PV panels, are they a good investment? A personal experience

Moving house has been hectic and since then I have been so busy that I have not found time for blogging. There is still much to do but now it is mostly work outside and, since the weather has changed for the wetter, here I go again…

Our new house has a south-facing roof; perfect, I thought, for solar panels. I started researching suppliers and costs and found lots of advertising blurb but not much genuine user experience so I am sharing my experience so far.

The design of the roof is such that there is room for only 8 panels without it looking very untidy. Consultation with the Planning authority was not straightforward. I thought that it would just be a case of telling Planning what I wanted to do and them saying OK. Not so. The Planning Portal website (http://www.planningportal.gov.uk/permission/commonprojects/solarpanels/) states that under certain conditions PV panels are “permitted developments” and there is no need to apply for planning approval. But when I told the Council what I was planning, just to be safe, and that I had convinced myself that everything I was doing was within the terms of the “permitted development” I was told that the only way the Council would consider what I was doing and comment was for them to consider the details and, if it was within the conditions, issue me with a “Lawful Development Certificate”. They could do this, but it would cost me £172. I decided to do without!

Finding a contractor was quite easy. Before we moved I went online and had several quotes for a standard 4kw system, rather larger than I could put on this house, and there was not much to choose between them. Then, after I moved, I looked on the Which Local website and was very impressed with the recommendations for a local contractor NGPS Ltd. After a visit from them, I got a quote. It seemed reasonable and I accepted. The 8 panel system cost £3900.

The panels are Phono Solar monocrystalline 260 watt and each has its own inverter. The work was conducted very quickly and the workers were very approachable and tidy. I could not find fault in any aspect of the job.They helped fill in the forms for the “Feed in tariff” and set up my computer so I can monitor the panels’ performance, continuously if I so want.

So is it worth it? Well there are three ways of recovering the investment

1. The “Feed in tariff” (FIT) is an index-linked payment paid quarterly based on the amount of electricity generated. This is currently paid at 14.94 p/kWh (kilowatt hours are the standard unit used). The production of electricity is monitored by a separate meter and readings are submitted quarterly to the FIT payer which is one of the electricity companies. Curiously, this can be any company you choose.
2. The export tariff currently 4.64p/kWh. This is for electricity generated and not used in the property, so exported to grid. With our system, and many others there is no direct measurement of this, so it is estimated as half the total generation.
3. Using the electricity you generate to power things. This electricity is free so there is a saving on electricity you would otherwise pay for. Currently we have a fixed tariff at the fairly low rate of 11.31 p/kWh.

If you use electricity during the time when the panels are generating, the free electricity is always used first, but this usage is very difficult to estimate. For the purposes of calculation there are however two easy bounds; I use none of it or I use 100% of it.

For every kWh of generation I will be paid 17.26p (14.94 FIT plus 0.5*4.64 export allowance). If I use none of the generated electricity this is all the return I get. If I use 100% of the electricity generated I will get an effective payment of 28.57p (17.26 plus 11.31).

Since installation, there have been 15 full days of use (October 11th to Oct 25th) and this has resulted in 75.8 kWh of production. At this rate the cost of the installation will take between 11.0 years and 6.4 years to fully recover the cost. I do not know if these 15 days have been “typical”. I will be following production over a longer period but this time of year is probably about average for day length and sunshine. Obviously, there are many other factors that will change these simplistic estimates.

On the positive side, ie. making my calculation rather pessimistic, I have not allowed for inflation. But inflation in energy costs, which seems pretty certain, will make the return for the “free electricity” better, and the FIT is index linked so this can be expected to increase also.

On the negative side, I have not made any allowance for possible future maintenance but I have a 6 year guarantee on the installation, a ten year warranty on the panels, and a 25 year guarantee on the microinverters. The panels are warranted to provide 80% or more of their output for 25 years.

Impossible to quantify is the feeling that I am doing something to make my life more sustainable and it makes sunny days just a bit more welcome.

On balance, I feel this has been a good investment and provided you have a south-facing roof and you do not need to take out a loan to pay for them I think it would be a good investment for others. But at least I have presented some specific details so others can make their own decisions. Maybe I should also point out that I have no vested interests involved.

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