/ Home & Energy

Will your solar panels bring sunshine to your savings?

Solar panels and sunflowers

If you were asked to find a tax-free investment, which could rise with inflation and save you money on your bills, would you look to your roof? Installing solar panels could do just that.

Since the launch of the government’s Feed-In Tariff (FIT) scheme in 2010, some 300,000 households have had solar panels installed. And those who have signed up to the scheme have also seen some very healthy returns.

You get paid for every unit of electricity you generate, in addition to the power you export back to the grid. And the more efficiently you use electricity in your home, the bigger the savings on your bills.

But as the cost of installing solar panels has fallen over the past two years, so have the rates you get paid for generating electricity and the length of the scheme. So, with a new round of cuts coming from 1 November, does pinning your investment hopes on the sunshine still make financial sense?

The generation game

Which? Money has done some number crunching, looking at forecasts for electricity price rises (at 2.6% a year) and for inflation (at 2.01% a year) over the next two decades. We assumed 50% of electricity generated is used in the home and 50% is exported back to the grid and combined the earnings from generation, export and bill savings into one big annual profit figure. To try and be as accurate as possible, we even factored in degradation in the quality of panels (at 0.7% a year) and their ability to produce electricity.

For a three kilowatt peak (kWp) solar panel system in Birmingham, we found that you could make a net profit of around £28,000 if you had installed panels in April last year, when the FIT was at its highest. This figure takes into account installation and maintenance costs of around £11,000.

That’s quite a tidy profit – you’d need to find a savings account paying 5.2% a year after tax to meet that kind of return.

But fast forward to August 2012 and the cuts in the FIT have really affected potential profits. Although panel costs have fallen (to around £7,500 for the 3kWp system according to the government), so have potential profits. That same system in Birmingham would only pay around £6,500 in profit over 20 years. If you’d simply put the money spent on panels (and maintenance) into a savings account, you’d only need around 3.4% a year to match – which is pretty achievable, even in this climate.

‘FIT’ for purpose

Installation costs for solar panels keep falling – the solar panel industry says that costs are quite a bit lower than the government’s figures, which could obviously boost your profits. And if electricity prices are higher than forecast – last year they rose by 4.7% – that could mean much higher savings in the future.

The real profit boost comes from reinvestment of revenues – we found that you could near double your profits if you reinvested all of your earnings into a tax-free cash Isa paying 4%.

Making the most from solar panels is dependent on a lot of factors, beyond the financials – mainly changing the way you use appliances, as well as the climate. I don’t think it’s fair to write the FIT off as an investment – but if you’re thinking about spending your savings on a solar panel system, it’s important to see whether they really are going to make financial sense.

Have you had solar panels installed – how are your returns shaping up? Has the current economic climate (or British weather!) put you off the scheme?

[UPDATE 16/10/2012] – When we carried out this study, our modelling used solar panel cost data from a report published by the Department of Energy and Climate Change (DECC) at the end of May 2012 – the latest DECC figures available when we went to press. The solar panel market can fluctuate significantly over short periods and since the publication of the DECC report, the cost of installing solar panels appears to have fallen dramatically. Falling installation costs could result in higher potential profits than those shown.

However, it is still important to compare potential future returns alongside the quotes for panels provided to you by an installer and weigh up the investment alongside other alternatives, such as the return you could get from a savings account.

Comments
Jim Kenney says:
8 March 2013

Bridge Coach. you must be pleased!
if it is of interest, Sheffield Uni do a lot of work on PV and have a database of around 2000 PV homeowners that show 98% of PV systems are generating as per predictions. I dont know if you can copy & paste this link:
http://www.shef.ac.uk/news/nr/microgen-sheffield-solar-farm-alastair-buckley-photovoltaic-1.223530

and if you want to join the database:
http://www.microgen-database.org.uk./home

Jim Kenney – thanks for the heads-up. My (daily) data contributions to the Sheffield project (URN 124) were started 20th July 2011.

I found it heartening that the generation graphs for so many people in the Midlands were almost identical – it demonstrates that no-one seems to have been ripped off.

