Invoice for Solar panels before 12th December

[JulianC]

Not that it needs to be said among esteemed company, but just be honest with the customer. Give them the facts unclouded by personal opinion and let them make their own minds up. It's all we can do at the moment. We can still quote for a top quality PV installation at a fair price, regardless of the final FIT rate. It just might be a while before the orders come rolling in!

 

[mdovey]

I think this may be one to point out to the lawyers involved in the court cases against the government (if they aren't on this already). By having the cut off date before the final decision on the consultation, the government are in effect creating a 4-6 week period during with solar installers cannot makes sales or install panels without being in danger violating the government's own legally binding consumer protection schemes, and a period during which the uncertainty on the final FiT as regards the customer will have a greater impact during this period than the final FIT reduction.

 

[martin fuller]

Re ground mount,,, I went along this route, and the planning for a 'stand alone' system is a nightmare, ( not closer than 5 mtrs to curtledge boundary) etc etc, only option is on a building!!! check out wikkapedia definition of a building,' a some construction with a roof and sides designed to be used as a , store, dwelling,' for some purpose !!
So a building is the only option, least is with our local council,
cheers

 

[gricks]

..... at the moment, the tariff is set at 21p, some of us can still offer you a ROI between 8-10%
Hope this helps.

What does "ROI between 8-10%" mean? Halving the FIT to 21p/kWh has meant the break even point has moved from say 11 years to 22 years leaving say 3 years of profit at say £500/yr. If customer spends £11,000 on the install at 10% for 25 years then using a compound interest calculator e.g. Compound Interest Calculator the amount after 25 years is a fantastic £119,182. Are you sure you didn't mean to advertise half a percent per year as this gives £12,461 i.e. £11,000 back with £1,461 profit.

 

[Earthstore]

I will try and explain.
ROI (return on investment) of 8-10% is still possible. The FIT for generating electricity @ 43.3p now reduced to 21p only makes up part of the ROI, you also have to take into account savings on your electricity bill (if you are using what you have produced from your PV system you will not be buying it from your energy provider) saving around 13p per unit, also the electricity that you sell back to the grid.
Add into the "mixing pot" around 25% reduction on capital expenditure.
Also for a 25year investment you need to add in an assumption of what the RPI will be, as it is linked, oh yes and it's tax free.
Now, as mentioned in other threads, I personally am not willing to sell until the outcome of the FIT consultation has been announced.
Hope this helps
Earthstore Energy

 

[solarsparkie]

earthstore , whats the lowest costs you have found for standing charges on export back to the grid and have you taken these into account in your roi figs? ( 13 p unit must be domestic your on about and the 25% reduction in capital expediture must have nothing to do with corperation tax but reduced sale prices , what level of rpi are you using and are you allowing for repair costs if you are going to using the cheapest nasty chinese kit our there )

I will try and explain.
ROI (return on investment) of 8-10% is still possible. The FIT for generating electricity @ 43.3p now reduced to 21p only makes up part of the ROI, you also have to take into account savings on your electricity bill (if you are using what you have produced from your PV system you will not be buying it from your energy provider) saving around 13p per unit, also the electricity that you sell back to the grid.
Add into the "mixing pot" around 25% reduction on capital expenditure.
Also for a 25year investment you need to add in an assumption of what the RPI will be, as it is linked, oh yes and it's tax free.
Now, as mentioned in other threads, I personally am not willing to sell until the outcome of the FIT consultation has been announced.
Hope this helps
Earthstore Energy

 

[Earthstore]

I crunched the numbers for a commercial system around a 30KWP output, using an export meter supplied by their own energy provider, with the cost of running the meter and the uplift on the export would have left the customer £200 per year worse off,working on an assumption that the customer would export 80%.
This particular one was even more complex as there were potential upgrades from the DNO, that we had to factor in also.
I contacted several other companies for their charges of installing and running an export meter, but then it gets very complex, you then have to factor in the pence per unit that they supply at, the lower cost of running their meter, an uplift from 3.1 to 5p export and there are also the tax implications, just to obtain an end result.
If you care to read my post I do not use a 25 year ROI, I added for the benefit of a previous post that they need to factor the RPI into their calculations. but for your informational 4% is the lower forecast.
25% capital expenditure is just what it say's, the reduction in system costs, It has nothing at all to do with corporation tax, as you are aware, that is for limited companies.
I do not think SMA would take kindly to being referred to as "cheapest nasty Chinese kit"!
The bones of this are, I can still make the numbers work, calculated correctly,system designed correctly, using quality equipment.
The ROI is only back to where it was 18-24 months ago, you just have to work harder to get there.
Do you not think that any old Tom, Dick or Harry could obtain his MCS, pop down to his local panel supplier, plonk them on a roof, and say there you go 13% ROI was going to sustain an industry?
Why do you think we are in this mess?

 

[gricks]

Add into the "mixing pot" around 25% reduction on capital expenditure.

Are you deriving the "ROI (return on investment) of 8-10%" partly because you guarantee to buy back the system from the customer at the end of 25 years at 75% of whatever they paid ? Who pays for the scaffolding ?

As nobody can predict future RPI inflation trends and inflation affects other parts of the calculation solar calculators like Solar Energy Calculator / Solar panels (PV) / Generate your own energy / Home (United Kingdom) - Energy Saving Trust utilise a flat model that avoids unknowns.

If you made up some hypothetical RPI then Dodgy Dick Solar Company could dream up a bigger RPI and pinch your customers with a promise of ROI of 11-13%.

Do you think that people seeing adverts like Cash ISA 4% versus Solar panels 'promises' 10% had anything to do with the 4991 registrations of 4kWp systems and below in week ending 23Oct2011 just before the consultation leak, causing the government to panic and close down the whole industry?

