A few weeks ago, I was asked to contribute to a Sunday Times feature on Solar Panels and how the finances stack up. As with all financial reports when it mentions solar, journalists always think that they have to give readers a ‘a payback’ year as if it makes sense or can be a good guide to pricing for the earnest investor. And for the sake of newspaper contributions, I have gone along with them purely to give an indication, but also in attempt to explain a little more and to give reason to my argument that the payback conversation is one that need not happen for those serious investors.
I’ll tell you why.
Two families, next door to each other in semi detached houses. One a family of five who uses 8000kwh of electricity a yr and the other, 2 elderly people who use 3000kwh a yr. Their roofs are identical and can fit 10 panels on each and both want a battery.
Both spend £12,000 on a decent sized, mid range solar and battery system with hot water diversion.
Family one will use 90% of the energy generated, export 10% and then use the battery to smart trade in winter months as the ASHP kicks in. They could save up to £1400 a yr at todays’ prices. This figure will rise every time energy prices rise. This time two years ago, when energy prices were 42p/kwh and not the 28p/kwh we pay today, the same system in the same situation would have given an annual return of £2000. A -£600 difference in just two years.
The family next door might use 40% of the energy they generate and as they go to bed and turn everything off when it gets dark, they don’t bother smart trading with the grid as they always seem to have something in the battery and if it’s really cloudy, they don’t bother with the washing machine during the day and just use the economy 7 tariff they been on for decades. They try to live in the sun and save £450 a yr at today’s prices.
Both have totally different ‘Paybacks’ and a solar system cannot be valued or calculated with one stated or claimed. It’s both disingenuous and mis leading to provide one in general advertising and can only be given to the individual after a full consultation. No two families are the same when it comes to energy use, just ask your family and friends how many kwh a yr they use and they’ll all say something different.
Now for those who feel they need to know what their payback is, it really is easy.
Tell me what the unit cost of electricity will be in February 2031 and what the cloud cover will be like where you live on August 30th 2029 and how much water you’re going to put in your kettle and how many times you’re going to boil it, and I’ll give you your payback!
Solar generates energy. The more you use, the more you save. It’s as simple as that. We could go into the technicalities of force charging and force discharging a battery and what it does to the life cycle of the battery and calculate the replacement costs against what you’ve saved by ‘smart trading’ but will leave that to another blog….
Here’s the article from The Sunday Times, we’ll blog the content they didn’t include over the next week or so including some exciting news on a ‘pay as you save’ solar funding package we hope to introduce in the week or so.
#SolarLove in the #SolarNation