By Paul Homewood
The Telegraph published this letter today:
Unfortunately his “relief for the National Grid” argument does not stand up to scrutiny. Unless he plans to cut his electricity supply off completely, the National Grid will still need to provide enough dispatchable capacity to cover demand from him and all other solar powered homes, for the times when it is needed (during cold dark winters?)
But what about the economics?
The Eco Experts website has come up with a guide to costs:
1) A typical 3.8KW installation would cost £6000, plus £4250 for a battery.
2) It will produce about 3000 KWh a year, about 70% of total requirement.
3) The inverter would need replacing after about 10 years, at a cost of £1000
4) Annual cleaning costs of £100.
So we are looking at an initial cost of £10250. After about 10 years a new inverter would be needed, and certainly a new battery as well.
Current prices of electricity are about 14p/KWh, so savings of 3000 KWh would be £420 a year at current prices. Knock off the cost of cleaning, and you are down to £320.
Over a 20-year period, say, savings at current prices would be £6400, but the capital cost would be £15500 (including replacement battery and inverter).
On the face of it, a non starter.
Incredibly though, Eco Experts reckon the system would actually be showing a cumulative profit after 16 years:
https://www.theecoexperts.co.uk/solar-panels/solar-vs-the-grid
So what explains the discrepancy?
This is the basis of their calculations:
It is not unreasonable to assume that electricity prices will rise over time, and I would not argue with a figure of 3.73%.
But what is missing from their calculation?
The cost of interest!
If you borrow £10250 at an interest rate of 5%, annual interest will be £512, more than offsetting the savings on the electricity bill.
Even with electricity prices rising each year, the cumulative interest costs still exceed cumulative net savings by Year 20.
In other words, there will no savings to use to pay back the capital outlay.
There is one other trick used by Eco Experts. They have assumed a current electricity retail price of 18p/KWh (though they don’t actually show this figure anywhere).
This may be in line with standard variable tariffs, but is well above widely available competitive prices around the 14p/KWh mark, which can be easily found on price comparison websites.
Many people, of course, cannot be bothered shopping around to save money. But it is unlikely that these folks will bother to install solar panels either to save money!
In short, our correspondent, Mr Booth, has been sold a pig in a poke. Unless he has the odd ten grand stashed away in a biscuit tin under his bed, he will never show a return on his investment, but lose a fortune instead. (There is a proviso here- generous government subsidies ceased in March 2019, so he may be in receipt of these, which will help to cover his outlay).
Certainly though, anybody who is tempted to follow his example had better do their homework, and not be taken in by the solar industry sharks!
via NOT A LOT OF PEOPLE KNOW THAT
August 15, 2019 at 02:09PM
Iowa Climate Science Education 