Solar PV and Solar Thermal - BIG SCALE, BIG RETURN!

[Morganian]

As an aside, whoever first designs a solar panel to fit a roof (ie triangular or rhomboid) instead of rectangular, will make a killing.

As a second aside, unless you assume that no-one knows anything about PV cells, you will be forever frustrated. It is highly unlikely that you will be selling only to those who have a full understanding of the technology and financial model. Take this from someone who sells VoIP.

You need to be able to explain your business with infinite patience and forever.

This is helped somewhat by being able to provide links to pre-prepared text. You have spent a lot of time, money and risk to get to where you are; don't expect your potential customers to do the same.

There are triangular panels available. There are panels which are about 9 inches square, and black which look EXACTLY like slate tiles for roofs. There are hexagonal panels available (honeycombe installs produce good efficiency!)

With regards to the need for infinite patience....yes, there is an element of that...then again when I showed my 2 clients last week the statements, contract and purchase orders they also signed up there and then....

 

I'd be surprised if there were anyone on here who knows more about Solar Panels (PV & Thermal) and the FiT than me (and I'm not blowing my own trumpet).



For the time being Solar Thermal is a dead duck, it has some environmental credentials (if you overlook manufacture and transportation!) but in terms of economical gain for a domestic householder, Photovoltaic is the only real choice for the next few years.

Which proves how little you know about alternative energy ,unlike our goodselves who are heavily involved in practical application of most forms.

http://www.wind-farm.biz/

The only practical form of proven viable alternate energy is large wind turbines and solar hot water generation.

Earl

 

[LicensedToTrade]

Which proves how little you know about alternative energy ,unlike our goodselves who are heavily involved in practical application of most forms.

http://www.wind-farm.biz/

The only practical form of proven viable alternate energy is large wind turbines and solar hot water generation.

Earl

No offense Earl, but your good selves have a proposal to be struck off on companies house. Why?

I'm pretty heavily involved in it myself Earl, after all we sell more PV than anyone else in the UK. www.saint-gobain.co.uk

 

[Cornish Steve]

Bless my cotton socks if necessary, but I'm still missing something.

Government paying for it - once and for all NO!

The government DO NOT pay for it.

Why would someone give you 40p for something everyone knows is worth 10p?
- they arent giving you it, they are legally binding someone else to give it to you

So who is losing 30p on every kWhr that a homeowner produces? If the government isn't paying it, who is? If someone is "legally bound" to pay the difference, why would they do that? Whoever it is ought to get out of that particular arbitrage business quickly because they're losing boatloads of cash!

 

[LicensedToTrade]

Bless my cotton socks if necessary, but I'm still missing something.


So who is losing 30p on every kWhr that you produce? If the government isn't paying it, who is? If someone is "legally bound" to pay the difference, who is it? Whoever it is will be losing boatloads of cash.

That would be the energy companies losing out. But don't feel too bad for them, it is highly tax deductable and there is a rebate scheme behind it. So ultimately? Yes the government are paying a proportion of it...or rather you and me are

 

[Cornish Steve]

As a second aside, unless you assume that no-one knows anything about PV cells, you will be forever frustrated. It is highly unlikely that you will be selling only to those who have a full understanding of the technology and financial model. Take this from someone who sells VoIP.

You need to be able to explain your business with infinite patience and forever.

This is helped somewhat by being able to provide links to pre-prepared text. You have spent a lot of time, money and risk to get to where you are; don't expect your potential customers to do the same.

This is a very valid point. I don't believe I'm particularly stupid (although some may question that), and I'm still struggling to understand the economics. It would serve you well to assume that most of your potential customers are like me. We need to be convinced in an honest and open manner that there's money to be made or saved. Hand-waving and a number at the bottom of a confusing page of calculations just doesn't cut it.

