Solar power payback takes much longer than you think

[Radian]

The Gaurdian recently published a letter from a home-owner responding to one of their previous articles covering pack-back periods for solar PV. In his letter, Harry Noyes describes how his 4kW system has produced about 4,000kWh a year for the last 10 years and doubts the Gaurdian's estimate of a 7 year pay-back. Is he right or what's Harry doing wrong? Or do we have to make too many assumptions (e.g. what he paid for his system) to be able to comment?

[SteamyTea]

5 minutes ago, Radian said:

Or do we have to make too many assumptions

That is the problem.

 

I had to explain to a customer (when I was involved in domestic PV), in January, that the reason his system was not very good was because he insisted that it must be installed on the NE facing roof.

Was an IT professional, and a complete twat.

[Pocster]

15 minutes ago, SteamyTea said:

Or do we have to make too many assumptions

Exactly . 
Why everyone is concerned about ROI on these things baffles me . Suppose it’s 15 yrs or indeed 5 yrs . Does it matter ? . 

[Dave Jones]

I think solar without a battery is really losing out. As for cost, I look at the system just as i would a kitchen or bathroom. Our solar+powerwall is saving/earning over £10 a day for the last few months. Not counting the FIT. 

[SteamyTea]

37 minutes ago, pocster said:

Why everyone is concerned about ROI on these things baffles me . Suppose it’s 15 yrs or indeed 5 yrs . Does it matter ? . 

Not to the atmosphere.

But we have been conditioned to, as they say now, monetise everything.

 

[Dillsue]

59 minutes ago, Radian said:

Or do we have to make too many assumptions (e.g. what he paid for his system) to be able to comment?

Exactly this. "Pay back" depends on motivation for doing something, installing PV in this case. If youre doing it for green reasons then ROI may not be relevant with the reverse also being true. If you want autonomy from the grid then ROI might not matter much if atall.

 

How you use and maintain a PV system can have a big effect on ROI if thats what your focus is, less of an effect on the environment if thats your focus

[AliG]

The trouble solar has at the moment is the very low payments for exported electricity and the very variable output.

 

If I look at our system which generates around 4000kWh a year, this varies enormously by day and by season. Good days can be 20-30kWh, but the next day even in summer can be cloudy and wet and then generate almost nothing.

 

I think it works well in our system as we have a very high base use of electricity due to our pool. I think we will export a bit less than 1000kWh over the year, but if I look at my daily usage most of this comes on a very few very sunny days. It looks like I last exported electricity on the 11th of August.

 

When I consider putting solar into my parents' new house, their daytime use of electricity would be minimal, maybe just a 2-300 watts of steady demand, with spikes when they use the washing machine or cook. I struggle to see how I could actually offset more than 1000kWh a year of electricity use without a battery. Thus what might actually make sense is quite a small array 2kW ish. 

 

What I am really saying is that the payback period depends very highly on how much electricity you use during daylight hours in the summer. My mum is very tight so won't get anywhere near the payback other people might get.

 

If you can divert all spare production to DHW or charging an EV than the numbers look better. However, we use Octopus for this at night when prices are a lot lower, arguably you are only offsetting gas or low cost electricity with this generation. Better returns at the moment, but I am not sure I would value it at more than 7-8p/kWh in the long run.

 

Net net if you use 100% of the electricity generated it is probably worth around 15p/kWh, if you use half the electricity generated and export the rest it is more like 12p/kWh. Of course a couple of years of high prices before going back to normal would dramatically alter these calculations, but I would not use current prices for more than a couple of years.

 

So for the sake of argument if you assume £5000 for a 4kW set up with 3500 yearly generation then you are getting around 10% ROI. However, you might get close to 20% return for the next two years.

[Radian]

Another factor that appeals to me is the psychology of 'actively doing something positive' when otherwise being at the mercy of factors outside our control. It's impossible to put a monetary figure on that. The recent price cap hikes are killing the joy of cooking meals, having baths and watching movies, when all the while a meter is ticking away in the background. Mention is rarely made of the other uses the funds available for the installation might have. Foregoing a few holidays, for example, might cover the cost of a small system and restore the joy. Like holidaying at home.

