Solar Payback

[lurker]

I know its claimed around a 7 yrs payback time on a south facing roof of the right angle etc?

(Some estimates seemed abit optumistic too me)



Is there any data from first year production figures extrapolated over the next few yrs too show people who have installed PV are on track for this payback time?

People should be able to caculate there approximate payback date from data collected by now.

[RenewableCandy]

Our system cost £8900 and is expected to generate at least 1400 kWh per year. This gives a return on generated electricity just shy of £600 per year.
However, there will also be some money saved because electricity used while the panels are generating is not paid-for at the usual 12p/unit. So the figure generally quoted for payback time is more like 10 years.

There are also CIBSE figures for energy production for all renewables, these are used for costing-up building projects.

Bear in mind that after 10 years you get pure profit, also if you've taken money out of an account (as opposed to borrowing it) to pay for your PV rig and you know in advance that you won't need it for anything else, a 10% rate of return is pretty good.

[Kontiki]

Our system cost just under £13k & the data I was given was the earnings should be £1209 (included was the name of the program used I think it was Sunnyboy) All the quotes gave similar figures based on sizes from 3.65 to 3.96 kws. These were based on the our location, roof slope & orientation. One of the quotes (a bit more expensive) gave me a lot of data making assumptions on the increases in the FIT's & bills due to inflation. Timescale for payback varied from 9 to 12 years, the assumptions on the savings from our bill were much higher than I would expect £300 to £400 as we are quite low power users (under 2500 kws per year).

It will be interesting to see how they stack up in the real world, maybe a thread which everybody can add their yearly prediction & then the actual figures they get from their system .

[Pepperman]

865kWh/kWp is the generally accepted average yield but that'll vary by technology. Hopefully Ofgem will publish a load of interesting data once the first year of the FiT is completed.

[An Inspector Calls]

My money stays firmly in the bank.

I looked at two systems. I factored in the fact that production from the panels is expected to fall at 1% per annum. The first cost £11,088, rated at 2.16 kW and expected to produce 2000 kWh per annum. With FITs at 41.3/kWh, electricity costing 10 p/kWh and assuming 25 % in-house consumption of the production, the simple payback (no interest consideration) is 14 years.

The second system cost £15,200, rated capacity 3.72 kW, expected production 3,084 kWh; payback here was 12 years.

If you apply DCF to both cases (or, in other words, lost interest after inflation - and it's no use over those timescales expecting the present interest rate farce to continue), then even at 2.5 % the payback stretches out to 18 and 15 years respectively.

It's not worth the maintenace and political risk making the investment.

[biffvernon]

There's arithmetic and there's arithmetic. I'm confident of an 8% return on investment from my pv system. Slightly more than the 7.5% return on my investment in Ecotricity Ecobonds. What's left is in the bank earning less than the inflation rate.

[kenneal - lagger]

My money stays firmly in the bank.
..........
It's not worth the maintenace and political risk making the investment.

You obviously have more faith in the economic system and the ability of nuclear power to get us out of the hole that we are in, both from the national and international points of view, than most of us here. If you have read many of the threads here you will have noted that many of us are not convinced that the economic system can be fixed in time for the new nukes to be built: that cheap oil will last long enough for the new nukes to be built: and that cheap food will last long enough for the new nukes to be built.

More expensive fuel and food will have a negative effect on growth as people will have less free money to spend of the useless STUFF which fuels growth. No growth means a broken economy. A broken economy means we can't afford to invest in expensive white elephants like nuclear power stations which would otherwise to be polluting the environment for our grand children because we won't have the energy to decommission them.

If you look at the maths of exponential growth, with the economies of China and India growing at 10% per year, that's about a third of the world's population now, they will require double the resources they use now in only seven years time. That will have a huge effect on all world resource prices and a drastic effect on growth, especially for the UK with our huge current deficit.

The likelihood is that if you leave your money in the bank, you will lose it when they collapse in a few years time. If it is on your roof, in the form of PV panels, you will have some power to run your home with (as long as you can fix the system to run off grid). Also as has been mentioned above you will get an income from it in the meantime.

Might I suggest that a better form of investment would be to insulate your house to PassivHaus standards with a small PV system to run your low energy (LED?) lighting and a fridge during the summer (use an uninsulated larder in the winter). You will then be able to keep yourself warm affordably in a resource poor future as well as see during the evenings.

[An Inspector Calls]

biffervernon
You stand little chance of making a return of 8% even if the equipment lasts 25 years (which I consider very unlikely).
£11088 invested at 8% over 25 years achieves a value of nearly £76,000
Invest in solar, and given the figures I've seen (and which are similar to those reported elsewhere on this board) after just over 13 years you will have just recovered the capital you invested; your £11,088 is back in the bank. Over the next 12 years, all being well, you'll earn another £8,600. Even at an interest rate of 0.5 %, it's better to put your money in the bank.


