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Author Topic: Does adding a second 4k system reduce the original fits payment?  (Read 5352 times)
shambolic
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« on: October 16, 2012, 09:41:11 AM »

I'm thinking of adding a second 4k system with it's own inverter and generation meter. As I understand it i can now do this without my previous system counting as a new contract but what I don't know is if the fits rate of my first system will be reduced from it's current rate because I will then be generating more than 4K. Do they still have the staggered system according to what your capacity is?
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M
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« Reply #1 on: October 16, 2012, 10:19:17 AM »

Nope, your old FITs won't be affected, but your new system will get the 4-10kWp rate as it will be calculated on the sum of the systems. They can even share a TGM, but generation will be apportioned by kWp, not orientation, so only do that if the new system will outperform the old system on a kWh/kWp basis (very unlikely), otherwise older (higher FITs) units will be classed as newer (lower FITs) units.

Do you have an EPC, if not get one on or before the extension commissioning date, not after. **Really, really important or you'll get the 7p rate**

http://www.navitron.org.uk/forum/index.php/topic,17651.0.html

Mart.
« Last Edit: October 16, 2012, 10:21:32 AM by M » Logged

Just call me Mart.     Cardiff: 5.58kWp PV - (3.58kWp SE3500 + 2kWp SE2200 WNW)
shambolic
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« Reply #2 on: October 16, 2012, 11:18:24 AM »

Thanks for that. Would this be the best use of my money investing in more PV? I looked into water panels but it seemed very complicated and fraught with pitfalls.
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johnuready
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« Reply #3 on: October 16, 2012, 12:05:03 PM »

Look as if you we're investing the money, the return will be on the purchase cost. Compare that against where you have the money now and take a long term view, inflation and tax
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Greenbeast
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« Reply #4 on: October 16, 2012, 12:05:25 PM »

Thanks for that. Would this be the best use of my money investing in more PV? I looked into water panels but it seemed very complicated and fraught with pitfalls.

 Shocked

solar thermal is amazing and well worthwhile, especially if you diy it.
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A.L.
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« Reply #5 on: October 16, 2012, 12:07:26 PM »

hello,

I if you are  in the U.K. and you want to export more than 3.68kW on one phase you are going to have to get the DNOs permission and that may mean lots of money/different standards e.g. G59 (rather than G83) if they are willing to let you do it at all
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M
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« Reply #6 on: October 16, 2012, 12:07:59 PM »

Thanks for that. Would this be the best use of my money investing in more PV? I looked into water panels but it seemed very complicated and fraught with pitfalls.

Hiya, happy to do some number crunching with you. But first you'll need to make sure that you can install more PV with the DNO. Have you checked about exceeding the 3.68kW rule yet?

As an experienced PV'er you're probably happy with how it all works, so check your orientation against PVGIS to guesstimate generation, then work out your income / cost. For my 2kWp extension a fair estimate of leccy savings may have been 80 or so, but as it was 'on top off' an existing system that exports a lot in the summer, I scaled that down to about 30 to 40, you might want to do the same, unless you can make use of the extra too.

In fact, I'm probably not a great example (investment wise) as I went for a fairly small system that points the wrong way, but I really wanted to generate some more at tea times. So I was happy to take a greener view than a financial one, but even that is a bit cheeky to say, as I had the income from the larger system to piggyback on. Even so, I think I may get a 5% to 6% return this year (and it will rise), which I'm more than happy with regardless of cost of capital.

I'll stick my neck out here and say that if you're installing 4kWp, then even with current tariffs you'll still be fine. But as I say, feel free to bounce some numbers off me.

Mart.
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Just call me Mart.     Cardiff: 5.58kWp PV - (3.58kWp SE3500 + 2kWp SE2200 WNW)
ProDave
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« Reply #7 on: October 16, 2012, 02:18:10 PM »

Just remember "return on investment" is not the only figure to think about.

say you can get 6% ROI right now. What you have to consider is that is NOT the same as putting it in a savings account paying 6%.  With the savings account, your capital is preserved.  Buying solar PV, your investment is gone. So your ROI needs to be a lot higher than a savings account, because not only has it got to give an income, it's got to repay the capital you have spent.

 
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4KW Solar PV,  4.5KW woodburner, 5KW Air source heat pump
rhys
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« Reply #8 on: October 16, 2012, 02:49:21 PM »

Just remember "return on investment" is not the only figure to think about.

say you can get 6% ROI right now. What you have to consider is that is NOT the same as putting it in a savings account paying 6%.  With the savings account, your capital is preserved.  Buying solar PV, your investment is gone. So your ROI needs to be a lot higher than a savings account, because not only has it got to give an income, it's got to repay the capital you have spent.

 
I compared with an annuity!! No capital return there.
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johnuready
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« Reply #9 on: October 16, 2012, 03:01:00 PM »

The numbers can be big, if you buy at the right cost. For instance purchased 4k system at the end of the 43p payment you would have paid 11k ish and you will pay back in 6 to 7 years with a return of 16% on investment. That's a long why off the savings account return.

