A question about solar panels and battery storage

[Badlad]

As a recent convert to solar power and battery storage I took a few other things into consideration when looking at the finance of it all.

Sure it's a long term investment with a lengthy payback period. You really need to have the money available rather than loaning it on a mortgage for example. With battery systems and 12-18 panels the payback seems to be somewhere between 10-15 years. If you are low usage then great, you'll be selling more to the grid. The unit cost of electricity is sure to go up significantly over the 10-15 year period, so the payback period should be shorter than the calculation based on current prices. Once the payback period is over the money you save and the money you get back from the grid is all yours, profit if you like. Our panels are guaranteed for 25 years so I'll be hoping for a goodly period of acting like a little power generation plant.

The other part of my equation was the unknown value having a solar and battery system would put on the house if I was to sell it. Now this isn't a straight forward calculation to say a house is worth £10K more because it has solar than one that doesn't. The value is always more nuanced. It could be more saleable, a quicker sale, more interest, achieving the asking price rather than below asking, etc etc. the ability to have a car charger in a world moving towards electric cars is also very attractive.

Anyway those are the things that sold the idea to me and so far we're very pleased.

 

[Tritim230]

I agree fully with Badlad's comments.
For us, the payback period is nearer 6 years as we save on fuel by powering the EV's.
Moreover, we have power in case of our frequent and unpredictable power cuts.
And on many summer days having that totally independent freedom that we are not dependent on the grid and all the politics and costs of our electricity generation is truly wonderful.
If we were in a position to supplement with wind and hydro generation to be fully independent, I would do it.

 

[Badlad]

According to a quick search, electricity prices went up 36% between 2010 and 2021. Between 2021 and 2022 prices rose 74%. No doubt there will be rises ahead.

I'm not sure how that works into the solar payback equation but it sounds like an important factor to me.

 

[Cantclimbtom]

Just to add another perspective to this topic (which I've been reading with interest):

I'd crunched the numbers for our house a couple of years ago, hoping that solar would be financially sensible, and didn't get an outcome that looked worthwhile. After a conversation with someone recently who mentioned it being a "no brainer" to get it, and from reading this topic, I looked into it again. I even got a design & quote from Octopus, and it still didn't really make sense financially. We're a fairly low-use household without a large south facing roof, and it looks like we'd have roughly a 15 year payback period (and this is a misnomer, since it assumes that all you can do with the capital is match inflation). I absolutely appreciate that there is good justification for solar aside from the financial aspect, but from a purely economic perspective it's certainly not worth it for everyone.

Not saying numbers are right or wrong (and the main solar evangelists I know are more concerned about the perceived environmental benefit not economics). However I used to be a naysayer about solar economics, with a 15 year break even point for most people... right up until Russian invasion of Ukraine and electricity price turmoil at which point I stopped naysaying.
One factor I'd ignored was the security/hedging aspect. It may insulate you to a certain extent from energy bill turmoil in future. I think it's safe to assume that people's electricity consumption will increase (when EV become mainstream) and electricity prices will only trend upwards. So 15 years based on today's prices might not be the full picture?

 

[huwg]

Break even point is not really a useful economic measure in my opinion. If you leave your 5k in a stocks and shares ISA, and get 4 percent return on it (after inflation adjustments), you would have just over 9k in 15 years.

Obviously there are other benefits to solar, than financial reward, and there are a bunch of assumptions in forecasting what the price of energy and the stock market will do!

Worth thinking about the financial implications on a bit more detail.

 

[Lankyman]

I don't know if anyone's posted this guide to solar panels from moneysavingexpert

Solar panels – are they worth it?

Solar panels can offer savings on your energy bills. Discover if solar panels are worth it for you and whether you can instal them in your property with MoneySavingExpert.

www.moneysavingexpert.com

 

[Jenny P]

I don't know if anyone's posted this guide to solar panels from moneysavingexpert

Solar panels – are they worth it?

Solar panels can offer savings on your energy bills. Discover if solar panels are worth it for you and whether you can instal them in your property with MoneySavingExpert.

www.moneysavingexpert.com

Worth noting that those of us who went in at the start of the solar PV got a rate of payback which was guaranteed for 25 years - so until 2036 for me. This rate still applies but if you install them now you get a much lower rate and this matters. With the higher rate in 2011, we paid back the cost within 4 years - it will take longer now.
The other bonus was that the neighbour's tree, which shaded the panels in the middle of the day, was cut down 4 years ago so that boosted the system greatly.
Alas you can't take it with you when you move - and the person who takes over the house and the PV system will get a lower rate than you do, not sure how much lower.
Never regretted having them and paying £4000 for an upgrade/refettle 9 years ago was worth while: paid for itself within 3 years.
So the calculations aren't so clear now but the long-term security/hedging aspect, mentioned earlier, has got to be worth considering.

 

[alanw]

Worth noting that those of us who went in at the start of the solar PV got a rate of payback which was guaranteed for 25 years

What rate are you getting? E.ON have just quoted me an "enhanced export rate" of 21p/kWh, the standard being 3p.

