Solar Panel Economics

By Paul Homewood

h/t Dave Ward

Dave tells me E.ON have been trying to sell his mum solar panels!

Given that we are being encouraged to use solar panels (which we have not got), to charge batteries (which we have not got), in order to charge our electric cars (which we also have not got), I thought I would take a look at their costings.

Shills for renewable energy, such as the ECIU’s Jonathan Marshall, like to make them sound all cuddly, by describing them as a democratisation of energy supply.

Looking at the numbers though, they are a very expensive way of getting some of your electricity for some of the time.

These are the costs from E.ON.

I used their solar calculator, and entered details for our house, which is a pretty average size, including my current consumption of 5600 KWh a year. The calculator came back with:

Cost of solar panels plus battery – £10960
Electricity generated – 4073 KWh
Self consumption – 2682 KWh
Export to grid – 1391 KWh

In short, the system could not supply all of my demand, and much of what it could produce would be no good for me because I could not use it at that particular time, hence the export to the grid. (Presumably much of this surplus would be in summer, and I would mainly reliant on buying in electricity in winter).

Under the Feed in Tariff support system, the export to the grid would be worth 19.4p/KWh. However much of this is government subsidy, as the rate I currently pay is only 11.2p. At this rate, I would only be paid £156 for energy exported.

The self consumption of 2682 KWh would, at current prices, be worth £300 a year, so I could make a total annual saving, excluding govt subsidy, of £456.

With inflation, these savings could be expected to grow in future years, but equally there would be interest to pay on the capital cost of the panels, which would be likely to far exceed such savings.

The battery is only guaranteed for 10 years. Although the panels might last a bit longer, there would also be maintenance costs and degradation to take into account.

Economically then, it would be unwise to assume a life of longer than 10 years.

On that basis, an annual saving of £456 could not justify the capital expenditure.