[SteamyTea]

4 minutes ago, Radian said:

Like holidaying at home.

But you, like me, live in a holiday area. Where you going to go for a change of scenery and something different, Kiev.

 

6 minutes ago, Radian said:

actively doing something positive

And many of them don't cost much, driving more gently has made a huge difference to my outgoings.

[AliG]

Sadly I  am surprised how unreceptive most people are to the argument that they might want to save energy or in general reduce waste for the greater good. It drives me crazy how much recycling we throw out due to the enormous over packaging of things.

 

It is one of the few areas where I would argue for more government intervention, because people don't put enough value on externalities or long term issues so won't do anything about them themselves.

 

My in laws are American and I deal a lot with Americans for work. They have even less concept of this with almost all decisions being made solely on maximising your pwn personal utility at the current time.

 

I think we just have to recognise that this is how people work and try to work around it. We are unlikely to change human nature.

[Pocster]

14 minutes ago, AliG said:

We are unlikely to change human nature.

But that’s exact what we need to do . I remember when recycling started ( sorting glass , plastic etc. ) how hard some people found it . If we don’t change as a species we are (expletive deleted)ed .

Agree industry needs to up its game e.g excessive packaging .

I live in an affluent area . Houses around me 1 million + . I know some have good incomes etc. . How many pv panels can I see and batteries ? ;none , just mine .

Why is that ? . I assume they can afford it . Some have massive south facing roofs . But I guess they don’t care - just pay more for their electric / gas rather than do something…

Edited August 29, 2022 by pocster

[SteamyTea]

16 minutes ago, AliG said:

My in laws are American and I deal a lot with Americans for work. They have even less concept of this with almost all decisions being made solely on maximising your pwn personal utility at the current time.

 

I think we just have to recognise that this is how people work and try to work around it. We are unlikely to change human nature

We could charge, by the kg, for domestic waste collection.

A basic allowance if say 7 kg a week, then a £ for every extra kg.

If the price is low enough, it should not increase fly tipping.

 

A small token charge should be enough to change people's minds.

 

Packaging, in itself, is a good thing. How many unpackaged TVs would need to be made and shipped to get just one, undamaged one, in a house.

Trouble with packaging is the mishmash of materials and lack of recycling facilities.

[joe90]

3 minutes ago, SteamyTea said:

We could charge, by the kg, for domestic waste collection.

A basic allowance if say 7 kg a week, then a £ for every extra kg.

If the price is low enough, it should not increase fly tipping.

What would be the cost of running a charging system?, a lot of councils have already reduced rubbish collection to fortnightly.

[Dave Jones]

lets not forget electric cars and vehicle to grid, big capacity batteries. The ability to time shift demand to only every pay cheap rate is a massive money saver. 95+% of my bill is charged at 9.52p kw/h. I'm sure there is the possibility to arbitrage this with the octopus tariff which pays you to export.

[AliG]

29 minutes ago, pocster said:

But that’s exact what we need to do . I remember when recycling started ( sorting glass , plastic etc. ) how hard some people found it . If we don’t change as a species we are (expletive deleted)ed .

I guess that’s my point though.  People hated recycling (actually I quite enjoy it). They were forced into it by regulations otherwise many people still wouldn’t recycle. So it was government interference rather than people changing.

 

As mentioned the point of packaging should be that it’s more efficient to package things than deal with damage/spoilage. The two companies that really annoy me on this matter are Costco and Amazon. Costco love to take things already well packaged and put them in another larger box to sell a bigger quantity. Why not tape things together or make people pick up two to get a lower price. Amazon’s liking for putting things already in a box inside another much larger box is very irksome. Why not just stick a label on the original box.

[AliG]

34 minutes ago, pocster said:

 

I live in an affluent area . Houses around me 1 million + . I know some have good incomes etc. . How many pv panels can I see and batteries ? ;none , just mine .