 

[Cornish Steve]

So ultimately? Yes the government are paying a proportion of it...or rather you and me are

Of course! I knew that! It's always the taxpayer who pays when heavy losses are involved! Basically, for ideological reasons, the government believes everyone should pay billions more in taxes so we can all turn green. Nice of us really. Of course, putting such rotten government ethics aside, there absolutely no reason why someone shouldn't make an honest killing out of this business. To do that, though, the message needs to be crystal clear. If there's one lesson from this thread, it's that the message is totally confusing right now.

 

[LicensedToTrade]

This is a very valid point. I don't believe I'm particularly stupid (although some may question that), and I'm still struggling to understand the economics. It would serve you well to assume that most of your potential customers are like me. We need to be convinced in an honest and open manner that there's money to be made or saved. Hand-waving and a number at the bottom of a confusing page of calculations just doesn't cut it.

It is an industry wide problem. I know it is a great product, the manufacturers know it is a great product, a couple of scientists in a shed know it is a great product. But the idea is so daft and the FiT is so complicated that getting the message across to the paying public is a real challenge. It is scary, you are talking about investing a significant amount of money into a real unknown.

The PAYS scheme (Pay as you save) which is still in development should take some of that fear factor away.

 

[LicensedToTrade]

no reason why someone shouldn't make an honest killing out of this business.

Guess who owns significant shares in a number of major renewables technology companies? You guessed it, the guys who sell the oil and gas.

 

[Cornish Steve]

I can tell you that, in the US, many of the entrepreneurs who dived into wireless telephone technology two decades ago are diving into renewable energy startups right now. For sure, some savvy business people do believe in it - despite my skepticism for now - so it won't be just the oil companies that benefit.

 

No offense Earl, but your good selves have a proposal to be struck off on companies house. Why?

I'm pretty heavily involved in it myself Earl, after all we sell more PV than anyone else in the UK. www.saint-gobain.co.uk

Different company as I own wind-farm.biz.:|

Then you know that PV panels are not practical in the uk.

Earl

 

[LicensedToTrade]

Different company as I own Ocean octane.:|

The you know that PV panels are not practical in the uk.

Earl

What this ocean octane? http://wck2.companieshouse.gov.uk/142e625bed0ef46148433e78c06d3e45/compdetails

If you haven't applied to have your LTD status removed then companies house has!

PV panels only have 20% efficiency at best in any part of the world, the UK generally speaking is not the most ideal location in the world for PV or Thermal. However then can still work very effectively in the areas indicated in the UK Solar Emissivity maps. Will they work in Scotland, yes but you will need a lot more m2 of PV to get decent results and naturally your initial outlay may be untenable.

Horses for courses really. You wouldn't install a water softener in a soft water area...but in a hard water area they are super effective.

 

Bless my cotton socks if necessary, but I'm still missing something.


So who is losing 30p on every kWhr that a homeowner produces? If the government isn't paying it, who is? If someone is "legally bound" to pay the difference, why would they do that? Whoever it is ought to get out of that particular arbitrage business quickly because they're losing boatloads of cash!

The taxpayer is paying the subsidy one way or another as always.

Stupid to think otherwise.

Earl

 

What this ocean octane? http://wck2.companieshouse.gov.uk/142e625bed0ef46148433e78c06d3e45/compdetails

If you haven't applied to have your LTD status removed then companies house has!

are you bylysic or something that refers to a company called OCEAN NOTIONS LIMITED.

Earl

 

[LicensedToTrade]

are you bylysic or something that refers to a company called OCEAN NOTIONS LIMITED.

Earl

Lol, I couldn't do a simple copy and paste could I? Try this one... http://wck2.companieshouse.gov.uk/142e625bed0ef46148433e78c06d3e45/compdetails

EDIT: Actually I was right the first time! You are winding me up...I shouldn't have questioned my copy and past skills!

 

[KM-Tiger]

An interesting read.

If I've understood correctly the business model only works because there is political will to force energy companies to pay approx three times the market rate for electricity generated by PV.

Is that sustainable in the long term? If and when the double dip bites, won't that be seen as a luxury we cannot afford?

 

[LicensedToTrade]

An interesting read.

