new chapter in solar again tomorrow

[Eco Deal]

So a new cut to the tariff !

Do you think it will impact your business as much as other cuts ?

how do you see the long term for your business good or bad ?


:93:

 

[Megavolt]

What has it been cut to now.

 

[infinity]

its only dropped half a penny?

 

[Worcester]

Expect it to have zero impact. Customer already understanding that the tarrif is on a downward trend, they expect it to be mirrored by insatll prices, and based on what we just got offered panels for, I'd agree with them Got offered at 1/3rd price we paid this time last year.

 

[Somecamel]

I've been buying Nobles at £115 per panel (46ppw).

Care to share what you've been offered? I'm thinking mid 30's?

 

[Eco Deal]

Worchester you seem very confident in the market , I know renewables has a long term future but only once every one as forgot about the 43p's etc .

i can see how people will pick up the phone and call you unless your spending an arm n a leg for one led .... which is a mistake I have made in the passed

 

[Worcester]

Round here, we've already educated then to forget about 43p. Today it is actually a better investment than when it was 43p. - You could do twice as many things with the money for the same return - and that the key, it acually frees up more capital to invest in other areas.

Maybe it's my customer profile, they are all AB's and without exception they all own or have owned their own businesses. I guess not your average customer

Our marketing is incredibly highly targetted, just at that profile.

 

[SRE]

I don't think the cut is going to make a huge difference this time but the darker days and colder weather will. It's naturally a seasonal business, why would you spend cash now to generate very little until Feb next year, you're better keeping your cash in the bank. I'll be spending the next few months doing what Worcester has done and identify target audience and plan cheap marketing for next year - at the same time as keeping my fingers crossed very tightly!!

 

[Eco Deal]

as an installer we all know that today deal is as good as the 43.3 days .... but how does joe bloggs know this ? with out spending an arm and a leg to tell him .... the customer as more chance of going on a compare site and getting stupid low quotes.

in my eyes you need to be selling a 4 kwp at around the 6250 - 6500 to make any profit ......
and buying the kit for around 3100 top side , so how people are selling at 5250 even buying at 3100

5250

minus 3100 D.C and A.C

plus the vat on the 3100 thats 3720

5250 - 3720 = 1530

Scaffold = £450
Labour = 400
ads = 200

thats 480 profit not including the long list of other over heads ...........

then your vat back later so your working to get your vat back ?

there not much in solar pv now sor the amount of work involed and paper work , efforts to get sales , calls , emails etc etc its ok when your making 3 k a job but them days are long gone

thats the basics

 

[Somecamel]

For a full Install of a basic 4kw system including everything down to Scaff and an extra man on the ground it costs me £4027 ex VAT. Selling for £6457 ex VAT.

 

[Gavin A]

We're doing £5495 for a 3.9kWp value system of jetion poly and Samil, £6250 for a 3.9kW hyundai & power-one system, and a fair amount more for Panasonic.

We'll bring around 2k from that into the company in wages and nominal profit margins (from which we have to pay our monthly bills), vs around £3-4k per job last year.

These are the sort of levels I see prices bottoming out at anyway, so we may as well go and pick up work at these levels instead of being undercut and not getting any work.

At these sort of prices the returns are up to around 12-14% again, and I can't see the market staying so crap if we can genuinely be offering those sorts of returns, so I'm willing to do what's needed to stimulate the market as ultimately we can't survive on 4-5 jobs a month even if we did add £1k to that price.

I reckon that we're now going to have 9 months with no FIT cut to worry about, so it's time to set your pricing and stimulate the market for solar PV to build up for a busy spring and summer IMO. We're going to have to work at it as an industry, but if we do, then there's no reason we can't be doing well again come the spring IMO.

 

[SRE]

We're doing £5495 for a 3.9kWp value system of jetion poly and Samil, £6250 for a 3.9kW hyundai & power-one system, and a fair amount more for Panasonic.

We'll bring around 2k from that into the company in wages and nominal profit margins (from which we have to pay our monthly bills), vs around £3-4k per job last year.

These are the sort of levels I see prices bottoming out at anyway, so we may as well go and pick up work at these levels instead of being undercut and not getting any work.

At these sort of prices the returns are up to around 12-14% again, and I can't see the market staying so crap if we can genuinely be offering those sorts of returns, so I'm willing to do what's needed to stimulate the market as ultimately we can't survive on 4-5 jobs a month even if we did add £1k to that price.

I reckon that we're now going to have 9 months with no FIT cut to worry about, so it's time to set your pricing and stimulate the market for solar PV to build up for a busy spring and summer IMO. We're going to have to work at it as an industry, but if we do, then there's no reason we can't be doing well again come the spring IMO.

I agree with most of what you're saying Gavin - it's working towards the Spring now and being clever with marketing that will keep everyone with the cash to get to the spring going BUT I can't sell at those prices, I'd be making a loss unless I could do a job a day and there's just not the market to allow a job a day, especially taking into account the dire winter we're facing. The govt only allows no cuts in Fit for 6 months so there's no guarantee that we'll have 9 months of no cuts but if there's a small cut in 6 months it may stimulate the market a bit, so not necessarily a bad thing.

Yesterday I saw panels at 35p, that's got to be an oversupply issue, once those panels have gone I think prices will increase slightly as they match supply and demand.

Is anyone backing the solar marketing campaign???

 

[Gavin A]

it's definitely 9 months, it's a maximum of 2 degression points in a row with no cut, which means 9 months between the november cut and the next cut (assuming the market doesn't double in size over winter).

Those prices are best case scenario, so anything over 25 miles from us is extra, anything needing different more complex scaffolding is extra 2 roof faces are extra etc.

We've had to go through our costs and really cut them where we can to get to that point, but I think something around that point is going to be where the market price bottoms out at, so I prefer to be proactive about getting to the point where we can make that work for us.... although it does rely on us getting a fair amount of additional work in from it to make up for the lower mark ups per installation.

One other thing I'm bearing in mind here is that last year we were needing to build up money in order to pay for new tools, office furniture, office equipment, vans, and training etc which we don't need to do as we should be pretty much ok on that front for at least the next 6-12 months unless things start to seriously pick up.

 

[Gavin A]

I agree on the prices going up thing, which is a message I think we in the industry need to be getting across to the public as I think there's a lot of people potentially waiting for the market to bottom out. Essentially what I'm aiming to do is to bottom that market price out earlier, and say this is the price for the next 9 months, and we doubt it's going to get any better than it is now, and prices are more likely to increase than decrease over the next year or so once the over supply in the market ends (one way or another).

 

[SRE]

Well the nine months could be good news at least we'd have a bit of stability and maybe I need to sharpen my pencil again for costs. I'm just not keen on a base price + extras pricing policy but I know our one price for all isn't going to work now either so time for a fresh approach I think!