I am well off but tight and do see that we can do things to improve the environment with little personal cost or indeed a benefit.

 

However, a large number of people think solar panels are ugly and care about that more than money, never mind the environment.  Lots of people are also too lazy to do anything. This applies to many things such as recycling, electric cars etc.

 

You either have to order people to do stuff (regulation) or make it so financially attractive that it overcomes their other instincts.

 

Almost universally everyone I know who has got an electric car in the last two years did it as a tax dodge. None of them give a hoot about the environment.

[Ferdinand]

3 hours ago, Radian said:

The Gaurdian recently published a letter from a home-owner responding to one of their previous articles covering pack-back periods for solar PV. In his letter, Harry Noyes describes how his 4kW system has produced about 4,000kWh a year for the last 10 years and doubts the Gaurdian's estimate of a 7 year pay-back. Is he right or what's Harry doing wrong? Or do we have to make too many assumptions (e.g. what he paid for his system) to be able to comment?

 

They put a payback calculation in the Graun? Ye Gods...

 

The original piece does contain uncorrected errors (start date of FiT are one).

 

And for the ones which have been corrected, the editorial processes of pf such high quality that the correction has been added twice.

 

Have a nice BH, everyone 🙂.

 

Harry does not seem to own up to the revenue he is getting from FITs as part of his payback calculation, nor to have considered divert devices.

[Onoff]

37 minutes ago, SteamyTea said:

We could charge, by the kg, for domestic waste collection.

 

Folk would just burn stuff in the garden.

[SteamyTea]

5 minutes ago, Onoff said:

 

Folk would just burn stuff in the garden.

They don't do that at the moment, and quite hard to burn a flowerpot, are old cooker.

[SteamyTea]

40 minutes ago, joe90 said:

What would be the cost of running a charging system?, a lot of councils have already reduced rubbish collection to fortnightly.

No idea, and if a LA organised it, then probably 10 times the cost, and it would still be a failure.

[AliG]

I actually think FiT payments should be reduced considering the current price of electricity. Instead they are index linked so will be increased.

 

Of course no one considered the price of electricity going up like it has but this is an unexpected windfall to people who are still receiving FiT payments. A simple solution would have been that the FiT payment reduces by 1p for every penny the price of electricity increases above 15p.

[Pocster]

30 minutes ago, AliG said:

I am well off but tight and do see that we can do things to improve the environment with little personal cost or indeed a benefit.

 

However, a large number of people think solar panels are ugly and care about that more than money, never mind the environment.  Lots of people are also too lazy to do anything. This applies to many things such as recycling, electric cars etc.

 

You either have to order people to do stuff (regulation) or make it so financially attractive that it overcomes their other instincts.

 

Almost universally everyone I know who has got an electric car in the last two years did it as a tax dodge. None of them give a hoot about the environment.

Fair points .

I always think PV function is more important than visual form . I must be one of those that had no tax dodge for an EV .

[Kelvin]

That’s partly why the tax dodge was put in. It doesn’t really matter why people change their habits as long as they do. 

[nod]

3 hours ago, Dave Jones said:

I think solar without a battery is really losing out. As for cost, I look at the system just as i would a kitchen or bathroom. Our solar+powerwall is saving/earning over £10 a day for the last few months. Not counting the FIT. 

Then why are they sap accessors still predicting just a few hundred per year return on a 10 system If yours is saving thousands 

[SteamyTea]

1 hour ago, Dave Jones said:

lets not forget electric cars and vehicle to grid, big capacity batteries. The ability to time shift demand to only every pay cheap rate is a massive money saver.

Not if you have to top up the vehicle during peak times.

I think V2G is for pensioners, not the normal working person.

A 7 year old Leaf will only go about 100 miles on a full charge, take half of that for a hot bath and keeping your house warm, then there is not enough left for most rural people.

Not as if we are all going to get a new EV with a 90 kWh battery, most will be sub 30 kWh.