UKH

Solar panels vs stocks and shares

This topic has been archived, and won't accept reply postings.
 ablackett 26 Sep 2021

I’ve looked briefly and seen £4,000 to instal solar panels on the roof, seems a typical saving is around £200 per year.

If someone had £4,000 kicking around wouldn’t they be better off in the long term putting it in a stocks and shares ISA which would typically get significantly more than 5% growth?

Has anyone here considered this and still decided to instal them for ecological rather than financial reasons?

 S Ramsay 26 Sep 2021
In reply to ablackett:

5% for any isa would be very good at the moment. Solar panels are still a questionable financial investment though as their lifespan is not unlimited, manufactures claiming around 30 years. So you spend 20 years recouping the initial investment and then only get 10 years of actual savings, and that's if they perform as described which is not gaurunteed

1
 wintertree 26 Sep 2021
In reply to ablackett:

Unless you’re obsessive about when you use power or you spend more on a load shifting battery system you’ll struggle to actually save £200/year of electricity.

 ablackett 26 Sep 2021
In reply to S Ramsay:

> 5% for any isa would be very good at the moment  .

According to this the average return for the 21 years to April 2020 was 5.14%.
 

https://moneyfacts.co.uk/news/savings/as-savings-rates-fall-could-a-stocks-and-shares-isa-offer-better-returns/

 ablackett 26 Sep 2021
In reply to wintertree:

I assumed as such, I just can’t see how anyone makes the number add up to it being a good financial idea.

In reply to ablackett:

Because I’m a lazy get, I didn’t submit a reading in 12 months and did one last June. I’m getting about £50/panel/year. They face south west. North Wigan. And then I get the free eclectic. 
Edit: that account is weird, ignore the August thing, it was for 12 months (need to submit another next few days).  And I’ll leave the typo, free eclectic has to be worth a few quid!  And just realised that FIT payment was ditched few years back.

Post edited at 16:31

In reply to ablackett:

> Has anyone here considered this and still decided to instal them for ecological rather than financial reasons?

Yes, obviously.

If I was mostly interested in making money I'd be in the city working in financial services.

 mrphilipoldham 26 Sep 2021
In reply to ablackett:

Stick it all on Camber Energy and thank me later.*

*Not financial advice.

 ablackett 26 Sep 2021
In reply to Bottom Clinger:

As I understand it the feed in tariff changed the sums significantly in the favour of getting them.

In reply to wintertree:

> Unless you’re obsessive about when you use power or you spend more on a load shifting battery system you’ll struggle to actually save £200/year of electricity.

I've generated about £200 worth on a small 2KW system installed about six months ago.

Given that many residential systems have twice that capacity, I don't think £200 per year is an unrealistic target.

Coupled with an electric vehicle that can convert the surplus into mileage, and the sums start to look more attractive.

Nonetheless, I think anyone looking to save money by switching to renewables at residential scale is barking up the wrong tree. That's not my motivation at all.

 wintertree 26 Sep 2021
In reply to planetmarshall:

> I've generated about £200 worth on a small 2KW system installed about six months ago.

Yes; we generate about £450/year worth on a 2.4 kW system that's well situated, priced based on what we pay for electricity.

However.... That electricity is generated pretty evenly either side of mid-day and unless there happens to be pandemic on that's when the house empty, the lights are out, the oven isn't in use, the BEV is away from home not being charged the TV is off, nobody is vacuuming, and so on.  About the only thing we can do to make use of al that solar power is to set a washing machine load away on a timer before going to work.

I'm not questioning what the system will generate, but noting that for the OP to actually consume the electricity it produces and therefore reduce their bills by that £200/year they're going to need to work hard at actually consuming the electricity the panels make, because digital meters don't run backwards under export.

In the post-FIT era it's still possible to get an export meter and get paid (at much lower rates than the consumer cost) for exported power, but export meters cost and it doesn't work out beneficial for small arrays.

>  That's not my motivation at all.

Likewise for us it wasn't about saving money.

In reply to ablackett:

> Has anyone here considered this and still decided to instal them for ecological rather than financial reasons?

