Will your solar panels bring sunshine to your savings?

In his last paragraph, Chris of Gloucester says that “if you prefer your cash fluid and you don’t like the idea of a 20 year deal …..” HOWEVER, he also points out that after 8-10 years you have recovered your initial investment. This would mean that further years are pure profit – for a 4pkW system in the midlands this means FREE income of over £2,000 pa. (I am basing this on the ACTUAL returns on my system since July 2011.)

I have assumed that the capital that I have invested in my system would otherwise have been earning 3% net of tax in a savings/deposit account. The payback period, taking into account the foregone interest on outstanding capital will be just under SEVEN years (assuming inflation of just 2%).
The inverter has a 5-year manufacturer’s warranty and an expected life of 10 years, so I don’t expect to have to replace it during the “payback” period.

Finally, if I amortize the original cost over 20 years rather than 7 years and allowing for a £1,000 inverter replacement, the income that I will get on my original investment is equivalent to 13.3% NET of tax – show me a bank account that will do that !!

Bridge Coach – I completely agree but I would add that inverters genearlly have a 12-15 year mean time to failure and you should be able to get an exchange one for under £500 fitted. £1,000 for an inverter is an urban myth – it is the cost of a new one if you dont have an old (broken) one to exchange.
Additionaly, if you factor in that electricity inflation has been running at over 6% (around twice RPI & CPI) then your 13.3% maybe a little under estimated.

I agree Jim – I hadn’t taken account of the fact that electricity price increases seem to be much higher than inflation – closer to 8%pa at the moment. Our figures so far indicate that we have been able to use just 35% of the generated power, rather than the 50% assumed by HMG and by Which?. This saved us 1200 units in the first 12 months – approx £140. An extra 5% (8% – CPI) on this amount would be £7, thus raising my amortized yield to 13.7% (as you say, “a little under-estimated”)

Nick
in principle it will be no different to any other type of roofwork and if you use a reputable installer there should be a very low risk of any problems. However I guess there are principally 2 things that could go wrong – either the roof could get overloaded and sag a bit or it might leak. Either way if you use a decent installer that knows how to calculate loads and then do a proper job then this shouldnt be a problem. For your own peace of mind I’d recommend using an installer with a decent track record and has insurance, in which case there is no difference to maybe getting a chimney or a leak fixed.

Jim,
Yes I would certainly go with a reputable installer (in fact they won the Industry award for 2011) and the risk would be very low but conveyancing, solicitors and title deeds are another matter entirely. My justifiable concern is to cover the eventuality of being asked by a buyer’s solicitor (either of my own property or one or both of my 2 neighbour’s) or even a future owner who sees what the title deeds say and is the type who goes by the letter (as opposed to the spirit) of the law for paperwork given that the roof is a party repairable roof.
I have a solicitor looking into it but who hadn’t yet come across this issue before but I also have an estimate sitting on my desk with the prospect of another 3% coming off the FIT on 1st Nov. Nick

Nick
I see your problem and I’d be grateful to hear the outcome.
With regards to your award winning installer, I dont know which award they have but my only caution would be to generally only take independent commendations as credible. A lot of the so-called trade awards operate in a way where companies get to nominate and vote for themselves. Hence these questionable ‘awards’ can make a low cost but potent marketing tool though, alternatively, well commended businesses such as Solarcentury (if I am allowed to name them?) have shelves full of genuine 3rd party business and ethical awards.
Good luck with the legal stuff and I hope you beat the FiT drop. Jim

Thanks Jim. Yes I’ll let you know what the solution is. I can’t be the first person to have this problem. Good points about awards. They state they are recommended by Which? and moneysavingsexpert. They say won 3 awards last year.at various Renewable functions.
Nick

Jim, I agree with the first part of your comments.
However, ” And if you reinvested the benefits . . . . .” is misleading – I have calculated that with a starting return of 10%, the 16% or17% rates would not be reached until years 10 and 12 respectively (assuming notional amortization of 99 years).
On the other hand, if you amortize over the 25 year term of the government payment, the 16-17% rates are not reached until year 18/19.
The big caveat here is that these rates will ONLY apply if there is no degradation of the system performance – most unlikely.

Hi Bridge Coach. You didn’t comment whether your amended figures take into account the reduced inverter replacement cost?
Amortising & capex write off is always a personal view but I dont think my figures are misleading & are certainly not intended to be. I simply added up the 20 year benefits, subtracted the capex and divided the result by 20. I applied some reasonable figures for degradation, inflation, etc but I kept the energy inflation way below this year’s 13% (which? figures out today).
BTW performance degradation from high quality panels is virtually zero but an ‘average’ is 0.4% per year over 20 years although it isn’t linear. The average is also dragged down by poorly constructed panels that let moisture in after a few years.
One more point is that good quality panels have a positive output tolerance which means that the initial output is actually slightly higher than the rated output. This means that it can take several years for the degradation to reduce the output to the rated value. In other words, buyers of good quality systems can get a ‘freebie’ of higher than expected initial output (and bad systems can be lower). My figures didn’t take this into account. The magnitude of this is that a ‘good’ system may have an initial output 5% higher than rated. And at 0.4% degradation it will take 12 years to drop to the rated output. I was about to say it is an interesting subject, but that might sound a little geeky…

Anmar. This is a situation that I haven’t heard of before. Do you mean your houshold insurance wants £240 to insure the PV? I believe they normally just include it on the bricks & mortar insurance – I haven’t heard of that kind of premium before. I have had pv for over 8 years and have had cover on household insurance at very little extra cost. I think it just counts as a fixed electrical appliance?
did you buy your PV or is it a rent a roof scheme? I bought my PV so that might possibly be the difference?