Rob Roy says:
10 March 2013

Reply to Bridge Coach: Offsetting a mortgage adds an extra dimension to the calculations ..
I think the nearest “pure” comparison would be with an index-linked SIPP pension annuity lump sum investment, except that the tax relief is removed from the initial investment and transferred to the pay-outs. Seen against the ‘orrible level of annuities at present, even my modest presumed c. 11 – 12% annual return from a PV would seem to have some attractions.
The point is however that in this respect it is similar to the gamble you take with the annuity provider over life expectancy. Putting it bluntly, if you shell out on day 1 and snuff it a week, a month or anything less than 7 1/2 – 8 years later you lose out proportionately. At present tariff and cost levels you only really start to make a net gain in the longer term, 12 – 15 years. Seems to me that comparisons with nearly all other types of savings and investments, where there is access to and a payback of capital at some point, are totally misleading. (I would regard the effect on the value of the house as debateable, and over time declining. There are those who I hear would downgrade a PV house for aesthetic reasons!)
I will be very interested to examine the Sheffield Uni data and see what people are achieving from own generation. Has anyone come up with a “solar PV battery” which if feasible would have obvious attractions (whilst no doubt adding to the cost)?

Jack. says:
24 June 2013

Erm…pardon. What did you all say?

Our local electrical firm are pushing solar sales hard and I’ve not heard a bad word. I have oil for water and central heating and this firm says they have an interrupter system to feed directly into the immersion heater during the summer when normally we use oil. Does anybody have any opinions or facts on this twist please?

First of all, the “interrupter” system is totally unnecessary as any electricity you produce from your PV system will first go towards powering whatever electrical appliances you are using (INCLUDING your immersion heater) – whatever is left is exported to the grid. I think that if you were to install a 4kwh system, you would still only get a comparatively small proportion of your gain from electricity used by you. The major gain will still be from the FIT.

If your major concern is to provide hot water for usage & central heating, then you might consider the newer “Solar” heating system that is actually an air-driven heat pump which can be installed on your roof and plumbed to provide both hot water and heat for your central heating system. It has the advantage that, at air temperatures above freezing, it works whether there is any sunlight or not. (i.e. Summer AND Winter)

Jim Kenney says:
26 July 2013

I’m not usually a fan of these ‘interrupters’ when used with gas heating but when used with oil I’d say it would be a worthwhile investment as the cost/kWh is so much higher with oil, not to mention the reduction in hassle if you have less ‘fill-ups’. I’d suggest going for an ‘interrupter’ that senses the level of export and then modulates the immersion heater accordingly rather than a simple on/off device.

However, I would also suggest that a conventional solar thermal system would be better still if you have the roof area & funds at your disposal. it is miles better for the planet too, if you have environmental concerns.

with regards to a lot of the newer solar panel with heat pumps, often called solar thermodynamic panels, I wouldn’t touch them with a very long barge pole. Though if you are a which? member I guess you’d be savvy enough to recognise the type of sharks trying to sell them and stay well clear. Smoke & mirrors.

mike says:
8 February 2014

advice please
Although I have the required ‘D’ eco rating on my property it is an exposed position of the south coast and as such is not suitable for cavity wall insulation- apart from the fact that the cavity may not be wide enough to make it viable. (1937 build)
It is just off south facing and completely clear of any obstruction
I read that solar panels should only be considered after all other insulation has been done -i.e. cavity wall.
I would appreciate any views for or against please.

Jim Kenney says:
10 February 2014

Mike, I assume you mean D ‘EPC’ rather than ‘eco’ rating? The answer will depend on your objective; solar panels might pay the highest return – approx. £7k capital to return £950 back per year but if you don’t have £7k it may be immaterial. loft insulation is very important but if you have EPC D then it looks like your place is already pretty well insulated? but maybe £250 on increasing loft insulation would be well spent? Insulation is always a good thing for reducing heating bills but there isn’t the same financial incentive as there is for generating low carbon energy.
My only advice is to be wary of the ‘green deal’ – it is the green deal that says the order in which you should do things based on questionable assumptions made on your energy bills. If your EPC is a recent one you may have inadvertently had a green deal assessment carried out at the same time. and don’t forget that the green deal is an arrangement to lend you money at fairly high interest rates. I hope this helps?

