Upay back time?

[Anthony_wayne]

Hi, my sister is looking into getting a 3-4kw system installed before August. I was wondering what the payback time would be on the 21p tariff? Is it worth the £6-7 thousand pounds it'll cost her? House is s-e facing.

 

[jason121]

payback is just short of a £1000.00 a year so looking between 6-7 years and electric prices will continue rise
so still a good investment

 

[Anthony_wayne]

Cheers pal, I always thought it was about 10 yrs on the old tariff so weren't so sure on the latest tariff. Though I suppose installation has come down as well.

 

[jason121]

thats for a 4kwp system depends on price for your area and quality of equipment

 

[FB.]

Very big difference between 3kW system and 4kW system; 7kW is a good price for 4kW, but nothing remarkable for 3kW (which is equivalent to £9.3k for 4kW and is what I paid when 43p FiT was available).

3kW system facing SE or SW (therefore not quite optimal) should generate about 2500kWh per year.
Worth:
£525 in FiT payments.
£39 in Export Tariff payments.
£100 in bill savings (assuming one-third of power is used on-site: the erratic generation of solar means thats it is very difficult to use the huge amounts of power on sunny days, while on dull days there is only a trickle of power enough for a lightbulb and a TV).

So total annual benefits from 3kW system would be around £664.
4kW would be around £885.

But crucially, when compared to other "investments" (cash, bonds, shares, property), you have no chance to ever sell the solar array to "get your money out". So the money must be "written off" over the lifespan of the system. I allow 1/25th deduction per year, since 25 years is the FiT duration. Some argue that the solar array will still generate power in year 25 and they are probably right, but it will still require occasional repairs (and one or two new inverters) which the 1/25th deduction can also be considered as a reserve from which to pay for repairs sufficient to keep the system running well.

So 1/25th of £7500 is £300 per year.

Deduct this from the £664 (3kW) and £885 (4kW) for a £7500 price paid and you get:

3kW = £334 profit per year = 4.5% return on £7500 outlay.
4kW = £585 profit per year = 7.8% return on £7500 outlay.

These numbers are also inflation-linked, so the benefit will rise gradually each year (the annual profit will probably be twice as great after 20 years of inflation boosts the FiT and electric prices). FiT payments are increased in-line with inflation and there will be gains as electricity prices tend to rise over longer periods of time (although the benefit is unknown in advance; the price per kWh I pay has fallen by 5% in the last twelve months, while RPI inflation continues to fall as demand for oil/energy declines as the world slides back into recession and the hum of factories goes silent, reducing the demand for power).

 

[alarm man]

Hi, my sister is looking into getting a 3-4kw system installed before August. I was wondering what the payback time would be on the 21p tariff? Is it worth the £6-7 thousand pounds it'll cost her? House is s-e facing.

remember,its not about the money,its about being green and saving the planet..

 

[Worcester]

Whover has quoted the £6-7k, should have already provided that information to her. Factors that influence payback time are:

1) Initial Cost
2) How much you currently pay for your electricity
3) Fuel price and general inflation
4) How much you will consume of what you generate (** most people overestimate this by a long way, it depends upon size of system, wether you are home all day, your base load etc)
5) Your current or future EPC rating.
6) Roof slope and roof orientation
7) Any shading issues
8) Size of system
9) Where you are in the country

Having said that check out this calculator: Solar Energy Calculator / Solar panels (PV) / Generate your own energy / Home (United Kingdom) - Energy Saving Trust

 

[jason121]

Worester bet your a blast on a Saturday night out

 

[Anthony_wayne]

Thanks for your help guys. I think she was quoted a few figures with regards payback time etc but I thought they sounded too good and were more biased in favour of getting panels rather than honest figures due to coming from a seller who's probably on commission.

 

[moggy1968]

always ask if you can speak to some of their former customers. You can then quiz them about wether their installation is on target to achieve what they quoted, and wether the company is any good. You can also check yourself online.

Any figures anyone gives you are pretty meaningless to be honest, they are too open to manipulation and the SAP calcs don't give any panel specific data.

Best is to speak to people who have systems installed already, but remember to halve the FiTs payments if they are on the 43p rate (45 I think now)