Sorry - I missed this part of your post.  I put an array in a year before the FITs went; I deliberately did not get the FITs as I view these as a regressive tax against the less wealthy, being applied to all electricity bills.  I can't deny they and similar schema abroad did wonders for moving things forwards but IMO they should have been funded from progressive general taxation and not from surcharges on an essential service.  (It seems a lot of the FIT installs were done by "we rent your roof " cowboys who did horrendous bodges to fit arrays as cheaply as possible then sold up lock stock and barrel to investment portfolios, leaving something of a maintenance headache; so as usual those least able to afford it are subsidising up the slippery pole.)

Part of the motivation was ecological, but it's also redundancy as with a bit of jiggery pokery we've got a system that provides a battery based microgrid in case of power outages, that can merge power from the panels for multi-day term operation, and with a bit more jiggery pokery from our BEV.  

Post edited at 17:17
 ablackett 26 Sep 2021
In reply to wintertree:

My initial post was clumsily worded, obviously people install them for ecological reasons. I suppose my question was has anyone installed them for financial reasons post FIT era?

1
In reply to ablackett:

We've just installed a 4kw system in a favourable (but not optimal), aspect.

Payback times are reduced if you work from home. Other considerations include battery storage - batteries come in various sizes.

New agile tariffs mean you can fill your battery overnight very cheaply, and use that power during the morning (showers, kettle etc....). Excess from your panels can be sold to the grid for a favourable rate during the day. 

In reply to wintertree:

> However.... That electricity is generated pretty evenly either side of mid-day and unless there happens to be pandemic on that's when the house empty, the lights are out, the oven isn't in use, the BEV is away from home not being charged the TV is off, nobody is vacuuming, and so on.  

Posted this a while back: you should charge batteries during the mid-day surplus to then run lights off at night that shine on your solar panels. Surprised no one else hasn’t thought of this... 

 daWalt 26 Sep 2021
In reply to wintertree:

> About the only thing we can do to make use of al that solar power is to set a washing machine load away on a timer before going to work.

Just curious, could you run an immersion heater through the middle of the day? heating up water, one way or the other, for one purpose or the other, seems to substantial part of domestic energy...

I don't have solar etc. but I'm keen know a bit more before things get critical

 MG 26 Sep 2021
In reply to ablackett:

Its possible to invest in solar panels without installing them on your property.  See Abundance website, for example. 

In reply to Bottom Clinger:

Its a good thought - but I've gone one better - set of rollers in the garden, dynamo powered front light shining on the roof - Solar power for the house as long as I want!

 stella1 26 Sep 2021
In reply to daWalt:

This is actually becoming a common strategy/feature on new inverters, if you have excess generation divert it to the immersion.

 Phil1919 26 Sep 2021
In reply to daWalt:

We had an optimersion installed with ours about 7 years ago. It heats the hot water tank continually which means this year for example, we haven't used gas since the beginning of April. We had to top it up this morning for 15 minutes using the boiler. You have to use the electricity you generate yourself to make it worthwhile now FIT payments have stopped. 

In reply to stella1:

In my previous house we did just this. The house had a wood burning stove for winter when we got bugger all from the solar PV and solar PV for summer (diverted to the immersion) when we didn't really want to light the burner. 

You could probably improve this with a heat pump instead of an immersion and make the most of the electricity you are getting.

 Moacs 26 Sep 2021
In reply to ablackett:

> As I understand it the feed in tariff changed the sums significantly in the favour of getting them.

Yes. I get just over £1 for each 6 units generated, with 50% assumed to be exported.  I have a clever box that knows when I am exporting and directs the energy into the immersion heater. 

Just on the payments it took 6 years and 2 months to recoup a 4kWp system, the saving on electricity I have used is on top of that.

So the FIT is pretty fundamental to the pure economics

In reply to Moacs:

The FIT scheme closed March 2019. Not sure what replaced, if anything? People with panels still get the payments as originally agreed when they signed up. 