Jim
many thanks. sorry for the delay but I have been away.
I will be paying cash and have been quoted £6,000 for a 16 panel 4 K installation.
I live on the south coast south facing unshaded.
My concern is that with just the two of us of frugal age!! we will not use much electricity as we are gas central heated/cooking.
Can we sell all that we do not use?
we have the option to heat our water by emersion heater- would that help?
Appreciate any views please.
Mike

Rob Roy says:
22 February 2014

Your situation has many similarities with my own, except that I was able to get my installation for around £5 K, but have to weigh this against lower sunshine generation in the North. My gut feel, in retrospect, is to take the technical hype with a large pinch of salt and regard cash-funded PV somewhere near the bottom of the list of priorities for savings investment, considering how many years it will be before you break even and the fact that your (my) money once spent is “gone”. Unless I have misunderstood the mechanics the vast bulk (not all) of the return comes from what the state pays you under the FIT scheme which is linked to what you generate not what you consume. Much less comes from a reduction in your energy consumption – but this depends on you having your emersion on when the sun is shining! [more logical would be to invest in air conditioning …]. There is a case for PV – but buyer beware!

Rob Roy:
Your comment about a “pay-back” period of 8-9 years is quite true; however, you, like many others have chosen to ignore the fact that using the “pay-back” scenario results in a COST-FREE rising income for the next 10-15 years.

PV, for me is (mainly) another income asset class in my investments – I put it at the same level as 25-year Income shares in a Split-Capital Investment Trust. As you know, with this type of investment, you would get a higher income for 25 years, but lose your capital.

If I amortise my PV investment over the 25 year period that the government guarantees my FIT, after allowing for a replacement Inverter about year 10 and inflation of 3%, the rate of return is 12.7% NET of tax – equivalent to a GROSS return of 15.9% for standard rate tax payers. I don’t know of any other almost risk-free investment that would provide a return anywhere near this.

Finally, if you cannot afford to lock up your capital in ANY specific investment (whether PV or a financial instrument of some kind) for the term of that investment, then it is not for you.

Rob Roy says:
22 February 2014

I think the idea of comparing PV with your split capital IT is a huge leap forward compared with the usual comparisons with instant access bank accounts and ISA’s. The nearest I got was to compare it with an annuity but with the tax relief removed.
Provided we compare like with like – “schemes” where you sink your initial investment in return for seeking better returns in the longer term (only) – then there is a case for PV, at least up to 23 / 25 (?) years. But in my view only as a fairly minor complementary part of one’s total savings portfolio once higher priority avenues have been fully exploited. Your quoted rate of return will vary hugely depending on the time period – if it was 15.9%, net, from year one then the combined British Military would be incapable of controlling the stampede!

Jim Kenney says:
24 February 2014

Mike.
£6k sounds like a bargain so I might suggest you check out the make of the PV panel & inverter to make sure the manufacturers are reputable – if you don’t know anyone in the industry to give advice it is quite easy to Google the makers name with the word ‘news’ to see if they are in financial problems. However, there are some real bargains available at the moment due to some unusual market conditions.
if you live on the south coast you should get a very good yield worth at least £1,000 year.
it is also clear that your PV supplier hasn’t explained the financial benefit very well else they should have explained clearer about selling back to the grid. The financial benefit is comprised of 3 elements:
1. You get the feed-in tariff for generating the electricity whether you use it or not. this is effectively a reward for producing low carbon energy. This is the largest part of the benefit.
2. You will also receive a smaller payment based on the assumption that 50% of the generated electricity will be exported back to the grid. this is assumed because it is too difficult to measure.
3. The 3rd (and last) benefit is that if you can use the energy then you will get a saving on your energy bill. This is where buying a gadget such as an iboost will make savings by diverting energy that would have been exported to the immersion heater. but don’t be mistaken that you can simply use the immersion without an iboost (or similar) as it will cost you money.
I hope this helps.

Rob Roy says:
14 February 2014

Before deciding to go solar I concluded that the only sensible financial comparison was with a pension (forget instant and limited access investment savings accounts) though even that has its limits (no up front tax relief); The following was published in last weekend’s FT and summarises some of the points:

“Solar panels can yield “8 per cent or more”, said the Dept for Energy and Climate Change.
The comparison has been largely dismissed by the pension providers, who noted that panels generate variable returns, do not come with tax relief or employer contributions, only enjoy subsidised “feed in” tariffs for 20 years, and are not portable.
Although annuity rates are currently poor, they do guarantee an income for life. One adviser also pointed out that you never have to clean bird poo off your pension.”

