I went out with the canvassers for a couple of hours last week to train up a new team member, and something that came up with people on the doors -at least 3 people in 2 hours- was that somehow, they’d ´missed the boat´ when it came to getting solar panels installed. According to this thinking, solar used to represent a good investment at some time in the past, but that -to listen to some people- this was no longer the case.
Of course, when you’ spend your days immersed in PV technology, designing solar systems and explaining the overwhelming benefits an installation by Ecotekk confers upon its owners, its easy to forget how much general ignorance there is of what savvy customers out there are achieving. Here are the brutal facts. Done properly, by a company that´s expert in both the design of the system, as well as its actual installation (and there is a crucial difference between the two aspects), and so long as they charge you a fair price, solar is absolutely guaranteed to make you better off, and not at some distant date in the future, but immediately, right here in the present.
A few important points: If your solar PV system is badly designed, it doesn’t matter if its installed correctly, you will still lose out compared to what you´d have gained if your system had incorporated more appropriate kit and superior design principles (there´ll be a separate post on this subject available in this section soon). Similarly, if its been poorly fitted, it wont work as it was intended to; and if you paid too much compared to what more honest expertise would complete the job for, you might end with a very well designed system that works great, but because the people who put it in grossly overcharged you, your rate of return is correspondingly diminished. So with these few caveats out of the way, lets look at the economics of solar PV from when theFeed in Tariff (FIT) scheme began in 2010, and what compare them with the present.
The FIT scheme legislated for qualifying home owners to be able to claim a fee for everything unit of energy they produced using certain green technologies. For owners of a photovoltaic micro-generation system, the rate was a whopping 41.5p per Kwh, plus an additional 3p for every other unit if they opted for deemed rather than metered electrical export back to the grid – so effectively 43p for each unit generated; and of course, there’s all the units of energy the customer doesn’t need to buy to consider. In an unshaded location, facing due south at a 30 degree inclination, here in South Wales, Solar PV will produce 900kwh per kilo-watt-peak installed. What this equated to in practice, was that an installation in 2010 in a favourable spot, would yield a financial return of around 2000 pounds, in just its first year, rising each year along with energy inflation and the retail price index to which the PV FITs were linked.
£2500 pounds a year was obviously a terrific sum of money for homeowners to be saving every year. But it does need to be seen in context. A few months before the FIT scheme was launched in the spring of 2010, I undertook training in photovaltics with the Grant Corporation (as far as renewable energy is concerned, it was solar thermal and air source, rather than PV, that Grant manufactured, but i´d already done a similar course with the organisers on solar thermal, which we actually sold even before installing solar PV, and so continued renewable energy training with them). A short time after competing the course, one of their reps came to my office in bid to get us to market and sell Grants products. Now, the prices for their solar hot water products -evacuated tubes, flat-plate collectors, solar cylinders, pumps, etc, was not too badly priced, and we went on to sell quite a lot of them. Their PV on the bother hand, would demand a wider and more vigorous search for additional suppliers: in the Grant price-book, 2009, a 4kwp complete solar PV installation kit, was listed at £29,999 RRP.
In the end, Grants PV products proved prohibitively expensive, and when we installed our first 4kWp system in the Spring of 2010 (straight after the FIT scheme launched) we sold it for 20 grand dead, making in fact, remarkably little . The customer concerned had an epic deal to get that kit – including what were then state of the art Austrian panels- for what was a relatively small sum of money then, for a brand new 20 panel solar PV installation. Needless to say, they were absolutely chuffed with what we’d done for them. The husband was a financial advisor (we get an awful lot of those), and for him this was just free money – better than ISA or share portfolio, and no tax to pay!
It is true, that solar panels and inverters did start coming down extraordinarily quickly not long after this. We were recommended by the aforementioned customer to one of his friends just around the corner, perhaps six months after we fitted the system for him, and ended up quoting this friend several grand less for a similarly sized array with much more complicated installation work (multiple roof-faces and inverters, lots of scaffolding and extra interior cabling work), and that was because we didn´t want to overcharge anyone and our procurement costs were coming down quickly. So there was, within the context of the fit scheme, an optimum window of about 6 months, during which prices had come down quickly and substantially from when the FIT scheme was launched, but before the coalition government announced that rather than the tariffs being subject to a planned and gradual reduction (for new customers) over 25 years, they would be slashed with just 6 weeks notice.
It’s possible that customers then might have bought a system for 13-14,000, which earned them 2 grand a year, if they had it installed during this brief window. What’s worth remembering though, is that If they got their panels a year before, they would have save a bit of on initially, but they’d have also recouped an extra 2 grand that those who put off an installation would have missed out on. Similarly, those that waited 6 months extra would have found that the coalition government had gutted the incentives for small scale clean energy, and because the tariffs represented the lions share of the overall benefits, this would have meant the same system installed after the reduction in FITs would only earn half the income that one installed prior to that date would. People who waited for too long for prices to come down, missed out doubly – they missed out on the higher rates as well as all the hours of possible energy generation that had been lost forever. The only real lesson to draw from this is that as soon as it dawns on you that a solar PV installation from Ecotekk will make you better off -no ifs, no buts, no maybes- dont waste any more time/money, get out booked in at the earliest opportunity. The sooner you do so, the better off you’ll be.
Moving on to the economics of solar PV in the present. You can still realise returns of over 10% of the cost of the equipment that you purchase – the precise numbers will of course depend on the specifities of your order and its location. Unlike during the bonanza days of the FIT scheme, however you don´t need 15-20,000 pounds to play in the game. The entry level costs are much lower .-Ecotekk can install a fully functioning PV system nowadays for as little as 6 thousand pounds, making the benefits of solar available to much more people, although its worth adding, that also unlike the FIT days, there’s no upper limit to how much kit you can install and still reap maximum benefit. Solar PV and batteries, simply put, are a money multiplier -the more kit you have, the more money you will earn- so it’s not a question of how much you want to spend, but how much you want to make.
Even if you dont have the cash to go out and buy a PV system and/or batteries, Ecotekk can finance them for you, and from as little as 5.6% for secured and 10.9% for unsecured finance, meaning you can use the savings from your electricity bill to offset the payment on the loan to pay for it, and if you spread out out sufficiently, get your new solar system installed and immediateley have more money left over each month or at the end of year, then before you got solar.
So thats the reality of the situation. For anyone who wants to make themselves better off, Ecotekk can absolutely guarantee to do that for them. So much so, in fact, that if you have ever considered solar, but been put off by the up front cost, the question you need to ask yourself really, is ¨how can I afford not to call Ecotekk?¨And what’s most important of all – there`s no time like the present. Every day without solar, you are throwing money down the drain. Yes, there’s been times in the past also, when solar has been financially attractive. But returns now are just as good as they ever were, and the sooner you get solar the more money it will make you in total. Furthermore, the technology is far more mature now, and the costs of equipment haven’t been falling for a long time – solar products pricing rising with inflation along with everything else these days- so delaying wont save you anything, but will undoubtedly cost a great deal. The economics today are as good as ever. And anyone reading this has it within their power to make themselves better off, just by giving us a call. The only thing you need to be asking yourself is ´what am I waiting for?´
This article was mostly written a few week ago but needed editing. Since then the international situation vis-a vis conflict and especially energy price hikes, only make what was already an utterly compelling financial case for getting solar panels, so clear cut, that however well off you are, you simply cant to afford to not get solar.