 AdJS 27 Sep 2021
In reply to ablackett:

We’re thinking about installing a PV system and have been looking at the Energy Saving Trust calculator for working out likely costs/returns on a PV system.

https://www.pvfitcalculator.energysavingtrust.org.uk/

One factor that seems to have a big impact on the expected return is the estimated lifetime maintenance costs (two instances of £725 e.g. replacing the inverter or inverter components twice during the lifetime of the system at year 10 and year 20). Is this typical? Has anybody had any inverter problems?

It’s also surprising that a 4kw system in a favourable location might only generate around 3600 kWh/yr, i.e an average of 10 kWh/day. Does this match with people’s experience?

In reply to wintertree:

>... (It seems a lot of the FIT installs were done by "we rent your roof " cowboys who did horrendous bodges to fit arrays as cheaply as possible then sold up lock stock and barrel to investment portfolios, leaving something of a maintenance headache; so as usual those least able to afford it are subsidising up the slippery pole.)

There are stories about people not being able to sell their house, as the roof is 'owned' by a solar company. They have to buy out the contract, before they can sell. I'd check any small print, if one is going for a subsidised install.

 Jamie Wakeham 27 Sep 2021
In reply to ablackett:

I have a pretty big system (5.7kWp) installed under the old system.  It cost £11k to put in and the first five years of combined generation, FiT and bill savings was almost exactly £5k, so back then it was clearly a good financial move.

I do take Wintertree's point about refusing the FiT as a regressive tax.  OTOH it was put there as an incentive to early adopters to drive the price down - the reason you can now buy a system for around £1k per KWhp is that a decade ago people paid £2k or more per kWhp,  And I tend to pile the savings into other very green investments so I don't feel terrible about it!

Anyway: if you can buy a 4kWhp system for £4000, it will probably generate in the order of 4400kWh every year (a good rule of thumb is that a well positioned array will generate about 10% more units over a whole year than the peak power in W).  A deal like Outgoing Octopus will pay 5.5p/kWH for your export so you'd be looking at £240pa income.  

I manage about 35% self consumption, but I have an EV on the driveway in the daytime.  A reasonable target might be 20% self consumption?  If so, 80% of your units were sold at 5.5p but 20% displaced incoming power, which probably costs you around 13p?  That would mean your effective income over a year was (4400 x 0.80 x £0.055) plus (4400 x 0.20 x £0.13) = £310

Assuming Octopus never change that offer (not totally assured, I agree) then at the end of 20 years you have £6200.  There is no reason to imagine that the panels will fail, but it is not impossible you will need to replace your inverter at a cost of around £1000 somewhere in that period, so your outlay will have been around £5000.  That's equivalent to a rate of only around 1% (or 2.2% if you've been luckier and your invertor has survived).  However, at the end of this period you still have your panels and a pretty new invertor, and the income will keep coming...  

One thing worth mentioning is that in this scenario using a divertor to send excess PV to a water tank is pointless.  You're being paid 5.5p/kWh for export so using a kWh to displace a kWh of gas (which will be around 3.5p) actually costs you money.  Those diverters were never a good idea - they only ever make money for those on estimated export.

 Hardonicus 27 Sep 2021
In reply to dread-i:

On the flipside I bought a house with a 4kW system that was installed in 2011ish when the Labour government grossly over under estimated interest  and set the FiT way over market rate. I now enjoy >£2k per year in FiT payments (that up North too). Apparently one quarter of all FiT payments are going to those people who installed in the first 2 years of the scheme before the rate was cut.

I don't know how much it reduces electricity bills, but I've fitted one of those immersion diverters also so I don't pay for hot water in the summer either. I don't have any new fangled smart meters so they pay me on 'estimated export' which assumes 50% usage.

Post edited at 09:39
 Jamie Wakeham 27 Sep 2021
In reply to AdJS:

> One factor that seems to have a big impact on the expected return is the estimated lifetime maintenance costs (two instances of £725 e.g. replacing the inverter or inverter components twice during the lifetime of the system at year 10 and year 20). Is this typical? Has anybody had any inverter problems?

That looks pessimistic; a decent inverter should go for 15 years or more.  

> It’s also surprising that a 4kw system in a favourable location might only generate around 3600 kWh/yr, i.e an average of 10 kWh/day. Does this match with people’s experience?