Rob Roy. I dont know how far North you are but your figures dont look a million miles out. and I believe the EST figures are that the average home only uses 20% of the generated energy unless you modify the way use electricity (e.g. I put dishwasher/washing machine on when I leave for work in the morning). Some people use EMMA type immersion heater controls?
However, as Which? (Richard Lloyd) have said, energy inflation is at around 13% and this links to the export tariff and also to bill savings, and I am unsure if you have taken this into account?
and also as Which? suggest, you can take your PV income and reinvest it in a savings account for further benefits. so in other words, I think that good earnings can be made but payback is normally around 7 years. and of course, the money comes trickling back in as soon as the PV is installed so you do start getting access to it before year 7.
So it is possible to get double digit returns with PV but if you have other ways to get better returns then it makes sense to do that.

I havent seen your spreadsheet but it needs to factor in the bill savings and export tariff at energy inflation, and the FiT at RPI. Then if you pay your installer, say £5,500 for 4kWp, you should then have around £800(ish) back at the end of your first year. so if you chose to invest that £800, you would get a (say 4%) return at the end of year 2.
So, no, I dont think it is premature to talk about investing savings before year 8. but clearly it is a matter of personal circumstances and perspective. And did you see British Gas & Ofgem are preparing us for another round of energy price increases?

Ahh. I think I get it. I think we are talking at cross purposes on 2 levels. firstly, I am assuming that you have £5,500 sitting in a bank account earning very little interest (the bank of England is talking about negative interest rates!!). If you were to spend it on PV, you would have some lucre in your hand at end of year 1 that you could reinvest.
If, however, you plan to borrow off the bank to finance the deal, it is not going to work.
My view is based on you having the £5.5k and you can either put it in a bank or spend it on PV.
For clarity, I am not suggesting that the PV would generate £5,500 + £800 at end of year 1. And if you were to have a FiT cheque in your hand and smaller fuel bills it wouldnt seem like smoke & mirrors.

Agreed. If you need access to the money then dont tie it up in PV.

For myself, I figured there are 3 certainties in life; death, taxes and rising fuel bills. When I put solar on my roof, my combined fuel bills dropped to £30/month for my 4 bed house. the feed in tariff pays me just about the same so I no longer have to worry about household energy bills. So for me it was a no brainer. But I do live in SE England and have an unshaded south facing roof.

And if I’d left it with my ISA or NS&I? I’d have just a few quid more than I started with but I would have easy access to the pot that was, in reality, dwindling in relation to the RPI.

It isnt classified info but I havent kept a record since I happily realised the FiT covered my energy bills. But I should point out that my energy consumption is low and my house is fairly modern and low cost to heat.

To Bridge Coach. I emailed Eon to ask how to translate bars of daytime (grid) usage displayed on my / their Energy Monitor into a meaningful daytime kWH equivalent. The query seems to have defeated them. Perhaps you are more clued up than they are?

To Rob Roy:

My EON meter displays three sets of bars, headed
Night Day Eve

One of the numerical fields displayed shows the total usage over the preceding 1 day, 7 days and 30 days, cycling round the 3 values every 30 secs. To find a very crude measure of daylight usage, I count the total no of bars over the 3 columns, multiply by the 1 day usage and divide by the no of bars in the Day column. Imported usage I take from the supplier’s (Economy 7) meter.

As an added fillip to PV, as we are on Economy 7, although we don’t generate anything overnight, we can still use low-cost electricity to run dish-washer, washing machine etc overnight if there’s been insufficient sunlight in the daytime.

I think that is similar but not identical to the methodology which I came round to in the end: Take the number of “day bars” as a proportion of “total bars” and apply this fraction to the kwh shown for the last day recorded. But I came to doubt this logic when the no of bars for evening hit the 5 bar limit on by no means excessive usage. When is a bar not a bar? I’d hoped Eon would shed some light on my daytime usage but so far no joy.
It must be quite some hassle to work out if you have generated sufficient solar kwh’s to merit switching to Economy 7 or not, except in cases of full sunshine or total cloud cover.

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)

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, 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

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.

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!

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.

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.

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

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

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?

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 ?

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 ?

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.

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

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.

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.

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

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.

[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.

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.

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.

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 :
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.

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.