Financing 12k over 10 years, for solar PV?
Discussion
I am trying to work out the best way to suggest financing for customers interested in domestic PV ( solar ) schemes. All I want to do is sell the equipment & install it.
eg:
To install 3.5 Kw of solar PV would cost the punter ~ 12K
The customer will recieve about 43p per generated unit from the PV. Yield estimates are around 900 KWh per KW installed, so 3.5 x 900 x .45 = £1400 per annum in recieved monies from the feed in tariff. The feed in tariff is RPI linked, and guaranteed for 25 years from date of commisioning.
In addition to the feed in tariff monies, they will reduce thier yearly electric bill by 3.5kw x 900KWh x 0.09p = £283. ( 0.09p is thier estimated rate for electricity ) Consider this saving RPI linked as the cost of electricity will always rise?
If they manage to export any of the generated power to the grid, they will recieve 0.03p per unit, but for the purposes of the calc I am assuming they can absorb all power on site, I am targetting small commercial.
Lets say they have 12K lying about and want to finance this themselves. The total annual payback from the PV is £1683. Divide this into 12K and you get a payback of just over 7 years. As an industry standard figure this is a bit low, but stick with it for now.
If you are still awake, what finance options are available to say a shrewd domestic customer, or small business to ensure that the 12K install costs are paid for after say 10? years, while all the while they have negated approx £300 from thier yearly energy bills.
When the financed 10 year payback is over, its game on, they will earn everything from the feed in tarif and potential savings from buying electric from the grid?
TIA!!!
eg:
To install 3.5 Kw of solar PV would cost the punter ~ 12K
The customer will recieve about 43p per generated unit from the PV. Yield estimates are around 900 KWh per KW installed, so 3.5 x 900 x .45 = £1400 per annum in recieved monies from the feed in tariff. The feed in tariff is RPI linked, and guaranteed for 25 years from date of commisioning.
In addition to the feed in tariff monies, they will reduce thier yearly electric bill by 3.5kw x 900KWh x 0.09p = £283. ( 0.09p is thier estimated rate for electricity ) Consider this saving RPI linked as the cost of electricity will always rise?
If they manage to export any of the generated power to the grid, they will recieve 0.03p per unit, but for the purposes of the calc I am assuming they can absorb all power on site, I am targetting small commercial.
Lets say they have 12K lying about and want to finance this themselves. The total annual payback from the PV is £1683. Divide this into 12K and you get a payback of just over 7 years. As an industry standard figure this is a bit low, but stick with it for now.
If you are still awake, what finance options are available to say a shrewd domestic customer, or small business to ensure that the 12K install costs are paid for after say 10? years, while all the while they have negated approx £300 from thier yearly energy bills.
When the financed 10 year payback is over, its game on, they will earn everything from the feed in tarif and potential savings from buying electric from the grid?
TIA!!!
Mr lou...
Design life of PV modules has to be 25 years, inverters to change PV DC to grid are being offered with 10 year warranty. The whole industry is designing and supplying kit with 25 years of feed in tariff in mind.
GTIR..
Sales pitch, honestly, no. If somebody wants info on PV I will help out. You won't see any contact details for me on here, I have enough self financed large commercial schemes to keep me busy, but these are thinning out, hence the domestic/ small commercial market.
Up till a few weeks ago I was working on design for UK PV farms up to 5Mw in size, but now the recent feed in tariff consultation has announced the liklihood of these large schemes being pulled, I have to explore alternatives.
Don't read anything into it that isn't there, I am merely after ideas for viable financing options to suggest to customers that don't have 12k in thier back pocket.
cheers
Design life of PV modules has to be 25 years, inverters to change PV DC to grid are being offered with 10 year warranty. The whole industry is designing and supplying kit with 25 years of feed in tariff in mind.
GTIR..
Sales pitch, honestly, no. If somebody wants info on PV I will help out. You won't see any contact details for me on here, I have enough self financed large commercial schemes to keep me busy, but these are thinning out, hence the domestic/ small commercial market.
Up till a few weeks ago I was working on design for UK PV farms up to 5Mw in size, but now the recent feed in tariff consultation has announced the liklihood of these large schemes being pulled, I have to explore alternatives.
Don't read anything into it that isn't there, I am merely after ideas for viable financing options to suggest to customers that don't have 12k in thier back pocket.
cheers
They rely on self finance, and a payback within 7-10 years.
Once it's paid for itself it becomes an asset to the property. You go to buy a proprty with 10 yr old PV, you will get a sizable chunk off your electic bills and nearly £400 a year ( at todays rate ) for the next 15 years.
Even if it hasn't paid for itself, it is still an asset, it's just more complicated to adjust the estimated house price. Estate agents will have a trauma, which in my book can only be a good thing.
Once it's paid for itself it becomes an asset to the property. You go to buy a proprty with 10 yr old PV, you will get a sizable chunk off your electic bills and nearly £400 a year ( at todays rate ) for the next 15 years.
Even if it hasn't paid for itself, it is still an asset, it's just more complicated to adjust the estimated house price. Estate agents will have a trauma, which in my book can only be a good thing.
I'm sure the output figures these PV installers give are based on max output or near enough and not the real world figure. The installers carry out the feasibility studies and the report back "Yes government body/quango it will work. Now give me my subsidy thanks very much" cherching.
Stick to hot water vacumn tubes I say.
Stick to hot water vacumn tubes I say.
numberjack 4 said:
Mr lou...
Design life of PV modules has to be 25 years, inverters to change PV DC to grid are being offered with 10 year warranty. The whole industry is designing and supplying kit with 25 years of feed in tariff in mind.
you have just said the the inverters only have 10 yrs warranty then you say Design life of PV modules has to be 25 years, inverters to change PV DC to grid are being offered with 10 year warranty. The whole industry is designing and supplying kit with 25 years of feed in tariff in mind.