I have no allegiance to the pensions industry, nor indeed to the DECC, but speak as someone who has gone solar but has yet to be convinced that it was financially the right thing to do despite the hype.

Jim Kenney says:
17 February 2014

I think the point is that it is generally wise to spread your eggs over a number of baskets and it seems clear that PV pays out well for 20 years (and saves on energy bills) whereas most pensions/savings appear to perform less well in the short (20 year) term but will (hopefully) continue to perform for a longer duration.
On a separate note, has anyone got experience of the iboost gadgets that increase the savings by diverting surplus PV energy to the immersion heater?

Jim Kenney is quite right in saying that you should diversify your investments.
I invested in PV when it was expensive (£14,000 for 4pKv) and the TAX FREE return was guaranteed for 25 years. I regard it as just another asset class – it is a wasting asset, but it provided an income (FIT) of over £1,500 in the first year, just under £1,600 in the second year. On top of this, we have saved about 25% of our daytime electricity charges – about £160 p.a.

£14,000 in an ISA would have yielded about 3% over this period – £420 a year. Using that yield as a benchmark, not only have I received the same income on the capital as if it had been in a cash ISA, my original investment cost has been reduced by about £3,000 over the 2.5 years since it was installed (it now “owes” me £11,000).
On this basis, assuming that RPI stays at the 3% level, the installation cost will have been extinguished within another 7 years and my COST-FREE income of £2,000+ p.a. will continue for another 15 years.

Rob Roy says:
17 February 2014

Sorry to keep blethering on about this: A [cash] ISA is NOT an appropriate benchmark!!

Jim Kenney says:
17 February 2014

Agreed. My ISA is depressingly worth less in real terms than 5 years ago whereas my PV brings me £500/year. Chalk and cheese

Jim Kenney says:
17 February 2014

Rob Roy/Bridge Coach. what are your thoughts on the principle of taking your earnings from the PV and reinvesting it into an ISA. That just has to make a lot of sense?

Rob Roy says:
17 February 2014

It’s the filling the bath with the plug unplugged scenario. I don’t “earn” enough from PV to make an ISA make sense – in isolation – and being philosophical about it it will still be many years (8 – 9?) before I have “earned” enough to amortize the PV investment, even longer to catch up with putting the same amount into an ISA at the outset. I use the piggy bank to budget for when I have to replace the inverter!

Rob Roy
I’m puzzled by your comment “It’s the filling the bath with the plug unplugged scenario”. Can you elucidate please ?

I use the FIT payments to supplement my income (I’m retired), I add them to an instant-access cash ISA when I receive them and withdraw from it if & when I need to do so. (I haven’t touched the last 5 payments so far, so I still have a £2,000 buffer available).

As you alluded to previously, the return from an annuity would be less than half of what I get from PV. It’s true that if I live more than another 23 years, my income will drop, but if I felt that it would be a problem then I could leave an amount equivalent to the excess of PV income over annuity income in my ISA every year for 12 years and still be better off than if i’d put the money into an annuity.

Jim Kenney:
In answer to your query about investing the FIT payments in an ISA – if you don’t need to spend the FIT, then a cash ISA will give you a safe tax-free home for your money. Apart from inflation, what have you got to lose ?

Rob Roy says:
22 February 2014

If you have found a way to both add to and withdraw from a cash ISA (presumably without losing the tax benefits) then that put’s you in a financial league way beyond mine!

Re your second para I think it would be helpful to differentiate between % and absolute return. If I had to exist on the absolute income that my 16 panels produce, even though percentually way ahead of an annuity, I’d have to sell up and move out from here!

The danger throughout comes from comparing the returns from an accessible cash ISA with those from PV. In the latter case the returns over the initial 8 – 9 years or so (in my case) will represent no more than repayment of my capital. Only after this does a PV investment begin to catch up with an ISA – which in time it should outstrip, if I stay here long enough to benefit.

I only use the cash ISA for storing my FIT payments – these total about £1,600 p.a., so there isn’t any problem with Tax benefits. Excess income (from all sources) is invested in my Stocks & Share ISA.

Re my second para, that is just considering the equivalent pension available for £14,000 (cost of my PV system) with the FIT payments!

