If, say under a rock I found £10,000 and it were now totally mine, would I be in a better off position after 10 years, finding an average managed investment fund to stuff it in (SIPP) and watch it grow, or spending it now on solar cells with hope that I've made back the capital and some? ...
Probably so many open ended variables in that one. ;-)
Way too many variables...
One thing to bear in mind is inflation: the SIPP will give you a return from which you have to deduct inflation to work out the real-terms figure. The energy from solar is to some degree index-linked: a kWh from the panels in
10 year's time will likely be more in absolute-pence than a kWh returned today. So the 'savings' will track (energy) inflation.But OTOH spend £10k on panels and now you don't have £10k, whereas £10k in a SIPP is still £10k even if it grows at 0% (but it could grow at -100% if you invested badly). In other words the panels don't just have to pay back their own cost, they have to make an income comparable to what you would have got in the investment.
OTOOH once paid off the panels will generate 'free money', ie you can withdraw £10k from the fund and the panels will continue generating for ~25 years with zero capital invested, beyond a bit of maintenance. You can then invest that £10k in your SIPP and have both.
I suspect the economics are going to depend a lot on the cost of installation and the marginal cost of electricity you would be getting, either as export or in reduced import. You can control the costs but you can't control energy futures.
Theo
I used a calculator on the Boxt website. It showed a system costing £9.5k and providing £77 per month savings in electricity. I have no idea whether that is reasonable.
However, it doesn't look like a wonderful investment. Over 10 years, the system would provide a saving (at 30p/ kwh) of £9.2k, ie £300 less than the installation cost.
I imagine that after 10 years the system might need a lot spending on it.
Electricity prices may go up, but fuel prices are starting to drop again after doubling after the Ukraine war started, so I would not bank on electricity prices being higher in 10 years time.
IMO it's only worth doing if you believe it is really green to do so. I suspect that the calculations and variables in establishing that are more complex than the workings for financial benefits.
Well in my case investment funds, carefully selected, and changed at long intervals have netted me a bit over 10% p.a.
It does however vary. Covid was wild, and so was post covid.
The only people who profit from solar are the manufactures/installers. The owners break even and the rest of us pay in higher electricity prices.
There's definitely *some* element of economic return, but nobody's ever going to nail the exact amount. So it's not purely 'green' - but there's certainly a return there too. FWIW, here's the economic breakdown I was given:
No, householders potentially benefit too.
You've yet to explain how that happens.
I am surprised I need. to. The 'green' charges on your electricity and tax bills are around £1000/yr per household. These go to pay for 'renewable energy' subsidies and the other upgrades necessary to accommodate it.
I.e your car tax goes up so leccy cars, which don't pay tax, can look cheap. Windmills do not pay for the grid upgrades necessary to push their occasional energy from Scotland to London. You do. Neither do they pay for the battery storage needed to stabilise the grid when the sun goes behind a cloud, or the wind drops suddenly.
Renewable energy is enormously expensive to make reliable. And we all pay for it in one way or another.
I think they're including a battery in that calculation? When I do it without battery, I give it the max 20 panels and it comes in at £6901 upfront and a 'return' of £119 per month. For my usage it suggests 10 panels at £4711 returning £62 per month. So payback times 5-6 years.
[I should say I tried their EV charger quote thingy and it comes in at £1200 for a 0-5m cable to the consumer unit and £1700 for a 25m cable so I am highly doubtful of their quoting - 25m of T&E doesn't cost £500. Both of those figures sound pretty excessive to me]Not really. Maybe a new inverter, which is a few hundred pounds. And annual cleaning - buy a window cleaning pole and DIY.
The panels are guaranteed for 25 years and let's say you need a £500 inverter in that time. Based on their 20-panel 'return' figures (taken with a big pinch of salt), your outlay is £6901+500=7401, your return over 25 years would be 119*12*25=£35700. Efficiency may drop off a bit so it could be worse than this, but gives you an idea.
Subtracting out the £7401 you paid upfront, total 'growth' is £27299. Over
25 years that's 5.5%pa, but that will also be (energy price) index linked.If you could do a DIY install for half the price (£3700) then that would be
9%pa.If you can't consume at the time of generation then you either get an export tariff or need a battery, which changes the economics quite a bit.
General inflation will still be a thing, eg if it stays at 4% then things would cost 50% more after 10 years. The panels will always return 'today's' cost of electricity, not the cost at the time they were installed.
TBH I think though the competition is always going to be the solar farm down the (metaphorical) road. Their install costs will be much lower - if we stop linking energy prices to the cost of gas, as some smart tariffs do, then when you are generating they will be generating, and it may be cheaper to buy their generation than to have your own.
Theo
Do you have a source for that? 'Green levy' seems to be about £150/household according to a google search . . .
The general taxation contribution is far more opaque and involves things like insulation - and looks to be ditched anyway.
But any such charge doesn't subsidise domestic solar.
There's no direct - or so far as I can see - indirect subsidy for domestic solar. Just zero VAT.
Car tax doesn't subsidise electric cars directly. It doesn't even pay for roads directly - all tax goes in a big pot (revenue receipts), which is then given out according to policy. Far and away the largest head of expenditure is pension payments.
So, car tax linked to cheap electric cars is a distraction - that's a government policy decision (informed in large part, admittedly, by car manufacturers and energy cos). And a tiny proportion of tax receipts.
Anyway, I and most others don't have an electric car.
No idea where you're going with that - this thread is about household solar.
Domestic solar is pretty tried and tested. For some reason my estimate has a £1250 per 5 years maintenance payment - I'm not sure what that's for.
A lot of this is built in to the quote I got from an MCS installer:
<font color="#000000">It didn't come with any explanation though
Sorry - that address got mangled:
It's very opaque. Deliberately so
Beware the greenspin sites.
I used to make calculations like that for a living, and the results are terribly sensitive to the assumptions made.
For example, the figures allow for increasing energy prices, but no increases in the "replacement costs" figure of £1250, which is shown as constant over 25 years. Even if parts costs do come down the labour element will go up with wages generally.
An even bigger flaw is that there's no attempt in the calculations to discount figures many years in the future. So, each £1 of the £8500 installation cost is treated as having the same value as each £1 of the projected £2570 benefit in year 25. That's nonsense, as there's likely to be a lot of inflation over the 25 years. Indeed, the figures allow for a fourfold increase in energy prices over that period.
It would be a lot of work to correct those figures so as to see whether there is actually any return for the householder.
No reason why it should do.
And other more reputable sites say it's nearer 8% of bills:
Beware of those taken in by fossil fuel propaganda.
I'm going to guess you mean solar pv, not solar thermal. It's not straightforward to make such systems pay back well, but there are carefully designed cases where they can. You'd have to analyse your proposed design to see how it would perform, and find 1 or more ways to get it to pay back better than typical. If you don't do any of that then you're likely to break even or lose money.
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