Solar PV. Question

[JohnD]

The fact remains: pv cannot contribute to the UK's system maximum demand and therefore cannot reduce the UK's generation power requirement. Not even by one tiny kW.

"Fact"?
You haven't expressed yourself clearly.

By "generation power requirement" I take it you mean the installed generation base of nuclear, gas and hydro stations, which is sized to cope with the probable peak load?

you surely don't mean the actual peak load, which at any particular time on any particular day will have a certain amount being fulfilled from micro, and the load on the grid will therefore be reduced by whatever that amount might be at that time.

 

[flameport]

With Solar PV and the FiT, most customers will see their investment back in 10 years. They will probably need to replace the inverter (usually mounted indoors, costs nowadays are between £1-1.5K). Lifespan of PV is around 25 years. Outcome, somewhere between £20K and £30K cash positive.

The same money in a savings account will do better - even at a ridiculously low and and totally unrealistic 2% over the whole 25 year period.

Untitled

• flameport
• 21 Aug 2011
• 1

 

[JohnD]

I don't see the indexing of the FITS payments in your table.

How many kWP is your chosen £15,000 installation rated at?

 

[DetlefSchmitz]

For me the answer about private PV installations comes from a local mature eco warrior who serves on a couple of committees and NGOs promoting alternative energy sources. He evaluated private PV systems and the "benefits" of linking them into the grid. He found them non economically viable. He has instead solar water heating which he considers is cost effective, simple and more reliable than the equipment necessary for PV.

Fascinating.

When you do the sums for Solar Thermal, the break even point on investment is way beyond 20 years. Most systems will need the anti freeze sorting every 5 years or so, and a new pump every 10. Will probably need a couple of new expansion vessels in that time, too. Worcester-Bosch offered me a free system for my house 6 yrs back and I'm afraid I couldn't see it being worth my time to fit it!

With Solar PV and the FiT, most customers will see their investment back in 10 years. They will probably need to replace the inverter (usually mounted indoors, costs nowadays are between £1-1.5K). Lifespan of PV is around 25 years. Outcome, somewhere between £20K and £30K cash positive.

Your friend needs to get a real job, I think. Or perhaps his maths lets him down.

My solar thermal system will have easily paid for itself inside 5 years. It may be different if you pay someone else to do everything for you instead of doing it yourself.

 

[flameport]

I don't see the indexing of the FITS payments in your table.

Not included. But then neither is the fact that the output of the panels will decline over time, or any other costs such as inverter replacement as mentioned earlier.

How many kWP is your chosen £15,000 installation rated at?

Those figures are just based on the widely used sales spin of people getting their money back in 10 years. £15000 system creating £1500 per year. Or any other combination, £10000/£1000, £5000/£500 - it all works out the same.

 

[JohnD]

the figures might not be up to date.

For example I saw a recent quotes of:

5995 predicting 618
7630 predicting 730
8850 predicting 973

and of course it depends where in the country you are.

there is another misleading aspect of the table you pasted

It assumes that all the interest earned on the bank deposit is reinvested, net of tax, whereas all the income from the PV is squandered.

If you show the PV income as reinvested, or the interest as being spent, the results reverse.

 

[bernardgreen]

Does he have any views on the merits or demerits of the FIT scheme?

We haven't discussed that recently.

However another person who is involved in the "official" promotion of alternative energy considers that Feed In Tariff schemes are "somewhat dubious" and carry a high risk of "financial failure"

 

[Stoday]

You haven't expressed yourself clearly.

Sorry about that; I'll try again.

By "System maximum demand" I mean the maximum demand in a year that has to be met by generation capacity. Recently the SMD was as follows:
28/11/05 59.4 GW
23/01/07 57.4 GW
17/12/07 59.5 GW
06/01/09 58.0 GW
07/01/10 58.1 GW
07/12/10 58.9 GW
The SMD occurred over the half hour 1700 to 1730 in each of the above days.

Clearly, pv cannot contribute to the demand at times of SMD because it's night.

At every other time in the year the demand is lower, so some generation must be idle. If pv generation is included, then even more conventional generation must be idle. So far from making a real contribution to meeting demand, pv generation is only increasing the amount of idle generation plant.

 

[Stoday]

there is another misleading aspect of the table you pasted

It assumes that all the interest earned on the bank deposit is reinvested, net of tax, whereas all the income from the PV is squandered.

If you show the PV income as reinvested, or the interest as being spent, the results reverse.

If we are to count the interest that can be earned by investing PV income, we must also charge the cost of income lost from the capital required to finance the PV.

Here's flameport's table with credits for income and charges for lost income. With a 25 year investment it should be expected that the return on personal income would be greater than 2%. If a higher rate is used, the outcome is even worse for PV.

Untitled

• Stoday
• 22 Aug 2011
• 1

 

[JohnD]

If we are to count the interest that can be earned by investing PV income, we must also charge the cost of income lost from the capital required to finance the PV.

that has already been done by showing the forgone interest in the right-hand column.

But the table is dishonest and misleading by including net income reinvested in the right hand column, but not in the left-hand column. It looks to me like the table was deliberately constructed to mislead.

 

[flameport]

But the table is dishonest and misleading by including net income reinvested in the right hand column, but not in the left-hand column.

An even simpler method:

£15000 in a bank account, 2% interest per year, so £300 per year. Also assume the interest is NOT reinvested.
£300x25 years = £7500. You still have the original £15000 in the account, so you have a total of £22500 over the period.

PV panels £15000 initially, £1500 per year
£1500x25 years = £37500. You do NOT have the original £15000, so once again, you have a total of £22500.

Identical in this example, but a 2% return is exceptionally poor, you can get over 4% for a savings account today, at a time when interest rates are as low as they have ever been.
The savings account is also a guaranteed secure income, the panels are not.

 

[JohnW2]

or does it come from the profits of the company which would otherwise be distributed to shareholders?

Theoretically possible, but shareholders would obviously be less than enthralled by that. It's far more likley that the cost would be passed on to customers in order to maintain profits/dividents, isn't it?

Kind Regards, John.

 

[JohnD]

except that inflation will erode the value of your "money in the bank," frequently faster than the interest it earns

But the FITS are index linked, and also the cost of electricity you get free from your panels will only go up over the 25 years. Nobody knows how much by. The panels are warranted to give at least 90% of their initial rating after 10 years, and 80% after 25 years.

 

[JohnW2]

except that inflation will erode the value of your "money in the bank," frequently faster than the interest it earns. But the FITS are index linked, and also the cost of electricity you get free from your panels will only go up over the 25 years. Nobody knows how much by. The panels are warranted to give at least 90% of their initial rating after 10 years, and 80% after 25 years.

There are clearly lots of factors, many of which cannot be precisely quantified, which one can go on speculating/arguing about ad infinitum. However, the impresion I get is that, with FiTs as they are, the financial return resulting from 'investing' in such an installation is probably broadly in the same ballpark as the return achievable by investing in a more conventional (and more certain) fashion.

Kind Regards, John.

 

[Stoday]

The panels are warranted to give at least 90% of their initial rating after 10 years, and 80% after 25 years.

An absolutely worthless warranty other than for one or two odd faulty panels.

Who knows what the performance of the panels will be in 25 years time? The type currently being installed have not been in production for 5 years let alone 25. If most fail the warranty, the company supporting the warranty will fail and nearly all its customers can go whistle for their warranty.