 

[ChrisB]

There are two separate systems for generation payments. Feed In Tariff (FIT) was an incentive for early investors and set at a level that, given the price of panels at that time, would make it cost effective. FIT is paid at the rate when your panels were installed, plus RPI, guaranteed for 25 years, provided the panels remain as installed. Any replacements must be like for like. Despite the name, FIT is paid on what's generated, irrespective of whether it's exported or not. As the price of panels dropped, the FIT rate dropped until it was stopped altogether for installations after 2021. If you were eligible for the peak rate of FIT, it's now over 70p. If you're receiving FIT, you can also get a small payment, something like 3p, for what you export.

The new scheme is the Smart Export Guarantee. I don't know in what way it's Smart or Guaranteed, and the rate varies depending on supplier. EON are offering 21p on what you actually export. You cannot get SEG rates if you are getting FIT.

 

[Badlad]

Octopus flux best export rate is between 16.00 and 19.00 @ 29.25 pence per kWh. The battery does everything it can to discharge to the grid during this time.

The cheapest import rate is between 02.00 and 05.00 at 16.76 pence per kWh. This means in winter especially when the sun don't shine you can fill up the battery in the early hours at the cheaper rate.

It's another factor to take into account.

 

[Pitlamp]

There's a lot of really valuable information coming together here folks; thank you.
An example of this forum at its best.

 

[Robert Scott]

I especially liked Jane's use of boiling the electric kettle for washing-up water rather than using gas-heated water particularly as I have a combi gas boiler some distance from the taps. However, how I link the kettle to the showers remains a bit of a conundrum.

 

[Leclused]

Just a fun fact about 2025 :

Yesterday the yearly 2025 production went over the total producten of 2024. This year is going to be awesome

 

[Ian Ball]

No offence meant to our Europoean buddies, but the idea of buying energy from our neighbours is slightly annoying to me when a solar panel on every roof that faces south would be effective in reducing that need.
As I look at it we are buying 7.5% of our energy on the national grid from France, Belgium, the Netherlands and Denmark 2.73GW today.
I'd be more impressed if national pride which seems to be currently in the form of buying a flag from China and strapping it to a lamp post, would help in making the UK an exporter of energy not an importer.

 

[wellyjen]

No offence meant to our Europoean buddies, but the idea of buying energy from our neighbours is slightly annoying to me when a solar panel on every roof that faces south would be effective in reducing that need.
As I look at it we are buying 7.5% of our energy on the national grid from France, Belgium, the Netherlands and Denmark 2.73GW today.
I'd be more impressed if national pride which seems to be currently in the form of buying a flag from China and strapping it to a lamp post, would help in making the UK an exporter of energy not an importer.

If China could make solar panels with St George crosses and union flags on them, they would have a winner.

 

[Ian Ball]

If China could make solar panels with St George crosses and union flags on them, they would have a winner.

You're on to something there

 

[mountainpenguin]

We have solar my one regret is that I didn't get an inverter that's compatible with

GitHub - dalathegreat/Battery-Emulator: This revolutionary software enables EV battery packs to be easily reused for stationary storage in combination with solar inverters

This revolutionary software enables EV battery packs to be easily reused for stationary storage in combination with solar inverters - dalathegreat/Battery-Emulator

github.com

this would let me swap the old battery in our leaf for a 40 (~3k) and then use the old battery as a house battery till it finally dies.
Its made our bills much lower but isn't quite generating enough to charge the car during the day

 

[darren]

No offence meant to our Europoean buddies, but the idea of buying energy from our neighbours is slightly annoying to me when a solar panel on every roof that faces south would be effective in reducing that need.
As I look at it we are buying 7.5% of our energy on the national grid from France, Belgium, the Netherlands and Denmark 2.73GW today.
I'd be more impressed if national pride which seems to be currently in the form of buying a flag from China and strapping it to a lamp post, would help in making the UK an exporter of energy not an importer.

That is how the system is designed.

When Norwegian hydro power, and French nuclear is cheap, often due to different peak times we import. Occasionally we export.

The flags are current and annoying (though better than football hooliganism, the traditional pass time of the painters), but nothing destroys an argument quicker than an appeal to national pride.

 

[kay]

I especially liked Jane's use of boiling the electric kettle for washing-up water rather than using gas-heated water particularly as I have a combi gas boiler some distance from the taps. However, how I link the kettle to the showers remains a bit of a conundrum.

Replace your shower by an electric one? Which is in effect a leaky kettle.

 

[ChrisB]

We've replaced our kettle with a boiling tap (a cheap one, not a Quooker). The reservoir is well insulated so it means we're not boiling extra water in the kettle that cools before the next use. I use it for smaller amounts of washing up in preference to the combi boiler. It's probably fairly neutral on electricity use, to be fair, but it's very convenient for cups of tea, boiling veg, rinsing cat dishes, etc.