That's without taking its tax free (add another 20% - 40% if higher income to return ), index linked and any switch power to DHW.

No wonder the Government did a U turn it was only to be about 6% ROI.

I not up to speed with current rates but I see that 4k systems are 6k ish and must still provide a very healthy return.
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tc847
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« Reply #10 on: October 16, 2012, 04:07:37 PM »

I compared with an annuity!! No capital return there.

But why?  There are very few cases where people would buy an annuity unless forced to by law (usually with a pension).  Annuities are not generally attractive investments so it's like comparing with the worst possible alternative!
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OSHpvgen
10 x Astronergy CHSM6610P 225W panels with 10 x Enecsys SMI-240W-60 micro-inverters 150 orientation 35 slope
ProDave
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« Reply #11 on: October 16, 2012, 05:00:45 PM »

The numbers can be big, if you buy at the right cost. For instance purchased 4k system at the end of the 43p payment you would have paid 11k ish and you will pay back in 6 to 7 years with a return of 16% on investment.

That's my point.

7 years to pay off the investment.

So then you actually start getting a "return" in year 8 of 16% and continue getting that for another 17 years.

So (allowing for returning the investment) the "return" is really only 17/25 times your 16% or just over 10% averaged out over the 25 years.

And that's before you add in any repair costs over the life of the system.

I'm not saying it's a bad investment, I'm just trying to say a "target" return of 6% in REAL terms will be a LOT less than 6% when you allow for repaying the capital. 6% return will take 16 years to repay the capital. Under the present rules that only leaves 4 years to make any real profit. So I just can't see 6% return being viable.

That's why I bought my system at the tail end of the 43p rate when I thought it was a workable return on investment.
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4KW Solar PV,  4.5KW woodburner, 5KW Air source heat pump
M
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« Reply #12 on: October 16, 2012, 06:07:27 PM »

As the cost of PV comes down, I think we should be less concerned with ROI, especially cost of capital. But, in the interests of fairness, I slapped some numbers into my handy PV calculator spreadsheet.

6,000 cost compounded 20 years @ 3.5% net.
PV income, 4kWp, second system (not necessarily optimum orientation) 3,000kWh @ 16.65p (14.4 p FIT + 2.25p export) = 500 plus leccy savings = 550pa.
Applying 3% inflation, 0.5% panel degradation, each years income reinvested in following year @ 3.5%net and compounded.
Deducting 1200 in year 12 for a new inverter.

Results:
Savings account yr20 = 11,938
PV savings account yr20 = 17,653 (plus PV system, ongoing leccy savings and export)

The balances meet at yr 13.5 or yr 12 if no new inverter needed.

(For a single system 6k, 18.25p, 3,500kWh/pa, and 100 leccy savings - Investment 11,938 : PV 24,667 crossover point 8.5 years)

Mart.
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Just call me Mart.     Cardiff: 5.58kWp PV - (3.58kWp SE3500 + 2kWp SE2200 WNW)
ProDave
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« Reply #13 on: October 16, 2012, 07:59:46 PM »

As the cost of PV comes down, I think we should be less concerned with ROI, especially cost of capital. But, in the interests of fairness, I slapped some numbers into my handy PV calculator spreadsheet.

6,000 cost compounded 20 years @ 3.5% net.
PV income, 4kWp, second system (not necessarily optimum orientation) 3,000kWh @ 16.65p (14.4 p FIT + 2.25p export) = 500 plus leccy savings = 550pa.
Applying 3% inflation, 0.5% panel degradation, each years income reinvested in following year @ 3.5%net and compounded.
Deducting 1200 in year 12 for a new inverter.

Results:
Savings account yr20 = 11,938
PV savings account yr20 = 17,653 (plus PV system, ongoing leccy savings and export)

The balances meet at yr 13.5 or yr 12 if no new inverter needed.

(For a single system 6k, 18.25p, 3,500kWh/pa, and 100 leccy savings - Investment 11,938 : PV 24,667 crossover point 8.5 years)

Mart.

Thank you that's a very well presented argument.  The crossover dates are very interesting.

I think one thing you should consider very carefully is how long are you going to stay at your present address.  If LESS than the crossover time indicated, then don't even think about it. You won't have got your money back before you leave the system for someone elses benefit, and probably won't get much, if anything extra for the house because it has solar PV.
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4KW Solar PV,  4.5KW woodburner, 5KW Air source heat pump
iantowil
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« Reply #14 on: October 16, 2012, 10:19:17 PM »

Surely Dave, people who hop house every few years are not "generally" the type to consider PV - or am I mistaken? And I think a house with the 2011 tariff would definitely command a premium for the right buyer - would for me anyway, as long as it had Sanyos and Sunnyboy of course. Just call me a solar snob  Wink
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