Solar PV – Savings vs. Costs

Short Term Cost Against Long Term Investment. Could This Be The Answer To Pensions?

If you had £10,000 to invest, would you place it in a pension or invest in securing power to your home for the future? With annuity rates at an all time low and electricity prices set to sky rocket, the decision is not as clear cut as you may think.

Imagine what it would be like if you could save money whilst helping the environment.

Could the solution be a Solar PV System? This article does the research for you and aims to give an overview of how a PV system works and could work for your property.


Solar PV System Components

Understanding how a solar PV system works, the different types of systems available and how it relates to your property can be a bit of a jargon filled minefield. With terms like solar payback, return on investment, feed in tariff, panel efficiency and many others being bandied around, it can be hard to know where to start.

Fear not, this handy guide aims to give an overview of the technology, the installation, the money and the return.


What is Solar PV you ask?

Solar PV (Photovoltaic) Panel systems work by converting light into electrical power. The systems are available in many different sizes and range from small residential to large commercial. The most common residential PV system is 4kWp using 16 solar panels, covering an area of around 25 square meters (16m x 1.6m).

The panels soak up the sun and daylight in general and convert it into clean electrical energy via the brains of the system, the inverter.


Different Kinds of Solar Panels

That’s right there are different types of solar cell, and hundreds of manufacturers. Now it’s unlikely (unless you are as geeky as the TGG office staff) that you’re going to know about the differences between various solar cells and panels. Right?

So we’ve done the research for you! Don’t worry we’ll keep it brief and tell you the headlines.

Monocrystalline solar cells (made from single crystals grown in isolation) are used in the most efficient panels at 15-22%, but this makes them the most expensive.

Then you have Polycrystalline solar cells, which are cheaper than Monocrystalline solar cells, but their efficiency is lower at 13-17%.

The cheapest option is Morphous solar cells, which are the least efficient overall at 9% but they are also more efficient in low light. Morphous cell panels are rarely specified in the UK market.

Now you may be wondering what we’re talking about when it comes to the different levels of efficiency for these panels.

Efficiency figures tell us how many Watts of power are produced in a square metre. For example, 100% efficiency would produce 1,000 watts of power per square metre of solar panel. The most efficient solar panels on the market are currently around 20% and this is gradually increasing as manufacturers improve cell production. The more efficient the panel the better the power production of the panel and the greater the return on investment. So you really do get what you pay for in this case.

Solar PV panels themselves will last for around 30 to 40 years with an expected 0.5% to 1% annual degradation over time.

Solar PV


The Inverter

The other main component of a PV system is the inverter. This is the brains of the PV system and converts DC current from the panels into AC current to be used in the property or exported to the grid.

Available in a range of sizes and from a number of manufacturers they have a life expectancy of 5 – 10 years and will likely need replacing within 20 years. Having worked with a number of inverter manufacturers, we certainly have our favourites.

Inverter


Fixing Solar Panels To The Roof

It’s all well and good talking about attaching solar panels to a property’s roof, but how on earth is it done?

Depending on roof type it can vary but in simple terms steel and aluminium frame work is screwed directly to the roof trusses. Tiles are removed temporarily, brackets installed and tiles replaced. Aluminium ‘rails’ are then secured to the brackets and PV panels fixed on top.

There are various manufacturers in the market and they all do the same job. From a purchasing perspective all the kit we use is tested to the same high BS and MCS standards and is built to last.

Of course you don’t have to fix panels to the roof, ground mounting is also a viable option.

Solar PV Roof Mounting


Show Me The Money!

Apart from being an environmentally friendly technology solar PV systems save money and can provide a return on investment to owners.

As electricity prices increase a PV investment becomes better and better!


So How Much?!

Talking in round numbers a 4kW (typical UK install) PV system will produce 3,600 kwh’s per year (more in the South, less in the North).

By generating your own electricity you do not need to import it from the grid. Assuming you use 50% of the generation (of course using 100% would be best) you would be saving £306 per year. If you used 80% of your generation you could save £490 per year.

As a system owner you will get paid for renewable generation through the government Feed In Tariff at a rate of 4.04p/kW. This totals £145 per year. The FiT lasts for 20 years.

As a domestic PV system owner you are also paid for the PV generation you send back to the grid, or export. This is a deemed figure based on the assumption that 50% of the energy generation will be used in the property and 50% will be exported. This figure equates to £91 per year.

So in total you can expect to receive a financial benefit of between £550 and £800 per year depending on your energy use.

4kW PV systems currently retail starting from £5,000 installed so its easy to see how a PV system will pay for itself in well under 10 years and could be nearer to 5 with smart energy use.

Return Projection Table

Now let that sink in and we’ll run through the figures and financials again at the end of the article.


You Like The Product And You Like The Price. So What Else?

Ok enough of the double-glazing patter, let’s get serious.

We’ve demonstrated the simplicity of a PV system and the great returns it will yield, the question you are no doubt dying to ask: Would PV be viable for your property?

Fear not you can work this out using Google Maps and some basic guidance.


Find Out Using Google Maps

You can calculate what size system could fit on your roof and also how many kilowatts of energy your house could produce in a year just by using Google Maps (and a bit of TGG wizardry).

Firstly, let’s find out which direction your roof faces.

Type your postcode into google maps, zoom in and locate your property. The top of the screen is always pointing north, right is east, down is south and left is west.

The ideal roof orientation for Solar PV is south facing as it will receive the most sunlight throughout the day. Think about a South facing garden. However, the sun rises in the East and sets in the West so any orientation from East to West is suitable and will yield good PV generation. We don’t recommend installing panels on North facing roofs for residential properties.

Make a note which way any suitable roof spaces face.