Assuming a “pay-back” period of 9 years, as far as “no more than repayment of my capital” is concerned, don’t forget to take into account that a REAL comparison should include the amount of interest that the “repaid capital” would earn in an ISA. In other words, after 3 years, the annual amount of interest on “repaid capital” in the ISA will be 33% of what it would have been if you hadn’t invested in PV and after 6 years it would be 66%. Average interest over the whole 9 years would be very close to 50% of what you would have earned with no PV. AND, after 9.5 years, not only would your cash ISA contain more money than it would otherwise have done, but you will still be getting an income (FAR in excess of your ISA interest) from what would then be a zero cost asset.

As far as an “accessible cash ISA” point, this should only be of concern if you regard the original capital as short-term savings. However, if it’s your “rainy day” pot of money, you should probably not invest it in PV.

P.S. I’m still puzzled by your previous comment “It’s the filling the bath with the plug unplugged scenario”. What did you mean by this ?

Rob Roy says:
23 February 2014

The mathematics risk getting rather complex and the assumptions inevitably more risky. I think however that I am agreeing with your main point – that if you allow for interest to accumulate in your ISA then this puts back the point at which you will have earned an equivalent – net – from your PV quite some way beyond “my” 8 – 9 years.
Great if your crystal ball says that you are going to stay put for (say) 12 – 25 years, you are laughing, but not if you up sticks before then. To me PV is on a par with long term investment (in a “wasting” asset) with the risks that that involves in return for which the returns should be correspondingly greater. Not something that is generally emphasized in the hype.

I don’t agree with “quite some way beyond “my” 8 – 9 years”; for us, it’s actually 8 years.

To make the maths easier, let’s just look at 2 examples of a cash ISA:

1) A £14,000 deposit at the start of year 1, with a 3.2% interest rate compounded over 8 years (same rate as 10-year Money Market rate). Value after 8 years = £18,012

2) An empty ISA into which all FIT payments (starting at £1,600 p.a and increasing annually by 2.75% RPI) are made for 8 years, same interest rate compounded would result in a value of £18,206 – £194 more than the “pure” ISA.

I do accept your point that if you move house frequently then PV is probably not the best investment for you. However, as we don’t, with our break-even point at just under 8 years, we expect several years free money beyond that.

Rob Roy says:
24 February 2014

No real contradictions as I see it. You can prove anything with statistics (depending on the assumptions). I compared how long it would take a PV investment to “net” me the same as putting the same investment into a cash ISA, and the number crunching came to something in excess of 12 years depending on the inputs. Reality will inevitably be different and your situation different from mine. The basic point remains the same: PV is not risk-free as is widely promoted, it is highly dependent on timescales for its profitability

Jim Kenney says:
17 February 2014

Bridge-Coach, if you are only saving 25% of daytime electricity, have you looked into ways of improving on this? I guess this depends on lifestyle (we put appliances such as dishwasher, washing machine, etc) on when we leave for work so they use daytime energy whereas previously we put them on at night. I imagine you have already looked into this?
The immersion heater controllers seem to work well but the good ones seem to be too new to get detailed feedback. Any thoughts?

We are still on economy-7, so to make life easy, we run dish-washer & washing machine between 2:00am and 4:00 am – essential during the Winter and we’re too lazy to change that regime during the Summer. (Apart from which, during the first year, we found that by running dish-washer followed by washing machine during the day only brought our overall usage up to 35%)

As we have extremely reliable gas (condensing boiler) heating, we have not used the immersion heater for over 20 years, so I cannot comment on the controllers now available for using PV energy.

phil says:
11 October 2014

I live in the north(PRESTON) my house is west to east I have be quote £6000 for 12 panels + 1free 4kw. with a £900 pa is this right

Rob Roy says:
11 October 2014

If you have been quoted £6000 for a 4 kW installation (?) then this tallies more or less with my experience in June 2013. On the other hand £9 K FIT income strikes me as distinctly rosy – 40% above my first year return. I am north and east from you (Newcastle) and my panels face due south with minimal shade. A pinch of salt would not come amiss.
Bear in mind that whatever return you use for your calculations, not to compare this with ISA’s and the like. In the early years the system is using your / my money to pay us back, and it is only after about 8 or more years that any return is “net”. Solar is in this sense a high risk investment – we are taking a gamble on remaining in our house for at least this kind of a timescale in order to begin to reap the benefits. The nominal returns should therefore be compared with those (much higher) from the kind of investment where you lose out if you try to cash in early. I think of my investment as a kind of mortgage in reverse.

