I’m paying to have a new set of solar panels, its happening while I write this, the installers are on the roof drilling holes and so far not having cups of tea, though coffeee was offered.
The installation is being paid out of my hard earned savings and in my view a more effective alternative to either keeping the money in the bank or ‘investments’. I’m expecting an 8% to 9% return on my capital outlay over the course of the next 20 years or so, that return dropping at the point my Feed in Tariff contract finishes though I would expect to keep generating electricity for some years after that.
Overall my £12,000 investment will repay a bit more than £20,000 at current rates. The FITs are inflation linked so my return will not be eroded by inflation. Keeping my money in the bank at say 0.5% will see a degradation of about 1.5% per year allowing for 2% inflation. Solar, with the Feed in Tariff is clearly a good bet.
Prior to going ahead with a paid for system I had looked very carefully at the option of a free system, I expect that my roof is South enough to comply with any ‘free’ requirements, however going through all the pros and cons it was clear that a paid for system was a better bet.
My concerns were:
- Its my roof, getting free electricity based on a fairly standard install of 2kW would save me about £100 a year.
- For the next 20 years, I cannot install my own system!
- Nor can any prospective buyer of my house
- That bit of roof is no longer mine to do with as I wish
- Insurance / Damage
While I am sure that much of this has been carefully looked at by the free installers and there is a lot of small print protecting each party, it wasn’t at all for me.
I also looked at a company offering leased systems, effectively a solar installtion that after 20 years you might own. Wow, all the downside of a free system and you pay for it! I covered this is greater detail here:
Solar PV leasing along with numbers, don’t go there!
While all the free and leased systems that I have looked at seem to have a reasonable business ethic behind them, just a bit too in favour of the installer, I am waiting for the real scammers to jump on this and how they will fleece people who usually tend to be older and trusting.
The Sunday Times 10/10/10 page 27 identified a clear scam. Free solar panels, but you have to pay for a survey to see if you are eligible. I doubt that there is any chance of any free solar panels being installed, especially when the ‘survey’ costs £2,500!
I can see more of these free solar scams coming on stream, perhaps a fixed annual rental, maybe an upfront bond re-payable over the years – but not when the company goes bust and re-starts with a new name and same scam.
My standard advice when considering solar thermal and PV.
Solar thermal will only heat your hot water, it won’t heat your house. At best it will provide 70% of your hot water, it shouldn’t cost more than £4,000 and you should use an MCS accredited installer in order to get the RHI when and if it is introduced.
Solar PV will cost about £12,000 or less for a medium sized system of 2kW, less than £19,000 for a 4kW system. The return should be in the order of 8%
(2012, prices have fallen and you should be looking at less than £10K for a 4kw system, the returns remain the same or better even with lower FITs)
You will never have to pay for a survey from a legitimate supplier
Never use a supplier / installer who will not discuss prices prior to a visit.
Installers who insist on sending a salesman prior to even talking about a price will be looking more at what you can afford, less at what the system costs.
As to who is installing my system – solarUK