Kenneal
Well I'm more convinced with the economics and scale of nuclear than PV. If you're trying to argue that PV is a better solution than nuclear to a short-term energy crisis because we stand more chance of implementing large scale PV installations to meet a supposed peak oil crisis, then I'd think again. The amount of PV we'll install here is piddling simply because there's insufficient production capacity of photo cells.
If you suppose the energy crisis you describe then the UK will simply start to exploit cheap indigenous coal - and climate change (real or otherwise) will go hang.
As for your whimsical energy saving suggestions, I long ago converted to low energy bulbs (twenty years at least), the house is well insulated, the fridge we have is kept in a north facing room with no central heating, and I heat the house with a heat pump (which I installed without prior knowledge of possible RHI).

The PV deal is rubbish. And so is the FIT deal on wind - even for my location which is exposed to the south westerley winds.

[kenneal - lagger]

Kenneal
....... a supposed peak oil crisis,

If you believe that , why are you on this website?

If you suppose the energy crisis you describe then the UK will simply start to exploit cheap indigenous coal - and climate change (real or otherwise) will go hang.

Probably true, but that still does not make it the right thing to do.

As for your whimsical energy saving suggestions, I long ago converted to low energy bulbs (twenty years at least), the house is well insulated, the fridge we have is kept in a north facing room with no central heating,

There was nothing whimsical about my energy saving suggestions. Two of my clients have saved 72% and 79% on their energy bills over the last two years after taking their pension lump sums from the bank, where they were earning nothing, and insulating their 70s houses to PassivHaus, or near, standards.

When you say "well insulated", what do you mean?

and I heat the house with a heat pump (which I installed without prior knowledge of possible RHI).

And I sincerely hope that your electricity supply doesn't fail on a cold winters night.

[JohnB]

As for your whimsical energy saving suggestions, I long ago converted to low energy bulbs (twenty years at least), the house is well insulated, the fridge we have is kept in a north facing room with no central heating, and I heat the house with a heat pump (which I installed without prior knowledge of possible RHI).

The PV deal is rubbish. And so is the FIT deal on wind - even for my location which is exposed to the south westerley winds.

How do you heat your house during a power cut, when the heat pump won't work? There's a big difference too between "well insulated" and PassivHaus, as a PassivHaus shouldn't need a heat pump, and should stay comfortable with very little, if any, heating.

A lot of the discussion here is about energy security, rather than a purely financial return. The purpose of money is to provide for the needs of people, and not an end in itself, and an investment in energy independence and security could be worth far more than having more money in the bank.

No one knows what will happen in the future. Nuclear power may be ready in time to prevent power cuts, new technology may sort out all the other problems, and the banking system may get fixed. Or it may not. If we don't make reasonable preparations for the worse, even if hoping for the best, and TS really does HTF, the owner of a PV powered PassivHaus is going to be in a much better position than someone who left their money in the bank. We only get one life, is it worth taking a chance with it because it doesn't look like a good financial investment?

[adam2]

And as regards small battery charging PV systems, grid power is almost certainly cheaper in most situations, yet I and many others favour such systems not as an investment, but as a disaster prep.
What if the grid fails for a day or two, or longer ?
What is the return on a fire extinguisher ? or a first aid kit ? or insurance?

[An Inspector Calls]

I never claimed PassivHaus standards, nor could I since I live in a house part of which has solid walls. I'd like to see the cost benefit analysis for the payback on Passiv haus insulation. I'm sure it will payback, but over how long?
If the electricity fails then my heat pump is useless (gosh, never thought of that). Well, we'll just have to fall back on our wood-burning stoves supplied from our own timber. What do you do with your PVs at night (happens every day you know) and during the winter? What do you do with your wind turbines when it isn't windy (as per most of December?
I agree we'll face peak oil - we may well be there already, but it's not the cliff edge that some of you seem to think.

[JohnB]

I heard of someone who replied to being asked about the payback on solar, by asking what the payback was on the house roof . Surely chucking a tarpaulin over it gives a better payback than all those expensive slates or tiles.

[Pepperman]

Even at an interest rate of 0.5 %, it's better to put your money in the bank.

That's a typo?

[cubes]

There was nothing whimsical about my energy saving suggestions. Two of my clients have saved 72% and 79% on their energy bills over the last two years after taking their pension lump sums from the bank, where they were earning nothing, and insulating their 70s houses to PassivHaus, or near, standards.

Out of curiosity, what are their expected payback times for the money invested?

Even at an interest rate of 0.5 %, it's better to put your money in the bank.

That's a typo?

I think it must be, a very quick calculation gives me an interest rate of 2.5% (after tax) compounded over 25 years to end up with about £20,000.