Again, that looks a bit pessimistic.  My 5.7kWp array, almost perfectly South-facing in Oxfordshire, has generated an average of 6170kWh pa over the more than five years it's been up.  Mind you, what is very often described as a '4kW system' is actually 3.68kWp because that's the size beyond which you need to apply for DNO permission to feed back into the local grid.

In reply to dread-i:

> I'd check any small print, if one is going for a subsidised install.

I don't think those exist any more - they were only around at the most profitable period of the generation and feed-in tariffs.

In reply to ablackett:

I had a look into this. It really doesn't look like the easy win it used to be, and to me it feels like there are better places we could be paying to put solar panels than a grey English roof. It's easy enough to put the 4 grand into someone else's solar panels. There are plenty of renewable energy funds kicking about now. Like you say they should return better than having your own panels, and on top of the few percent per year you also get your 4 grand back and almost the same entitlement to sanctimony.

 jimtitt 27 Sep 2021
In reply to AdJS:

> We’re thinking about installing a PV system and have been looking at the Energy Saving Trust calculator for working out likely costs/returns on a PV system.

> One factor that seems to have a big impact on the expected return is the estimated lifetime maintenance costs (two instances of £725 e.g. replacing the inverter or inverter components twice during the lifetime of the system at year 10 and year 20). Is this typical? Has anybody had any inverter problems?

> It’s also surprising that a 4kw system in a favourable location might only generate around 3600 kWh/yr, i.e an average of 10 kWh/day. Does this match with people’s experience?

We run a 45kWp system and have lost two inverters ( from 10) in five years. The system has to be cleaned once a year at around €1200 a go otherwise dust kills it.

A relatively good system gets 1000kWh/kWp, poor is 700kWh, ours is optimal positioned (and in southern Bavaria and gets 1320kWh.

I've enough perfectly orientated roof on my house and barns for a 65kWp system, even at the horrific German electricity price ( 31c) it wouldn't pay for me to install, the feed-in wouldn't pay for it ( even if they allowed me to connect which iis unlikely as our region has a surplus of pv).  Even just enough for my own use doesn't work out financially, I, like many don't need much power during the day in the summer.

In reply to ablackett:

By the time you have factored costs for the stocks and shares isa @ £4000 I would question whether that is worth the effort.

You really need to be putting away £20k for the benefits to be worthwhile.

5
 Forest Dump 27 Sep 2021
In reply to Bottom Clinger:

Smart Export Guarantee Scheme

In reply to AdJS:

> It’s also surprising that a 4kw system in a favourable location might only generate around 3600 kWh/yr, i.e an average of 10 kWh/day. Does this match with people’s experience?

It depends on orientation, roof angle, panel efficiency and where you live. where I live (Guernsey, sunniest place in Britain) it's normal to get above the peak figure in kWh a year i.e. a 4kwp would do over 4,000kWh p.a.  The figures my local installer ( https://www.littlegreenenergy.gg/ ) quotes in their case studies pretty much match the predictions from the calculator here https://energysavingtrust.org.uk/tool/solar-energy-calculator/

For what it's worth, I had a quote to fit panels on the roof of my old house last year. We're out most of the day and had ~8p cheap rate for a couple of hours in the afternoon and overnight, ~15p other times, and ~8p FIT at the time. An 8kWp system would payback in 12 years and cost ~£12k for quality panels with 95% guaranteed output at 25 years and good corrosion resistance (maritime environment here). That's without me being able to make best use of the power.  Fitting a Tesla powerwall didn't make sense for us as we aren't able to make best use of it. 

Historically, the best logic was to fit a system that only just catered for your own demand so you didn't export anything (export rates didn't cover the cost of the panels, only consumption rates avoided did). Now that systems are cheaper and (for me) FITs are higher, exporting does make money. It was better for me to fill my roof with an 8KWp system than fit the 2kWp system that fits my demand.

I'd recommend anyone considering panels to get a quote due to the much reduced cost these days - someone's experience from 5 years ago for their particular situation isn't necessarily applicable to your situation.

