Solar Panels

[baggy]

We run a site that specialises in buying property below market. To maximise rental income we teamed up with an investor and a solar installer. On solar installations we have increased our rentals by 5% per annum on installation, and these installations are free! The tenant gets electricity at a reduced rate - typically saving 40/50% on the electric costs. One of our tenants has put electric timers on washing machines and dryers - saved 76% on his electric.

The investor makes their money on the feed in tariff, the ROI is 12% to 17% per annum investment is completely tax free, and indexed linked. Typically a 4kw system costs £11.5k + vat. The pay back time is six to ten years. The landlord benefits from a more rentable property, an increase in value of the property is 8% if owned by landlord - as free installation it is 4% increase on property values.

Our investor has £150million to invest, so the market is limited.

Solar Site Criteria - Ideal is a 30 degree to 35 degree pitched roof, of about 30 sq. metres surface area (that will take 16 x 250Watt panels) and facing South. Our funder for the Free Of Charge (FOC) model, will look at South +/- 45 degrees, and will not entertain flat roofs on the domestic side. There must be no shading (chimneys, trees etc), nor must there for the next 25 years on the FOC side. On the paid for model we can fit to any azimuth, though would not recommend North, even with the benefit of the FIT + the energy savings. Finally if the roof is in a poor state of repair, it may not be up to a solar PV installation.

[Richlist]

Whats your experience on leasehold flats ?........have you carried out installations, any difficulties with frreeholders, leases or restrictions etc ?

[baggy]

We have had 68 carried out on our BTL. I haven't had it on my house, as I will be building an extension in the future. We had no trouble with our lenders and we making an extra £2040 on rentals per month with an average increase of 30 per month. Only one tenant said they were not interested in paying - but we will review that when the tenancy expires. We have not carried out any on lease hold flats as usually a company owns the freehold - but great for someone who owns flat freeholds!

[Mortitia]

If I had 150 million to invest would I do this and what sort of company sticks a load of copper stuff on other's roofs and waits for a return? Something here is not right.

Recently at the New Forest Show I counted 6 stands selling similar systems to householders. They all wanted £10k to fit the panels on the punters houses and then promised they would have free electric as the electric put into the National Grid would supply income. Allegedly government grants help pay for the complicated set up.

Too good to be true - I think so.

Mortitia

[Chestnut]

Mortitia,

My understanding is that the government 'feed-in' tariff @ 45p/unit for self-generated electricity pays off the £10K installation investment in about 10 - 12 years. As the tariff is fixed for 25 years the investor makes a substantial profit on the remaining half of the period - overall about 8% - 12% per annum over 25 years. In addition their own electricity use is free and they are paid for the surplus into the grid.

As recently stated on BBC Dragon's Den, 12% in solar pv is much better than the banks and should be grabbed if you've got £10K to spare, which is about the minimum cost of a practical solar pv installation.

The feed-in tariff is the way the Gov is asking us to build individual generation to save them cost of building so many big power stations.

Am I right or wrong, anyone?

[Richlist]

Am I right or wrong, anyone?

Its not really about wether you are right or wrong.....its all about confidence and 25 years is a long period and much can & will change in that time.

1. The Government can change their minds and the rules at any time. The public are struggling to have confidence in their Government after some very high profile back peddling and changes in direction and who knows what they will do over the next 4 years. A new Government in 2015 may reverse the whole deal and feed in tariffs and benefits could significantly reduce or dissappear overnight.

2. There is also a big question mark over wether the work will reduce the value of the property &/or make it less saleable.

3. Because the industry is so new many installation firms are in their infancy and have little or no track record.

Currently I'm reluctant to spend even £99 on an installation let alone £10K or more. In fact I'd go so far as to say that I wouldn't have the installation if you paid me.

[Melboy]

I looked into solar panel installation and I am still not convinced mainly for all the reasons that Richlist has listed above.

The selling market is awash with companies offering solar installation rather like the early days of secondary metal framed sliding window double glazing to your existing windows which within 5 years a better product came to the market by way of a complete window change which was far superior and that is where I think solar panels will be in 5 years time as a better and more efficient product comes omto the market and this is the reason why I won't be signing up for 25 years at £99 and I certainly wouldn't pay £10,000 for any installation.

