the chances are your roof is suitable as those companies are looking for a maximum return on their investment and unless you are at home all day the benefits to you are minimal. Be sure to use a company which has been around a significant number of years and already operates within the field of renewable energy and do not be sucked in by equipment manufactured by household names as they don’t always make the best solar PV panels.
On a final note the only difference between a 245W panel with a 12% efficiency and one with a 19% efficiency is the size and the price. They both produce 245W at the same test condition but the 19% efficient panel is physically smaller but costs more so if size is not critical then don’t pay the extra money!

avatar

Bernie

Had a solar panel on my touring caravan for years.Never have to go on electric hook ups

avatar

Family Man

Solar PV Installation started today. Also received a letter from e.on today. My gas and electricity prices are going up by 19% from September. Looks like yet another positive arguement in favour of the investment!

avatar

JohnC

If you have the spare cash sitting in a ISA or other savings that you do not require to draw on I cannot see a downside to installation on a suitable property.
I have just ordered a 3.42KW system (under £12k) and using the government website figures I will recover the outlay in 8 years with a return of around 8.5% tax free over 25 years. At my age (57) providing the rules are not reneged on I will at least get some contribution to my pension.
The company has guarranteed the inverter for 10 years so I need to start putting some money aside at about year 8. They consider inverter prices will fall but this could be a salespitch.
In another instance a year or two back an insurance matured and my pension advisor suggested paying into the company pension. This was very tax efficient but unfortunately with the current economic situation I may as well have spent the money down the pub as it appears the more I pay into a pension the more it appears to maintain static growth.
The bottom line is that it will only be suitable for certain people who are fortunate enough to have surplus funds available and willing to spread their capital.
At least there is some tangable asset at the end unlike pensions.

avatar

Family Man

Hi JohnC,
Try feeding in the numbers for your system into this caculator: http://www.solarguide.co.uk/solar-pv-calculator?sc_form_type=3#factors
I think you will be pleasantly surprised with the impact of energy price rises and the effect of RPI increases. Here are the results I got for my system which was installed this week. Payback Time: 7y 5m
Total Profit Over 25 years: £ 48,818.32 14.46 % per year (6.12% AER)

avatar

john_at_gen

We would suggest some caution using the default settings of http://www.solarguide.co.uk to calculate your returns. While we like this calculator (compared with others out there) but we would suggest tweaking its parameters as follows:
(1) A more conservative 3% annual increase in electricity prices (which is still higher than UK government projections) – if you leave it at 9% then price per unit gets to 110p in 25 years time which we believe is highly unlikely.
(2) A 13 year lifespan for your inverter – this means you are factoring in a replacement over the 25 year period.
This will significantly change your anticipated returns.
You should also bear in mind that your output will vary depending on your location so Glasgow will typically generate 13% less than Bristol according to estimates on http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php.

John (www.greenenergynet.com)

avatar

Phil

There seems to be a lot of misinformation and misunderstanding of the FIT scheme in the threads on this site. For clarity, on a solar PV system of up to 4kW you will receive 43.3p per unit of electricity generated regardless of whether you are going to feed the elctricity into the grid or use it in your home.. You will receive a further payment 3.1 pence for every unit of electricity you decide to sell to the grid. You can choose to declare that you will use all or a proportion of the electricity you generate in your own home and in this instance you will not receive the 3.1p per unit but instead save on average 13p.(based on the average cost aid by UK consumers).
A 4kW system in a fully south facing aspect can generate 3420 units of electricity per annum at peak. Therefore the maximum generation payment would be 3420 x 43.4 pence = £1480.86 per annum. The sale of this electricty would generate 3400 x 3.1 pence = £106.02 or alternatively if you use all of the electricty yourself you would save 3420 x 13 pence £444.60 off your annual electricity bill. The decision is whether you sell all the electricity or a proportion of it and you can really only decide this once you establish how much electricity you use during the day ie when the system is generating. You can adjust your usage accordingly to ensure all high drain equiment like washing machines, tumble driers, dishwashers etc are used during the day. The critical thing to remember is that the figures are expressed for a system operating at peak. No system will operate at peak all the time.
Hope that clarifies the basis of the FIT scheme.
Maintenance costs for a solar PV system of 4kW are around £100 pa.

avatar

Family Man

Phil,
In practice you do not get to choose if you sell the electricity to the grid or not. In most cases you do not get an export meter installed so there is no way of measuring it. Typically the energy company assumes by default that 50% is exported and pays you accordingly. Best option is (as you say) to use as much of the electricity during the day as you can by running appliances/ garden tools etc. If you can use more than 50% (Difficult in practice) you can in theory even get money twice for anything over the 50% that you use. My system is 3.92 WKp. Been installed now for 19 days and has generated 217KWh in mostly cloudy conditions according to the generation meter. Income so far should be £97.32 but I have also used a good proportion of the electricity (I work from home and have been using the domestic appliances as well during daylight hours) so I have also saved on my electricity bill (Too early to say how much yet). Please can you explain what are the £100 pa maintenance costs you refer to? I cannot understand where you get this figure from?

