April 22, 2008

links for 2008-04-22

Posted by delicious at April 22, 2008 09:30 AM | TrackBack

This blog post is on the personal blog of Adrian McEwen. If you want to explore the site a bit further, it might be worth having a look at the most recent entries or look through the archives or categories over on the left.

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Had to comment on that Guardian article. On the face of it it looks good: invest £8500 in photovoltaic panels, and save £500 per year on your electricity bill!

Working on a basis that the solar panels last for 25 years, that would add up to a saving of £12500 over the lifetime of the panels.

But the 'investment' of £8500 isn't really the full cost. Ashley received a 50% subsidy meaning the true cost of installing the panels was really £17000 (as he admits in the article). On top of that he will receive a further £50 subsidy from the Renewable Obligations scheme in the first year, and £150 in subsequent years. All of this he has wrongly factored into his calculation as a return on his investment.

So if we correctly count the subsidies over the 25 year period as a cost, the total cost (to Mr Seager and the taxpayer) is now £20650. And all for a total for a total saving of £12500. I'm not sure how much PV panels are worth once they've reached the end of their lifetime but I doubt it'd cover the shortfall of £8150. That sounds less like an investment, and more like a great way to throw money away :-(

And all of this ignores the fact that Mr. Seager admits to also having taken drastic measures to reduce his energy usage at the same time as installing the panels - which means he could have achieved a portion of his £500 per year saving without ever having installed the panels in the first place!

Posted by: Andrew at April 25, 2008 08:56 AM

True, he'd have achieved a portion of it without installing the solar panels, but if you take the basic "our 3kw peak solar panels produced 2,730 kwh over the year" and use the without-RO price of 12p that he gets for each KWh, then two-thirds of his saving is directly from the solar panels.

And he says that the cost of panels like his is coming down dramatically - in Germany such a system, without any subsidy, would cost £9,000. Now, I can believe that it would cost a bit more to get such a system in the UK, but surely not £6,000 more?

To be honest I'm surprised he went for PV solar before installing solar water heating, but it's interesting to see that solar can provide enough electricity for a fairly standard house and is at, or close to, the point where it's economically viable.

Posted by: Adrian at April 25, 2008 10:16 AM

I think my main problem is that it misrepresents solar PV as an investment along the same lines as putting money into a bank.

However, he does point out one of the true benefits of solar panels when he compares it to buying a new kitchen or bathroom: not something one can necessarily financially rationalise, but certianly something that may add value to your home, or make the purchaser happier!

Interestingly in Germany, there is still an exctremely high level of subsidy for solar PV, but on generation rather than installation. Legislation fixes the price paid for solar PV energy fed back into the grid at 3 times retail price (at a cost to tax payers and consumers of 5 billion Euros per year). I'm not sure if the supply/demand economics of that would lead to cheaper solar PV panels?

I have no doubt that solar PV will eventually become cheap enough to become economically viable in the UK, but until then perhaps we'd be better spending our subsidy pounds on properly insulating homes and installing modern, economical heating systems?

Posted by: Andrew at April 25, 2008 11:23 AM

I really agree. but we should all really use solar energy to make a difference.

Posted by: Solar panels at January 30, 2009 05:38 PM
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