If I've understood correctly the business model only works because there is political will to force energy companies to pay approx three times the market rate for electricity generated by PV.

Is that sustainable in the long term? If and when the double dip bites, won't that be seen as a luxury we cannot afford?

Possibly, but the deal is guarenteed for 25 years (24 years, 23 years etc etc depending on how soon you join up). How trustworthy is a government guarentee? Who knows, 25 years is a long time...what is to say job seekers allowance will exist in 10 years? Ultimately like any long term investment it is a punt.

 

[davwik]

is that a Labour or Con-dem govt guarantee

 

[cjd]

A
If I've understood correctly the business model only works because there is political will to force energy companies to pay approx three times the market rate for electricity generated by PV.

Is that sustainable in the long term? If and when the double dip bites, won't that be seen as a luxury we cannot afford?

My ignorant first look at it says that if I had a 2kw panel I'd get

£744 from the power company
£14 from sales back into the grid
£175 from saving my own electricity
£933 in total

So only 20% comes from a 'real' source - the other 80% is the subsidy.

Presumably the power company can show some hypothetical savings from reduced need to build new power stations - but the payment is massively out of proportion to the savings possible. The payment has obviously been calculated to make the payback to the householder work rather than any other consideration.

This has to be an unsustainable payment I'd say and a very high risk. The only way the payments can continue would be to stop the deal to new joiners once they've hit a budget limit for the scheme; and/or by tapering the payment down over the years.

Still, it's Quite Interesting nevertheless.

 

[Morganian]

CJD

Thanks. Yes your sums look right. This isn't sustainable and won't be around for long.

To show how ludicrous the original critisising posts were and how ignorance gets presented as fact (e.g "they only produce 10%) the fit and associated payments are calculated against the ratings if the kit

See

http://www.fitariffs.co.uk/FITs/principles/export/

All explained.

Anyone want to tear my financials to pieces now? Or scratch my car?!?!

 

[LicensedToTrade]

My ignorant first look at it says that if I had a 2kw panel I'd get

£744 from the power company
£14 from sales back into the grid
£175 from saving my own electricity
£933 in total

So only 20% comes from a 'real' source - the other 80% is the subsidy.

Presumably the power company can show some hypothetical savings from reduced need to build new power stations - but the payment is massively out of proportion to the savings possible. The payment has obviously been calculated to make the payback to the householder work rather than any other consideration.

This has to be an unsustainable payment I'd say and a very high risk. The only way the payments can continue would be to stop the deal to new joiners once they've hit a budget limit for the scheme; and/or by tapering the payment down over the years.

Still, it's Quite Interesting nevertheless.

The real plus is that the government can claw a lot more back from the EU coffers, which is only fair as a lot of it is money from the UK anyway!.

 

Lol, I couldn't do a simple copy and paste could I? Try this one... http://wck2.companieshouse.gov.uk/142e625bed0ef46148433e78c06d3e45/compdetails

EDIT: Actually I was right the first time! You are winding me up...I shouldn't have questioned my copy and past skills!

Apologise the company Ocean Octane is being closed due to non trading I have been informed by a partner.:redface::redface:

The website is a seperate entity.

Earl

 

[cjd]

CJD

Thanks. Yes your sums look right. This isn't sustainable and won't be around for long.

Just shows how crap the PV technology is though. If it costs around £12,000 to install and I get roughly £930 pa back pa. I'd say that's only a payback in about 19 years even with the massive subsidy. (assuming I could achieve 3% pa on my £12k in a bank). That's also assuming no maintenance at all.

I wonder how many people stay in the same house for 19 years?

What am I doing wrong?

 

[Morganian]

Just shows how crap the PV technology is though. If it costs around £12,000 to install and I get roughly £930 pa back pa. I'd say that's only a payback in about 19 years even with the massive subsidy. (assuming I could achieve 3% pa on my £12k in a bank). That's also assuming no maintenance at all.

I wonder how many people stay in the same house for 19 years?