@Familyman

I suspect that the £100/year maintenance covers a sinking fund for inverter replacement during the life of the system. I have included this cost in my calculations on the recommendation of my installer. I’ve not been advised of any operational maintenance requirement.

avatar

Tony Orchard

I am 90 years old and fortunately foresaw that to invest in solar electricity would be stupid for me as I would never live long enough to enjoy the ultimate 25 year long benefit. Furthermore as my electricity bill is only about £400 p.a. I would only save about £150 p.a. at the most out of a £15000 cost for a 15 panel 3+kw installation. All my capital would go to the people who bought my house and they would be laughing all the way to the bank.
Had my Capital been credited to my estate instead of the freehold house, I would have had it fitted six months ago.
End

avatar

Pete england

You are right, the pay back for a pv solar uk system is between 7 and 10 years depending on the direction of your roof and where it is situated in the uk. However, you could rent you home out but still receive the fit payment. It could pay something towards the cost of your retirement home place for the next 25 years. Enjoy the future years ahead.

avatar

go solar now ltd

Before anyone gets suspicious, yes we do install solar pv panels!

There are a lot of benefits with solar pv – there are also a lot of crazy claims by some firms. There is some free electricity – but only if you’re using it in the day when the panels are producing power.

The major benefit is through the Feed In Tariff. On systems we have installed and checked later, we find they are over-performing very slightly based on SAP 2009 calculations. This real-life evidence seems to be supported by numerous posts above – the only doubters left seem to be people who have not studied the evidence now coming back.

If you intend to move house soon or you have an unsuitable building, don’t install a pv system (although it may help your house sell quicker?).

If you still don’t trust the evidence from thousands of installations, don’t have a system installed.

If it’s right for you, then do it – all the evidence suggests the claims made by reputable companies operating within the REA code are correct.

avatar

nrobinson

I am very concerned about the Government slashing FIT for solar PV, and with an implementation date of 12 December 2011, when the consultation on the changes doesn’t end until 23 December 2011. And all the indications had been that this would not come until Q2 2012.
Whilst I agree the incentive needs reviewing, the lead time they are giving the implementation, and the fact that they will implemented before the consultation has finished, I think is an extremely concerning precedent to set.
The details of the proposal are here:
http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/feedin_tariff/fits_review/fits_review.aspx
Which also links to a consultation response page.
It would seem the move is being introduced to at least try to stop rent-a-roof companies profiteering. However it is also penalising the home owner that is looking to improve energy efficiency. And I would say to the dissenters that say it is only the rich that are profiting, and doing so from taxpayers coffers, that if the UK Government does not meet its CO2 reduction and renewable energy targets by the relevant dates, then the penalties of these failures will cost all taxpayers far more than the incentives from this scheme are/will cost.
A petition to only make changes to reduce FIT for new rent-a-roof schemes has been set up:
http://epetitions.direct.gov.uk/petitions/20672
But I’m not sure if this is the answer, nor if based on the implementation prior close of consultation and legal ratification, any petition will have any impact on these changes.
Cheers,

Nik.

avatar

Family Man

Had the panels for almost 5 months now so here are some additional comments:
Performance is at least 10% above expectations (SAP) for August-Dec. This may just be due to unusually good weather conditions but my calculated payback period is definately on track and even looks like it could come in sooner than expected. Had some heavy winds too with no problems. No rainwater coming in the loft either. Been using the large white goods during the day whenever possible and have measured the electricity. Our bill is down 30-38% each month. Very happy with the decision to invest in Solar PV.

avatar

Family Man

Had the panels for almost 9 months now. I have monitored the performance and can say that it is more than just on track. Electricity savings are in the range of @38% per month. So far I they have generated over 2.3MW with effective revenue over £1000 and the summer is just around the corner.
No problems so far with high winds and rain does seem to more or less keep the panels clean of bird droppings. Still happy with the decision!

Back to top

Post a Comment

Commenting guidelines

Your email is never published nor shared. Required fields are marked

Tired of typing your name and email? Why not register.

Register or Log in

Browse by Category

Consumer Rights

712 Conversations

8653 Participants

24535 Comments

Energy & Home

594 Conversations

6430 Participants

20971 Comments

Money

761 Conversations

5575 Participants

14310 Comments

Technology

730 Conversations

6760 Participants

17445 Comments

Transport & Travel

567 Conversations

4332 Participants

12307 Comments