Mel.

[Chestnut]

Interesting responses! Could develop into quite a debate!

Mel: A former boss of mine once said if the Wright brothers had waited for Concorde we'd never have developed powered flight.

I'd like to hear from someone who's taken the plunge on solar pv. There's a lot of it about, especially in Totnes apparently, (Nick Crane -BBC).

I was looking at our local church roof - splendid town centre site - but hasn't got the £10K to invest!!!!

[Richlist]

The landlord benefits from ......... an increase in value of the property is 8% if owned by landlord - as free installation it is 4% increase on property values.

Are you able to explain how these figures have been determined ?

A former boss of mine once said if the Wright brothers had waited for Concorde we'd never have developed powered flight.

Ridiculous analogy......we don't know that to be the case......there are multiple possibilies.

I was looking at our local church roof - splendid town centre site - but hasn't got the £10K to invest!!!!

Perhaps your contact with the £150 million to invest might like to make a charitable donation ?

[Melboy]

Mel: A former boss of mine once said if the Wright brothers had waited for Concorde we'd never have developed powered flight.

I absolutely agree with that statement Chestnut especially as I was a Licensed Aircraft Engineer in a previous life for 25 years.

Sure things will develop in time and good job too but for me to invest £10k.....I'm out! as per Dragon's Den.

My neighbour has just had 20 of these panels installed on the £99 scheme so I shall see what he thinks of it all in due course.

The ironic thing about him is that he is never there so he won't be draining the solar panels of energy.

Mel.

[Mortitia]

I can't imagine how awful a house looks with 20 of these panels on the roof. The entire country could be ruined aesthetically by these bland, retro fitted gargoyles to every building. Do planners have no say in what happens? Some southern European cities have gone in for this big time and it looks dreadful.

Totally agree that better designs and efficiency will be along shortly but I would not buy a house for myself encumbered with panels.

Mortitia

[Chestnut]

Wasn't the same once said of TV aerials?

Planners do have a say in certain areas. The Church roof I have in mind is in a conservation area and listed but completely out of site, except from its tower or a helicopter.

Solar pv panel roof tiles are now available - same size to replace standard roof tiles.

[Melboy]

I was on holiday in Tenerife last year where they were fitting the solar tiles to the Hotel roof.

I have to say you would not know they were there and the only way you could tell was from the slight sheen on the tile in Sun's reflection.

When we get to that stage of concealment in the UK roofing then I will look again at solar energy because as Mortitia says the present fitment is downright ugly on the eye.

Mel.

[Mortitia]

Chestnut - I cannot accept the comparison of a TV aerial (or even multiples) with a domestic roof full of solar panels. Enormous white satellite dishes are few and far between now in favour of the smaller black type. Let's hope solar panels go the same way. Hard luck to those who ruined their houses with the large ones.

Agree there are some very good new builds with solar panels built in the roof tiles - usually done by local authorities who seem to have money to burn.

Mortitia

[Chestnut]

Mortitia,

TV aerial comparison just something picked at random that's become commonplace because hard to do without, ....but still ugly!

I think the same could, and maybe should, happen with solar. It seems increasingly illogical to ship electricity from large power stations, or indeed ugly wind farms, along unsightly pyloned cables at great cost, when this emerging technology could enable much to be produced directly on the sites where it's used.

Shouldn't property owners encourage this?

ps - no response yet from investor with £150M !!!! Phantom?

[Richlist]

There's something that doesn't sit quite right with me concerning the overall financial package being offered.

We have the energy companies making substantial increases to fuel prices and increasing numbers of people in 'fuel poverty', with many who have to choose betweeen eating or heating their homes.

Yet, anyone who can afford the £10000-£12000 installation costs for solar panels is paid 43.3 pence per unit by the energy companies for electricity they feed back to the grid. This means that they are paid substantialy MORE per unit than the energy company pays to produce their own electricity.

So, the process actually means that those prices are being paid at the expense of the less well off and in particular pensioners.

[Guest caravanj]

There's something that doesn't sit quite right with me concerning the overall financial package being offered.