 

[BruceB]

I have said before, but in my opinion you should not be applying a rpi figure. The FIT rate received will be inflated by rpi anyway so using the current non inflated rate gives you a good estimate of a 'net present value' figure which is a sensible way of doing it. If you inflate by rpi in your calculations what you are in effect saying is that say £10,000 in 25 years time is worth the same as £10,000 now.

 

[Earthstore]

Gricks, are you aware of how ROI is calculated on a PV system?
It is easy if you know how, you calculate what output the PV system will produce per year, using a SAP formula, on average in the area I live our systems are performing 10% above this formula, fact.
Then you calculate by the FIT now @21p add the savings and export then using the cost of the installed system you have your ROI simples.
As I said before, I do not use 25year speadsheets as you can alter any assumptions to make the end result whatever you want it to be.
If you do not believe it is possible then do not buy a PV system, but please do not keep accusing me of any false calculations.
I am beginning to resent some comments, I trade locally and honestly.

 

[G_FUNK]

Some people just can't see the light!

 

[gricks]

An ROI example taken from Energy Savings Trust [EST] Ref1
Postcode SW1A 0AA 21p/kWh Faces South with optimum 30deg tilt.
Use EST calculator as fewer inputs to manipulate, it includes FIT/export/savings/S-values/degradation and after all EST is DECC funded.
As we use DECC proposed 21p/kWh then it must be new or retrofit =< 4kWp so as Ref1 use 2.9kWp
The EST calculator gives Total Income over 25 years is £14,548 (i.e. Gain). Please check!
it also suggests Total Costs of £11,700 and Ref1 suggests £11,500 so we'll use the mean 11600.
Ref2 and others define ROI as (Gain-Cost)/Cost and this is the same as (Gain/Cost) - 1
We need to multiply by 100 to get percent and divide by the Period to get % per year.
Simple Annualised ROI=((Gain/Costs)-1)*100%/Period so over Period=25 years this simplifies to...
ROI=((Gain/Costs)-1)*4 for above example this is ((14548/11600)-1)*4 = 1.017 %/year Note 1
Reasonable as the EST calculator and Ref1 gave Payback time 20 years so only 5 years are profitable.

If Mr Bloggs claims "ROI (return on investment) of 8-10% is still possible" we can now find out how much they charge to install including scaffolding. With Annualised ROI=10% then 10=((Gain/Cost)-1)*4
So Cost = Gain/3.5 = 14548/3.5 = £4156.57 ... Chinese gear can be very good. Note 2

Note 1: Check using Ref3 an ROI calculator. Original Investment=11600 Returned Value=14548 Go from 6/1/2000 to 6/1/205 press [Calculate] we get Simple Annualized ROI 1.0%
Note 2: Change Original Investment to 4156.57 press [Calculate] we get Simple Annualized ROI 10.0%

Ref1: TinyURL.com - shorten that long URL into a tiny URL
Ref2: Return On Investment (ROI) Definition
Ref3: http://www.money-zine.com/Calculators/Investment-Calculators/Return-on-Investment-Calculator
Part 2 to follow - why a standard way of stating returns in a familiar form to the public is good news for the solar PV industry- the light at the end of the tunnel.

 

[gricks]

Erratum in last post: Note 1: should read "Go from 6/1/2000 to 6/1/2025" - dodgy keyboard to blame.

 

[Earthstore]

From table
Savings
Export	50%	3.1	Export
Total Savings/Income
	VAT

[TD="colspan: 2"] Feed-In Tariff [/TD]
[TD="width: 103, colspan: 2"] Output [/TD]
[TD="width: 66"] X Feed in Tarriff Rate [/TD]
[TD="width: 94"]
[/TD]
[TD="width: 66"]
[/TD]
[TD="width: 101"] Total [/TD]

[TD="bgcolor: #CCCCFF, colspan: 2"] 3433.6 [/TD]
[TD="bgcolor: #FFFF00"] 21 [/TD]

[TD="bgcolor: #CCCCFF"] £721.06 [/TD]

[TD="bgcolor: #FFFF00"] 50% [/TD]
[TD="colspan: 2"] Cost (pence) [/TD]
[TD="bgcolor: #FFFF00"] 13 [/TD]

[TD="bgcolor: #CCCCFF"] £223.18 [/TD]

[TD="bgcolor: #CCCCFF"] £53.22 [/TD]

[TD="bgcolor: #CCCCFF"] £997.46 [/TD]

[TD="colspan: 2"] Cost of installation [/TD]
[TD="bgcolor: #FFFF00, colspan: 2"] £9,520.81 [/TD]

[TD="bgcolor: #CCCCFF"] £9,996.85 [/TD]

[TD="bgcolor: #FFFF00"] 5% [/TD]

[TD="colspan: 2"] Annual return on investment [/TD]
[TD="colspan: 2"]
[/TD]

[TD="bgcolor: #FF99CC"] 10.0% [/TD]

Well you really are trying to dazzle us with your brilliance, and as fantastic as it may be it is flawed.
Please see the table above, this is for a 4KWP system, fully fitted, including scaffold, the performance figure of 3433.6 is for the optimum roof according to the SAP formula.
If I was certain of the FIT rate I would supply this system to you.
It clearly shows the ROI (the pink section), so, yes it is possible.
As stated again and again, this is for year one, if the system out performs the calculation, which in my area they are your ROI will increase, also the FIT is indexed linked, and energy prices are rising, but in my opinion you have to use too many assumptions for a 25year ROI
Why you are pursing this matter in such a negative way is quite beyond me, are you trying to prove to us all that you are in some way superior?

 

[SolarCity]

Earthstore - just a difference of opinion, is it not?

Keep it civil, ladies.