solar quote question - estimated return on investment timescale.

[Octopus]

with a ROI of about 8 years that sounds OK to me

You can't include interest "lost" ............... and how did you get a return of about 5% - that's rather high!

 

[jouleflow]

jouleflow, what size system do you have.

15kW capped to 4kW max export.

 

[jouleflow]

jouleflow, what size system do you have.

15kW capped to 4kW max export.

I don't think there has EVER been such a short payback on PV,I thinks 7-8 years is/was about right.
If that's what the salesman quoted, I would like to see his figures
You should have a written quote with certain figures like fit returns and electricity saving along side the full cost of the system that he has used to come to the break even time.

Thanks Gary K.
I can't publish the quote, but the figures are:
15kW system £17 000
Annual yield 13837 kWh
Average annual roi 29.49%
Year 1
fit - £570.09
export - £339.70
savings - £2037.50
Full payback in year 4.

 

[Gary K]

How does he calculate savings of £2037?
If you managed to offset the whole of the systems output from the cost of your electricity it barely comes to that?
13837 x 15 pence =£2075

I have used 15p as the cost of a unit.
Unless you are living in a mansion with a swimming pool or using an electric pottery kiln, I would be surprised if you use that much leccy! Obviously when you are using most of your electricity in the evening the sun is not shining.
But then again if you have a roof large enough for that, then you may live in a mansion!

 

[plugsandsparks]

I get 3.3% for any of my savings which offset the mortgage interest rate. The house can be viewed as an investment where i have borrowed the money so any ROI on my house has to included all the interest i have paid as well as the capital. You appear to have reduced your savings to buy solar, by reducing your savings you have higher mortgage interest to pay, so in simple terms solar had to outperform your mortgage interest, otherwise whats the point. This is nothing to do with a solar company though, this is your own personal investment planning.

 

[Gary K]

15kW capped to 4kW max export.

Thanks Gary K.
I can't publish the quote, but the figures are:
15kW system £17 000
Annual yield 13837 kWh
Average annual roi 29.49%
Year 1
fit - £570.09
export - £339.70
savings - £2037.50
Full payback in year 4.

Someone's maths seems to be a little off!
570.09+339.70+2037.50=2947.29
2947.29 x 4= £11789.16
or am I missing something?

 

[jouleflow]

I get 3.3% for any of my savings which offset the mortgage interest rate. The house can be viewed as an investment where i have borrowed the money so any ROI on my house has to included all the interest i have paid as well as the capital. You appear to have reduced your savings to buy solar, by reducing your savings you have higher mortgage interest to pay, so in simple terms solar had to outperform your mortgage interest, otherwise whats the point. This is nothing to do with a solar company though, this is your own personal investment planning.

Our money came from our offset mortgage account that holds our pension lump sum so it wasn't borrowed but does attract the exact rate as our mortgage.

I understand that regardless of where the money comes from, if you keep it then you can get interest on it. If you spend it then you lose that income. If you borrow it then there is a cost involved. The company who sell the installation don't mind where it comes from & that is fine. All I believe is that there are two possibilities - keep it or spend it & I am just comparing the bottom line of each choice.
Keep it and gain interest but pay for all electricity.
v/s
Spend it and lose interest but get reduced electricity bills.
That is how I compare two investments - the difference in the money gained / lost.
It is up to the individual how they look at comparing the two options, I choose to compare the bottom lines of each. If people see it how I do, then they can make their own decision, it is just another factor to consider.

 

[Octopus]

^^ clutching and straws spring to mind

 

[jouleflow]

Someone's maths seems to be a little off!
570.09+339.70+2037.50=2947.29
2947.29 x 4= £11789.16
or am I missing something?

Don't I know it, as they say always read the small print, no such thing as a free lunch etc..

 

[jouleflow]

with a ROI of about 8 years that sounds OK to me

You can't include interest "lost" ............... and how did you get a return of about 5% - that's rather high!

But I was quoted 4 years lol.

 

[plugsandsparks]

I agree with you, i often get asked if i want to take finance out on a car, i ask "is it less than 3.3%" - they say "No" - so i say forget it, i will pay cash.....
In the good old days of solar, i believe it actually made a return even after borrowing the money from the bank, not sure if thats still possible

 

[jouleflow]

Someone's maths seems to be a little off!
570.09+339.70+2037.50=2947.29
2947.29 x 4= £11789.16
or am I missing something?

I thought it may be a good idea to get my accountant to check the quoted figures. The first thing he spotted was exactly the same as you saw - the annual benefit compared to the 4 year payback ( actual figure 29.49% - 3 years 4 months ) With the price at £16585 the annual return must be in excess of 25% around £4200. The quoted annual benefit is only £2947?? so I will await my accountants calculations to see how this works.

With solar, it is impossible to gauge the actual return to the quoted estimated return until at least a year has passed. So are there any special terms attached to this type of purchase? Can you pursue exaggerated claims 12 months after installation?

 

[jouleflow]

Not quite a year yet but have just received my previous 12 months statement from Eon & saved the grand total of...........£187 .

I have a spreadsheet prepared to enter the actual yield etc for a more accurate comparison. I will post it once prepared. Can I attach a spreadsheet to a post?

 

[Octopus]

Not quite a year yet but have just received my previous 12 months statement from Eon & saved the grand total of...........£187 .

I have a spreadsheet prepared to enter the actual yield etc for a more accurate comparison. I will post it once prepared. Can I attach a spreadsheet to a post?

Not sure about spreadsheets, but pdfs and photos deffo

 

[jouleflow]

I have attached a spreadsheet with various tables. Hope it makes sense.