What am I doing wrong?

In a number of ways.

1. The payment stays with the property as a bond which gets sold on if you move

2. How much were your elec bills 10 years ago? £15 per month??? How much are they now? £60 per month???? How much will they be in 10 years!?! Do you think they will go up by 100% over 10 years? Or 600% as current predictions stand

3. The fit payments increase with inflation

4. The payment is over 25 years and tax free, your bank account interest is taxed (ok, ISA etc aside)

5. 10k investment not 12k

 

[cjd]

In a number of ways.

1. The payment stays with the property as a bond which gets sold on if you move

I wonder if that would actually work? What happens if I don't want to buy it or if I consider the value to be less than the bond? Plus there'll be a cost of lawyering it I imagine?

2. How much were your elec bills 10 years ago? £15 per month??? How much are they now? £60 per month???? How much will they be in 10 years!?! Do you think they will go up by 100% over 10 years? Or 600% as current predictions stand

As 80% of the revenue I get is only increasing by inflation, any increasing above RPI cost of electricity will be too lowly geared to make a material difference, but I may play with that

3. The fit payments increase with inflation

Yup, I was hoping to ignore inflation but I suspect it will make a significant difference as it compounds.

4. The payment is over 25 years and tax free, your bank account interest is taxed (ok, ISA etc aside)

Well as any sane person will use an ISA so tax can be ignored. But as I'm now going to assume an average of 4 or 5% interest as it's highly unlikely that interest rates will remain this exceptionally low during my costing period

5. 10k investment not 12k

I got the £12k figure from here:

"Costs for installing a solar electricity system vary a lot - an average system (2.2kW) costs around £12,000 (including VAT at 5%). "

http://www.energysavingtrust.org.uk...r-electricity#Makingthemostofsolarelectricity

I have no clue what it includes but I suspect I would need scaffolding and maybe planning permission?

This will make some changes to the output but it will still show how crap PV technology is won't it? As even with an 80% subsidy it's not going to be a great investment.

 

In a number of ways.

1. The payment stays with the property as a bond which gets sold on if you move

2. How much were your elec bills 10 years ago? £15 per month??? How much are they now? £60 per month???? How much will they be in 10 years!?! Do you think they will go up by 100% over 10 years? Or 600% as current predictions stand

3. The fit payments increase with inflation

4. The payment is over 25 years and tax free, your bank account interest is taxed (ok, ISA etc aside)

5. 10k investment not 12k

So you think things will stay economically stable for the next 19 years just like they did for the last.?

Like I am not paying 3 times the amount for me gallon of squirt.

The subsidies can be cut at a moments notice.

Earl

 

[cjd]

And what you find if you do all that is simply that the whole financial model is hyper sensitive to assumption about inflation and interest rates - that's because simple payback is so far out that other considerations become irrelevant.

If you just take the simple view that it costs £12,000 upfront and you get £933 back pa and assume all other things are equal (ie real interest rates balance real inflation) it still takes 13 years to pay back (or 11 if it only costs £10,000 to install).

Plus I have no maintenance costs in the calculations.

 

[Morganian]

So you think things will stay economically stable for the next 19 years just like they did for the last.?

Like I am not paying 3 times the amount for me gallon of squirt.

The subsidies can be cut at a moments notice.:



You are obviously tied to your views.

Fuel bills have increased by 400% over the last 10 years. If you don't agree then there is no point in continuing reading as you obviously have opinions based on incorrect views and mis information

The increase in fuel bills means a DIRECT increase in the income of the used units per kWh

 

So you think things will stay economically stable for the next 19 years just like they did for the last.?

Like I am not paying 3 times the amount for me gallon of squirt.

The subsidies can be cut at a moments notice.:



You are obviously tied to your views.

Fuel bills have increased by 400% over the last 10 years. If you don't agree then there is no point in continuing reading as you obviously have opinions based on incorrect views and mis information

The increase in fuel bills means a DIRECT increase in the income of the used units per kWh

I was refering to the price of petrol and diesel.

