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

Dragons' Den c/o BBC

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.

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…

Anna @ Solatricity says:
2 August 2011

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!

Moneyclams4u.com says:
2 August 2011

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.


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:


Family Man says:
3 August 2011

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.

Moneyclaims4u.com says:
2 August 2011

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.


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.


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.



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.

21 June 2012

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!


Family Man says:
2 August 2011

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?


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.

Dave says:
5 August 2011

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

john_at_gen says:
5 August 2011

Dave – personally I don’t think it does but we are having a debate about this at