The game changer will be EVs and smart charging controllers and using them as cheap rate storage. Tell your charge controller how much range you need the next day and it'll use the excess energy stored in the car battery at cheap rate to power the house at expensive rate. Many people would only pay for cheap rate power if they had this.  The FIT here is actually higher than cheap rate so it would even be profitable to export the cheap rate power stored in the night! The Powerwall already does this intelligent storage - it looks at weather forecasts to work out if it should expect to get input from your solar panels the next day, or if it should fill up with cheap off-peak mains power overnight.

Post edited at 11:22
In reply to Jamie Wakeham:

> One thing worth mentioning is that in this scenario using a divertor to send excess PV to a water tank is pointless.  You're being paid 5.5p/kWh for export so using a kWh to displace a kWh of gas (which will be around 3.5p) actually costs you money.  Those diverters were never a good idea - they only ever make money for those on estimated export.

Depends if you have gas, and your gas usage. Get rid of gas and you get rid of a standing charge for a start.

In reply to MeMeMe:

> You could probably improve this with a heat pump instead of an immersion and make the most of the electricity you are getting.

Surely that only applies in winter when your heating's on? Whereas immersion will be used in summer when it's actually sunny. The ideal would be both immersion and heatpump to make the most of the sun year round.

 Jamie Wakeham 27 Sep 2021
In reply to Toerag:

Why would you use an immersion (100% efficient) if you had a heat pump (250-400% efficient)?

In reply to Ivor_Cluesoe:

Oh hai

 wintertree 27 Sep 2021
In reply to Jamie Wakeham:

> Why would you use an immersion (100% efficient) if you had a heat pump (250-400% efficient)?

If you're using a diversion controller to prevent export of locally generated power, that has a very choppy output as it changes in response to step changes in local demand and rapid solar events (clouds etc).  Any electronics more advanced than a heater element is going to to get sad very quickly if you thrash it on and off like that.

(I use one not to prevent export but to keep the grid tie inverter happy when the house is in zombie-day mode, with a separate inverter/charger providing the base microgrid.  Alternatives to limit the supply from the grid tie inverter when needed aren't as simple as I thought they would be, as it has to have it's frequency/supply modulation settings remain within the DNO guidance unlike an off-grid only system )

Post edited at 11:27
In reply to Jamie Wakeham:

because a heat pump is overkill for heating water for taps in summer and isn't going to work effiently heating to tap temperature. For central heating, absolutely heatpump is king.

1
 Jamie Wakeham 27 Sep 2021
In reply to wintertree:

I'm assuming they aren't off-grid and can import to smooth over any dips in generation!

In reply to Toerag: 

If you have the heat pump just sitting there, it'll still be giving you between 250% and 300% for 50C water.  Why wouldn't you use that?

Post edited at 11:28
 wintertree 27 Sep 2021
In reply to Jamie Wakeham:

> I'm assuming they aren't off-grid and can import to smooth over any dips in generation!

Indeed, but unless the meter runs backwards (or import and export tariffs being equal), running a heat pump as diversion to prevent export forces you to run it up for quite some time.  Given how choppy local demand is - and supply on a day like today with high wind speed partial cloud cover - I can't see a heat pump "saving" the locally generated power very well. At least not without some sort of predictive supply and demand models to be proper smart about its timing.

 Jamie Wakeham 27 Sep 2021
In reply to wintertree:

I see what you mean.  But assuming a) you need to heat the water up at some point in the day, and b) you had both an immersion and a heat pump installed, then your options would be either to run the heat pump across the sunniest part of the day, or to use the diverter whenever there's excess PV to heat the immersion. 

I would expect that the efficiency gains of using the heat pump (even though this might necessitate some import) would likely be the cheapest option, as well as certainly being the lowest CO2 option.

In reply to jimtitt:

> We run a 45kWp system and have lost two inverters ( from 10) in five years. The system has to be cleaned once a year at around €1200 a go otherwise dust kills it.

What brand of inverter are you using that died in 5 years?

 wintertree 27 Sep 2021
In reply to Jamie Wakeham:

I think the cheapest option is going to depend very much on the specifics of the household's energy usage.

>  as well as certainly being the lowest CO2 option.

Absolutely.  