The idea that these subsidise will remain fixed for 20 years is laughable same as the poor pensioners who were promised a certain sum and then found it drastically reduced in many cases.

Who knows what will happen in 20 years.

Its a view based on having lived a fair while and seen what happens in real life as opposed to the best laid plans of men and mice.

Earl

 

[cjd]

Well as far as I can see the pay back for the home installation is so far out that it's irrelevant what happens to fuel prices anyway. You really need a payback inside 3-5 years to make this work as an investment, rather than because it's a nice thing to do

So what else is missing?

 

[Cornish Steve]

Fuel bills have increased by 400% over the last 10 years.

In large part because of government policies, taxes, surcharges, etc. (they haven't increased by anywhere near that amount over here). New governments can institute new policies. Given how obscenely profligate recent governments have been, we may well see an era of austerity. That's one of the big uncertainties in the business case for solar energy, because the subsidies are unsustainable: You're totally dependent on government policy. Is it a risk worth taking? For some, yes. For others, no.

 

[Cornish Steve]

All explained.

Anyone want to tear my financials to pieces now? Or scratch my car?!?!

When you posted your initial message, I for one wrote it off as green hype. I hear outrageous claims all the time and assume they are just a questionable marketing pitch. Now, aren't you glad that we challenged you? You had the opportunity to defend yourself and to explain your case. By putting together some numbers, you brought to light the one thing that matters: The government is bribing homeowners with humongous subsidies. I was not aware of the sheer magnitude of these subsidies, and I suspect that others weren't either.

At this point, what I'd suggest is that you totally revisit your marketing pitch. Your initial message isn't believable. A message that coolly explains the business case based on government subsidies would be. That's the message you need to get across.

Aren't you glad that you didn't run away from UKBF in a huff after our initial skepticism?

 

[LicensedToTrade]

Aren't you glad that you didn't run away from UKBF in a huff after our initial skepticism?

I wasn't at all surprised to see such widespread rejection of his initial post, bearing in mind that he has only 40 posts. I was however a little surprised that even after I endorsed his claims that even my opinion was poo-pooed.

I haven't been on this forum for years but I'm reasonably active and like to think that my posts are credible and trusted particularly to those who know what company I work for. Can't say I'm not disappointed.

 

[Cornish Steve]

What would be the value of these forums if everyone simply agreed with you? I, for one, hope for blunt criticism when I'm being unrealistic, unclear, or am downright wrong. Isn't that a better definition of value and trust?

There's an awful lot of hype about green technology, so you face an uphill battle in getting your message across. Maybe some of the cold, hard facts that came to light in this thread will help your case.

 

[LicensedToTrade]

What would be the value of these forums if everyone simply agreed with you? I, for one, hope for blunt criticism when I'm being unrealistic, unclear, or am downright wrong. Isn't that a better definition of value and trust?

There's an awful lot of hype about green technology, so you face an uphill battle in getting your message across. Maybe some of the cold, hard facts that came to light in this thread will help your case.

What case is that exactly? In a previous post in this thread I already brought attention to some of the shortcomings of the technology, the general difficulties the industry faces in explaining the system to the general public and the barriers that consumers can face.

I've given what I believe is a fairly balanced representation of the technology and its limitations. I've endorsed the pros that the OP has laid claim to and brought attention to the cons.

I've explained that I work for the company that sells more of these than anyone else in the country (and this still represents less than 1% of our overall portfolio).

Please help me out by identifying exactly where and when in this thread you brough cold hard facts to my attention. You've heard of Kolb's learning cycle?

 

Please help me out by identifying exactly where and when in this thread you brough cold hard facts to my attention. You've heard of Kolb's learning cycle?