"The whole industry is designing and supplying kit with 25 years of feed in tariff in mind."
make your mind up please
bit of a sounds too good to be true to me
GTIR,
Any figures given by installers are based on years of meterolgical data, and are checked by the bods that oversee PV installers by law, much like corgi.
If you want PV, you will not be able to claim the feed in tariff unless its surveyed and installed by an acredited company, and signed off in accordance with these terms.
If an installer gets caught selling PV on a north facing roof behind trees they are kicked out..
Any figures given by installers are based on years of meterolgical data, and are checked by the bods that oversee PV installers by law, much like corgi.
If you want PV, you will not be able to claim the feed in tariff unless its surveyed and installed by an acredited company, and signed off in accordance with these terms.
If an installer gets caught selling PV on a north facing roof behind trees they are kicked out..
GTIR said:
This sounds like a sales pitch to me. 
Other Installers may be available......
I do a lot of work for one, and would love to pass on some business :-)Im doing some work on the monitoring systems at them moment, and its quite interesting.. the most i've seen so far is 7.5kw from a 9.3 kw system. but other than the odd day last week its still winter and not that sunny. So I'd expect closer to maximum in the summer...
I was even seeing power being produced when the panels were under 3 inches of snow, which nobody expected...
The good thing about the feed in tariff is that its not the govt that pays it but the energy suppliers eon, etc whoever supplies your energy... GOvt set the rates and your supplier pays it..
Edited by Graham on Thursday 14th April 20:55
[quote=x type]
you have just said the the inverters only have 10 yrs warranty then you say
"The whole industry is designing and supplying kit with 25 years of feed in tariff in mind."
xtype:
If you knew anything about power converters, and how they work you would also know that a 10 year warranty is no mean feat.
you have just said the the inverters only have 10 yrs warranty then you say
"The whole industry is designing and supplying kit with 25 years of feed in tariff in mind."
xtype:
If you knew anything about power converters, and how they work you would also know that a 10 year warranty is no mean feat.
numberjack 4] type said:
you have just said the the inverters only have 10 yrs warranty then you say
"The whole industry is designing and supplying kit with 25 years of feed in tariff in mind."
xtype:
If you knew anything about power converters, and how they work you would also know that a 10 year warranty is no mean feat.
but you still contradict yourself ,you still say that the kit is designed to last 25 yrs "The whole industry is designing and supplying kit with 25 years of feed in tariff in mind."
xtype:
If you knew anything about power converters, and how they work you would also know that a 10 year warranty is no mean feat.
but the converter only has 10 yr warranty ??
how much to buy a new converer in 10 yrs I wonder
to me this new gizmo seems like the pvc window must have 20 odd years ago
Xtype,
I am not contradicting myself. The PV industry is designing equipment toward a 25 yr design life. In the grand scheme of things its relaitvely new technology, now its at mass market thanks to the recent feed in tarrifs.
Typically and historically, inverters that you would use in PV systems wuld come with a 1 yr warranty. Inverters now are coming with 10 yr warranty. This is why I say the industry is working toward a 25 yr design life. In a few years inverters will have longer warrantied design lives, there are inverters available with 20 yr warranties, but the cost of these is not commercially viable in the UK. It is accepted in UK PV schemes to factor in to the 25yr scheme, the cost of a replacement inverter, due to current manufacturing constraints, and the sub warranties available on components such as IGBT's etc.
Please feel free to continue your quest to find holes in my post. Just remember all I was asking about was small scale commercial/domestic finance. There are alot of companies worldwide investing in PV, and making a mint at it.
If you do have any sensible questions about PV, fire away dude.
I am not contradicting myself. The PV industry is designing equipment toward a 25 yr design life. In the grand scheme of things its relaitvely new technology, now its at mass market thanks to the recent feed in tarrifs.
Typically and historically, inverters that you would use in PV systems wuld come with a 1 yr warranty. Inverters now are coming with 10 yr warranty. This is why I say the industry is working toward a 25 yr design life. In a few years inverters will have longer warrantied design lives, there are inverters available with 20 yr warranties, but the cost of these is not commercially viable in the UK. It is accepted in UK PV schemes to factor in to the 25yr scheme, the cost of a replacement inverter, due to current manufacturing constraints, and the sub warranties available on components such as IGBT's etc.
Please feel free to continue your quest to find holes in my post. Just remember all I was asking about was small scale commercial/domestic finance. There are alot of companies worldwide investing in PV, and making a mint at it.
If you do have any sensible questions about PV, fire away dude.
ILoveLamp said:
isn't there something about a government subsidy being withdrawn too?
Not that I know of. The Government is using PV to help create it's 15% renewable objective & infrastructure. Alot of the drive behind FIT is to enhance the renewable market and bring down prices.
They are making FIT adjustments due to unforseen foreign large scale devlopment ( > 1mw ), but for the forseeable future small scale schemes ( < 4kw ) will stay untouched.
The one thing to remember that is that FIT is guranteed as long as it is commissioned and registered before any prooposed cut. It won't affect < 4kw for years.
numberjack 4 said:
Xtype,
If you do have any sensible questions about PV, fire away dude.
If you do have any sensible questions about PV, fire away dude.
One big question me and others in work have is what safeguards do you have in place when one of these systems sold to mr public,is that when we turn your power off for maintenance work etc.
what is stopping mr public backfeeding into our system and making it live on our side again
Yes we earth it down to work on it but there's always the chance of things going pear shaped
are these systems fitted with auto changeover switches or similar??
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