We have the energy companies making substantial increases to fuel prices and increasing numbers of people in 'fuel poverty', with many who have to choose betweeen eating or heating their homes.

Yet, anyone who can afford the £10000-£12000 installation costs for solar panels is paid 43.5 pence per unit by the energy companies for electricity they feed back to the grid. This means that they are paid substantialy MORE per unit than the energy company pays to produce their own electricity.

So, the process actually means that those prices are being paid at the expense of the less well off and in particular pensioners.

I agree, but it only hits us pensioners who have made good provision for our own old-age. As per my reply to another post, if you've made no provision for your old-age there's a scheme whereby you can get £12,000 of solar panels for nowt, just like you could get a £6,000 central heating system for nowt!! And in your final days you'll still be paying income tax & will have sold all your assets to sit in a nursing home chair next to some waster who's never paid a penny into the system.

Don't save for your old-age, you know it makes sense. LOL!!

[Chestnut]

Good point RichList!

My understanding is that the 43.5p is the investment incentive that would otherwise have to be invested (by Government?) to increase number of new large scale power stations, guarantee political and practical continuity of raw fuel supplies (coal, oil, gas, nuclear, etc), and other hidden costs of developing, supplying, and transmitting (pylons, cables) 'national' electricity.

It must make sense to encourage individuals to generate their own, especially if source is free!

And it helps a little to reduce price increases for everyone else.

But who would invest £10,000 on limited life capital equipment without a decent return?

(I think equipment is only free to pensioners over 70.)

[Richlist]

My understanding is that the 43.5p is the investment incentive .......

I'm fully in agreement with incentives BUT not those that incentivise at the expense of the poor or needy.....which is the case here.

Road tax incentives are a good example of how to persaude people to use less fuel. Those with cars producing higher CO outputs are paying substantially more in road tax than lower CO output vehicles.....some pay nothing at all. These incentives don't penalise poor people but it does penalise those that want to buy larger more polluting vehicles.

that would otherwise have to be invested (by Government?) to increase number of new large scale power stations, guarantee political and practical continuity of raw fuel supplies (coal, oil, gas, nuclear, etc), and other hidden costs of developing, supplying, and transmitting (pylons, cables) 'national' electricity.

BUT we are also having to have lots of new nuclear power stations as well.

Producing free energy MUST NOT be at the expense of the poor and needy. How can anyone agree that is right when more pensioners die of hyperthermia than die on the roads every year.

[Chestnut]

I'm fully in agreement with incentives BUT not those that incentivise at the expense of the poor or needy.....which is the case here.

Is it?

[Richlist]

Yes I firmly believe it is.

In fact, I'd go further, I believe the whole package is completely unacceptable in a modern society.

How would you feel if you were in receipt of your inflated incentive payment whilst the OAP next door to you couldn't afford to heat their home or feed themselves properly......or worse ?

It certainly doesn't sit well with me.

It might not be so bad if energy price rises weren't so big but with some people spending around 25% of their income on energy it just isn't right.

There are obviously alternative ways of dealing with incentives and low cost energy production without it affecting the poor.

I read today that the incentives are likely to be significatly reduced from next April.

Still.....nobody real gives a fig anymore.....are you one of them ?

[Chestnut]

Still.....nobody real gives a fig anymore.....are you one of them ?

No, I care about developing cheaper sources of energy, ...and the poor and needy who ought to share the benefit of the results.

I like your thinking. What would be a better incentive?

[Richlist]

There are many ways of providing incentives for reducing energy consumption......the Government should be more creative.

I think we need to view energy provision in the same way as we do water supply ie.....nobody goes without, even if the bills aren't paid.

That way the poorest, the most needy & those down on their luck don't have to make life threatening decisions.

One way might be for everybody to pay the same flat percentage of their income for energy.....calculated on the affordability for the poorest in society . That way the rich pay more. Those that then choose to invest in solar, wind, heat pumps, hydro power generation etc get a discount. It would need to take property size, type, location etc into account. Any surplus could be invested in producing/installing renewable energy.

I don't see many Government or local authority buildings investing in renewables. Neither do I see many churches, shopping centres, sports facilities, offices or factories to name just a few........and these are the real energy consumers. The current system is flawed.....its time for change & creativity.