phil says:
12 October 2014

Thanks for you time on my post .I will have to do some more research thanks again Phil

Hi,
We have just had 8 panels fitted due to size of roof and will produce an estimated 1770 units a year the system cost was £7500 complete with £1200 cash back, Can anyone tell me how much I could make on my system? I was told it would take to year 4 before I would make anything as I pay for them on finance £97 a month over 10 years, As you can properly tell I am new to this sort of thing, I told the company (zenith) if I was not going to make anything or it would cost me money to have them don’t fit them but they told me I start to make at year 4,
Thanks Andy

I agree with Rob Roy. Zenith appear to have (at least) massaged the figures for your purchase.
Your annual outgoings will be £1,164 and your FIT payments, based on 1770 units will come to £296 per annum.

On these figures, you might, in 20 years recover your total outlay : allowing for inflation at 4%, your total FIT over 20 years would be about £7,100 and assuming that you could use 50% of the energy produced, that might save you as much as £3680 (£10,780) as against your outlay of £11,640 over the first 10 years.

N.B. In your case, you are being charged an APR of about 15% on the £6,300 (£7,500 – £1,200) that you have borrowed. Too high with current bank loan rates.

Rob Roy says:
10 December 2014

[I hope these comments don’t get out of sequence ..]

I couldn’t have put it [Bridge Coach’s] better myself – and woe betide you if you move house in 4 or even 10 years! I’d be interested to know if you’ve got a case against Zenith for misrepresentation.

Rob Roy says:
10 December 2014

At the risk of repeating my previous comments, in my experience solar panels are generally over-hyped, and unless the installation costs come down in line with FIT reductions then this will apply all the more so in future. What your panels will produce will depend significantly on their location, orientation, shade etc so it’s dangerous to make off the cuff predictions. But when I did my calculations I concluded that I would not break even (net) before c. 8 years – and that was based on paying cash not on finance. If you live in sunny Guernsey then things may be different, if not then I reckon that Zenith will have some answering to do.

TrevofHucknall says:
16 January 2015

Just thought I would mention there is an electronic box on the market that automatically switches on the output to an immersion heater or storage heater, (resistive load only) when there is any spare electric not being used in the house and when the solars are giving an output. Mine is called, “Solar i Boost”

In 2010 I tied up £12,500 for my 4Kw system that is paying around 50 pence a unit generated and with a bit of shading I get £1500 a year plus the free heating or hot water. I have my electrical energy fixed until Dec 2017 with N-Power as there is no standing charge which is handy in the summer when I am not buying electricity from the grid.

I am a bit concerned that I cannot convert my bungalow into a house without possibly having to have my FIT payment reduced because of disconnecting the panels and putting back on the higher roof. (I have inquired about this with the FIT people) I cannot move house home because even though I own the panels the estate agents tell me they add no value and I would also miss the £1500 income. So think hard before you commit to a 20 year investment that cannot be sold or cashed in.

I was interested to read your comments on the nil affect on property values as advised by estate agents. I suppose some buyers might actually be put off by having such a system, and certainly wouldn’t pay more than the fundamental market value.

Bonkers says:
12 March 2015

Hi all
I am due to have 4w,16 solar panels fitted on finance, at a cost of £10,000 over 10 years.Will be paying back £15,000 back . The interest is 9.9%. I can overpay with the extra income from fit payment I was told.
I also am receiving a voltage optimiser, 39 LCD light bulbs, and a boiler management device (to save on gas bill)… I thought at the time was a brilliant deal.
Panic has set in as I’ve been researching PV panels and reviews.
Some sites are positive, some warn against it. This site has been helpful so I’ve decided to ask advice as you all seem very savvy about the panels.
I have asked the company on different occasions that will I definitely only be paying £32 a month towards the loan worst case they told me!! If its a dull day I will still generate electricity and be paid a minimum of £92 a month in fit payment and savings from my energy provider. I live in York , will have solar panels on front and back of my roof. I am worried that if I commit I am worse off as it sounds on here my electricity bill won’t be loads cheaper. The company made out I wouldn’t have a bill when advisor came out, when I rang up they said it would be hardly anything.I know when writing this alarm bells ring!! I’ve had surveyor out and energy efficiency guy , now waiting for what grade house is. Salesman said I’m not committed till panels go on so can withdraw, I feel a time waster but have to think is it worth the risk? As energy prices rise. I have a large house with 4adults,2 kids. Expensive electric bill!! Thank you for reading