Here is some you might enjoy.

http://www.guardian.co.uk/commentisfree/2010/mar/01/solar-panel-feed-in-tariff

Earl

 

[LicensedToTrade]

Here is some you might enjoy.

http://www.guardian.co.uk/commentisfree/2010/mar/01/solar-panel-feed-in-tariff

Earl

I take some of his points onboard but also with a pinch of salt (afterall it is the guardian )

We sell a reasonable amount of micro-wind generators (turbines on a domestic house) but are moving away from them as we have decided for ourselves through extensive (and expensive) research that they just aren't efficient. The turbines on house simply aren't at a high enough altitude and so they spend more time 'seeking' the direction of the wind than generating energy from it due to the kinds of turbulence you would expect close to a built up area.

As for the PV, the guardian journalist completely overlooks how much of the funding is coming from the EU. For years now we have ploughed money into the EU but gotten very little in return for UK interests. The money in the EU is there to be taken and this is one of the first major opportunities that the UK has had to get some of it.

I don't know enough about nuclear power to comment on it, for the time being ourselves and all other building material distributors aren't in the business of large scale nuclear energy sites...why would we be?

The point is... it is a starter for ten. Better to be installing solar panels than to be doing nothing about soaring energy costs.

 

[cjd]

The point is... it is a starter for ten. Better to be installing solar panels than to be doing nothing about soaring energy costs.

That's not what my numbers are saying and I haven't had a correction yet.

If 80% of the revenue is stuck to RPI increases, 'soaring' energy costs doesn't make much difference to the financial case, which is poor even with the massive subsidy.

Surely I'm missing something - it can't be as bad as this?

 

[armstrong010]

i was reading to avoid soaring energy costs, try investing in geothermal heating and cooling, i installed the setup in my previous home for $18 000 CAD last year, less 50% government rebate i enjoyed it for 3 months till i sold my property. i believe if you truly want to be green you need to be off the grid map

 

[mysterons]

Hi guys,

Excuse me wading in here, and for my not 100% knowledge of the facts, but I do know a little about this system - having both considered it as an investment for next year, plus one of our clients sells this equipment themselves.

As I understand it :

- a 2kw array on a property should cost in the region of £8k installed - although the costs are on a scale ie the more you purchase the cheaper the equipment becomes, ie a 4kw array was more in the region of £13-14k to supply and fit.

- for each KW of energy produced, the Feed in Tarriff system pays 41.3p back.

- the 3p per KW "export" amount isnt actually calculated on what is put back into the main grid, as its difficult for them to calculate what is actually put back an assumption is made that 50% of all energy produced by the PV array is fed back into the grid.

So in real terms its 41.3 + (3 / 2) = 42.8p per KW paid back.

Note that the feed in tarriff figures per kwh drop if the array installed is larger than 4kw.

The figure quoted here of £933 per year seems about right, I did have a leaflet here from my client with the figures on, although its not come to hand at the moment (as usual). So to my reckoning that works out as approximately an 8 year return on my original investment, and then 17 years of guaranteed regular income after that!

I've actually seen the first statement that someone I know (who lives in the midlands) received after installing a 2kw array in March this year - he received a cheque for £305 for the period April 1st - June 30th 2010.

In terms of maintenance, it should be fairly minimal, as depending on the manufacturer of the panel of choice, the manufacturers warranty on the panels is 25 years. They guarantee that the panels will function at x% efficiency after 15 years and y% efficiency after 25 years. Either X or Y is 85% (I think its Y but again I cant be sure at this late hour!).

From a purely personal opinion, I've been seriously considering it as an idea - I have 3 properties on which these can be installed on and I'm seriously considering doing it in one go - which will bring the costs of the panels down - and as they are 3 seperate properties, none of them will be above the 4kw limit mentioned above, so will all qualify for the higher feed in tarriff.

Also, the current scheme is in place until at least March 2012, at which point it is due for review (so I wouldnt be surprised if it gets stopped then!).

As I said, purely my 2p worth, and I do bow to those with higher knowledge of the product than me - I'm just a humble web designer after all! If it would help, I can always ask my client to come on here and try to clear up any questions on the issue - but I'm reticent to just do so off my own back in case it looks like blatant advertising!


Cheers

Ewan