I had solar panels installed as a home environmental project. Have the benefits as an End-User been realised?
Scope of Supply
2.0 KW system consisting of 8 x 250W solar panels, inverter, generation meter costing £5750 and installed in 2012
Assumptions
80% electricity used in the property
Property at the beginning pays 10.5p/kWh (actual 13p)
FIT generation payment starts at 21p/kWh and guaranteed for 25 years
Tariffs increase by an RPI of 3% a year
Solar panel performance degradation of approximately 0.9% per year
Initial Estimate (first 10 years)
Carbon emissions saving 8,940 kg
Generation 15764 kWh
FIT payments £4068
Electricity used in property 12611 kWh
Grid usage saving £1736
Payback of original sum 9.9 years
Return on investment (25yrs) 10%
Actual 10 years (2022)
Carbon emissions saving 10,919 kg
Generation 19254 kWh (22% more than estimated)
FIT payments £4912 (21% more than estimated)
Electricity used in property 17136 kWh (89% not 80%)
Grid usage saving £2570 (48% higher than estimated)
Payback of original sum was 7.5 years (sooner)
Forecast Return on investment (25yrs) now 30% (3 times original)
Note: I had to replace the inverter after 9.3 years costing £700. This has not been factored into the calculations but would have increased the payback to about 8.5 years
Discussion
Yes, so far, the benefits have been realised but I was very lucky to have:
- Higher generation than estimated
- Higher percentage usage of solar energy by my home
- Be able to use FIT payments
Without FIT payments I would only have paid back about 45% of my initial investment in 10 years. Maybe pay it all back in just under 20 yrs. No ROI in 25 years
Market cost of panels seem to be related to the savings payback and government grants