Don’t worry about being a time waster – that’s the solar panel company’s risk, not yours. You’re potentially entering into a long-term loan agreement streching over many years ahead during which the economic situation of your household could change in various ways, so take your time. Are you absolutely certain that you can still withdraw if you choose to and that you are not contractually committed in some way? – Protect yourself by cancelling, in writing, now – you can always start again if you feel you are on the right course. Try and take some independent advice based on a competent calculation of your household energy requirement and the likely power generation capacity of your installation. In the absence of more detailed knowledge of the situation it seems a little odd to have panels on both the back and front of the property – is that the best configuration for optimal power generation, or just the only way the company can fit the biggest installation on your roof? You could be paying a very large sum of money for a system that has a very slow pay-back. Nobody can truthfully say what is going to happen to energy prices over the next few years, or, crucially, what government support for renewable sector will be going forward and whether the export tariff for surplus energy you generate on your roof will rise or fall in line with fuel prices or political whim. I am a cautious person, and this seems to have so many uncertainties surrounding it that I would stop and count to ten at this point in time.

mike says:
13 March 2015

Please don’t pay £10,000 anything like it..
I,m not sure but I think £6,000 is more like it for what u have?and see below where £4/5,000 is (Now) possibly the norm-but depend on qual;ity- but NOT 10,000 plus 5,000 I think you would loose out???
not sure now – but check with mortgage company re having debt on your roof- new buyers????
there are some good systems on the market – and some not so good- look for value-good cost effective returns on your pay out. research all
Energy will certainly only rise but fracking may change things????
Do shop around- you seem to be taking on a lot of debt and the interest payments may well dull the edge of your returns-
How many in your family- will your use and the returns really benefit?
Have you completed all other cost savings – insulation etc
I think south-west roof is the optimum?
Long periods of dull days do not a happy investor make –
Equally -long winters
best of luck

Bonkers says:
12 March 2015

I forgot to mention the loan payment is £130 a month.

Bonkers :
I would go further than John Ward and say that this looks to me to be a “blind him with science/complexity” type of deal. On the face of it, £10,000 is much too expensive for a 4kW installation and unless your house faces East-West, putting panels on front & rear roofs is a waste of time.

3 years ago, when the FIT payments were in excess of 40p per kWh, I paid £14,000 for a 4kW installation, which has proved acceptable.

I have seen similar installations available today for £4,000 to £5,000. Given the much lower FIT of 13.88p per kWh, that should be economical for you. As far as the “extras” are concerned, they could be purchased separately for less than £500 rather than the £5,000 that you are being asked to pay.

Final points – you need to tell your insurance company (and your mortgage company) if you have a mortgage, try to extend your mortgage to cover the cost, which would be much less interest than the £5,000 you are being asked to pay.

Techfor Energy says:
3 May 2015

Hi Bonkers

Please cancel !!

These finance deals never have the finance cost covered by the saving and income from a 4 kWp system.

A perfect, un-shaded and south facing 4 kWp solar PV system on a 30-35 degree roof surface, with iBoost or Immersun for the hot water will earn and save you about £ 1,100 p.a. max and this is with focus to use and keep all the energy you generate.

£ 130 a month finance will cost you £ 1,560 p.a. – leaving you £ 460 p.a. worse off than if you had done nothing.

A typical 4 kWp system on good quality equipment, done properly should cost about £6,500 to £7,000 if it is on 2 roofs (an East/West split like yours) with an iBoost or Immersun supplied and fitted.

Less than this means corners are being cut on equipment or specifications.

Tesco’s offer finance in the region of 3.8% as opposed to the 9% in your offer.

I hope this helps.

bridge_coach says:
21 March 2015

What happened to the long comment by “Author: Beverk” about poor service from “MY PLANET” ?

I received the whole comment by email but cannot find it here.