In reply to Jamie Wakeham:

> In reply to Toerag: 

> If you have the heat pump just sitting there, it'll still be giving you between 250% and 300% for 50C water.  Why wouldn't you use that?

I was thinking of the situation for someone who didn't have both, sorry.

 stella1 27 Sep 2021
In reply to Jamie Wakeham:

> In reply to Toerag: 

> If you have the heat pump just sitting there, it'll still be giving you between 250% and 300% for 50C water.  Why wouldn't you use that?

It would mostly be a controls issue, a lot of domestic ASHPs will have packaged controls which are very hard to integrate with third party devices, whereas an immersion heater is about as simple as it gets. 

In reply to AdJS:

> One factor that seems to have a big impact on the expected return is the estimated lifetime maintenance costs (two instances of £725 e.g. replacing the inverter or inverter components twice during the lifetime of the system at year 10 and year 20). Is this typical? Has anybody had any inverter problems?

You also need to consider removal & disposal costs for a PV array at the end of its useful life. At the moment there is no sensible way of recycling the panels and, as they contain Cadmium Telluride, they have to be treat as hazardous waste.

In reply to blurty:

Are you sure this is the case today? Just did a quick Google and it suggests over 90% of the materials in a PV panel can be re-used.

In reply to ablackett:

having watched the last 5-10 years of my mum's solar cells, she will at best break-even. They are not a good financial investment and the buy back rate for electricity is long term unreliable subject to pretty capricious policy. The best tactic is to use washing machine etc when the sun shines to minimise your grid use

However they might be a good idea for other reasons. Return on investment is only one aspect.

1
 Jamie Wakeham 27 Sep 2021
In reply to blurty:

That 'end of useful life' is a very long way away.  They are generally warranted to still be >80% efficient after 25 years - which means that manufacturers actually expect them to be doing better than that.  I have little doubt that my array will still be working long after I'm gone.

Eventually it might become unprofitable to continue replacing inverters when they fail (every 15 to 20 years).  But that point is going to be be many, many decades away.

 jimtitt 27 Sep 2021
In reply to Paul Phillips - UKC and UKH:

> Are you sure this is the case today? Just did a quick Google and it suggests over 90% of the materials in a PV panel can be re-used.

Currently about 96%. BUT thats the easy stuff, glass, aluminium etc. The nasty bits are left over as hazardous waste and the plastic thermally recycled or burnt as we call it.

In reply to ablackett:

I think an industry will grow up to recycle PVs eventually. At the moment I understand a typical domestic array costs £2.5 - 5K to take down and dispose of.

1
 highcathedral 27 Sep 2021
In reply to ablackett:

Diversification is key to rational investing.

I'm sure you know that just because Bitcoin/S&P500/FTSE100/equities in general have performed very well over the past few years, that doesn't mean they will in the future. 

Just because something likely won't make you 'as much' money, doesn't always mean it's not a worthwhile investment (even ethical reasons aside) for you.

 ablackett 27 Sep 2021
In reply to neilh:

> By the time you have factored costs for the stocks and shares isa @ £4000 I would question whether that is worth the effort.

> You really need to be putting away £20k for the benefits to be worthwhile.

I’m not sure how you are working that out. Plenty of funds charge a percentage of holding.

 wintertree 27 Sep 2021
In reply to blurty:

> At the moment I understand a typical domestic array costs £2.5 - 5K to take down and dispose of.

There's a thriving trade in used solar PV panels which I'd have thought would cover the labour costs of removing an old array, assuming the mounting system is going to be re-used. Places like Bimble seem to do a thriving business with used panels.

 ablackett 27 Sep 2021
In reply to highcathedral:

> Diversification is key to rational investing.

I’m ok with that idea, I’d question if putting £4k+ in a solar array with marginal returns is a sensible part of a well diversified portfolio.

What I’ve learned from this thread is that there are a lot of ways one can actively manage the output from solar panels, and that if one does, the returns can be improved, however there are significant unknowns including usage patterns and significant effort and cost to instal immersion heaters, heat pumps and batteries etc.


This topic has been archived, and won't accept reply postings.
Loading Notifications...