Secondly, you need to calculate how much open roof space you have and the orientation of the property.

This can be done using the measure tool on Google maps. To calculate the length and width, you can use Google Maps. Find your house and zoom in as close as you can. Once you’ve found your house, right click the mouse and select measure distance. (the bottom option)

Google Maps

After that, click on one corner of the roof and then move across to the other end click to find the length. Next measure the gutter to ridge distance.

Google Maps 2

Once you have the two dimensions simply multiply the two together to get the total area of your roof.

This will help you figure out how many solar panels you can fit on your roof.

Thirdly, we need to know the pitch of the roof. 30 degrees from 0 (i.e. flat ) is the best on average over a year however anything from 5 degrees to 65 degrees will produce a good amount of energy. This can just be an estimate based on a visual inspection of the roof from outside your property.

Finally, you will want to find out how much sunlight the area you are in receives annually. Although not as much as Southern Europe the UK has consistent levels of sunlight. The image below shows the differing amounts of sunlight throughout the country.

UK Solar Map

To find out how much sunshine you will receive then please visit the following page.


Batteries

So that’s what a PV system can do, but how do you maximise the generation? Take centre stage battery storage. Rather than sending unused PV generation to the grid, store it and use later!


What Are Battery Packs And Why Would I Use One?

There is now the option to store your excess energy using home battery storage. This means any energy you do not use, you can store using a battery and use it another day.

This will greatly impact the amount you spend on energy bills, especially on cloudier days. Imagine being able to use solar energy when it’s pouring down with rain.

When it comes to choosing which battery to use, you have 3 choices. Lead Acid Batteries are the cheapest kind of battery and have been used for renewable energy systems for a long time. The issue with these though is the fact they are limited on the amount of charging cycles the can handle before you need to replace them.

Next you have Lithium Ion Batteries, which are the most popular batteries, they are more expensive than the lead acid batteries but they last longer so it works out.

Lastly we have Flow Batteries, which are a new kind of battery that can be charged and discharged endlessly. The issue with these batteries is that they are more expensive than the lithium ion batteries and are a lot more complex, but might be worth investing in.

Along with the battery system, you will need a BMS. A BMS (Battery Management System) keeps check on key operational parameters during charging and discharging such as voltages, currents and the battery internal and ambient temperature.


But This Is All Going To Cost A Fortune, Right?

A fully fitted solar system with a battery pack and monitoring system would cost approximately £10,000.

So what’s better in the long term – saving your money for your pension or investing in solar panels?


So, Does Investing In Solar Panels, A Monitoring Systems & Battery Backups Really Add Up?

The average household uses approximately 5,000 kwhr of electricity every year.

Today a kilowatt hour costs approximately 17p.

Your solar panels are going to generate 3,600 kWhs representing a first year saving of £550 pounds.

BUT energy costs are increasing right?

As the following articles show conclusively.

Article One. Article Two.

These forecasts could be wildly under-estimated. Between 2003 and 2013 electricity prices rose by 120% in just ten years.


So, Energy Prices Are Going Up Whilst The Cost Of Solar Is Coming Down?

In 2017, solar panels at 70% cheaper than they were in 2010, meaning they’ve come down a lot in price. This can only be a positive thing as the price of energy rises every year, so this is the perfect time to get on board and go green.

Factoring in electricity price increases over the next ten years could mean that your 3,000-kilowatt hours of energy may be worth £1,200 per annum in ten years time.

For a pensioner to generate that amount of money from their pension, their pension pot would need to be approximately £30,000 at today’s annuity rates.

So, if you are looking to retire in the next ten years, investing in solar PV is definitely worth considering.


But Could You Save Even More Money?

A way of saving even more money using your system is by registering for the FIT scheme. The FIT (Feed-in Tariff) scheme is set up so the Government will pay you for every unit of energy you produce using renewable technologies such as solar PV panels. Although the Feed in Tariff has reduced over the years installation costs have also tumbled.

To get the most out of your solar PV panels, install them as soon as possible to get the best tariff. Once you are registered and locked onto a tariff, you will receive payments regardless of future tariff cuts for 20 years.

There are 3 ways to benefit from the FIT scheme. The first way is your energy supplier will send you a payment for all the energy you simply generate yourself. Another way to make some money is by exporting any excess energy you don’t use back to the National Grid. On top of all this, you’ll be saving money on your energy so it’s a win.

By using solar PV systems you are producing your own electricity, which protects you from the rising energy prices that are almost guaranteed to double over the next ten years.


The Environment Benefits

What if you could lower your carbon footprint whilst saving some pennies?

Sign me up, right?

By using solar PV panels, you are producing clean energy. That means you’ll be reducing carbon emissions by up to 1 tonne per annum. This is only a good thing for the environment and you also will reduce water pollution.

Power plants require huge amounts of water for all of their cooling requirements. By using solar energy, it is creating no pollution of local water solutions and keeping the water clean.


Is It Worth It?

1. Adding Solar panels to your home secures your energy for the future.
2. Pay back is in less than 10 years.
3. After that you have free energy.
4. Energy prices are escalating.
5. Your helping the environment.

Adding a solar PV system to your house, automatically adds value and makes it more attractive to buyers if you’re looking to eventually sell.

So, which of the following statement are more likely to be true?

1. You know what your electricity bills are likely to be when you retire?
2. You know that your pension will be sufficient to pay your electricity bills in the future?
3. You know how much the sun shines so can estimate how much electricity you can generate using solar panels?
4. You know how much electricity you will use on an annual basis when you retire?

The first two are out of your control but the last two are in your control.

Overall, if you’re willing to make the investment and wait a while, it will definitely pay off and you will be doing your bit to help the environment.

Solar PV 2


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