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Photovoltaic panels – solar power

Solar power is a much-discussed issue today, as we’re all interested in lowering our fuel bills and many of us are concerned about our carbon footprint too. But are they really a financially viable alternative to mains power? With different sources offering wildly differing figures, trying to get the information you need is a minefield. If you are considering photovoltaic cells, it is worthwhile looking into micro wind turbines too.

Both wind and solar systems currently benefit from ‘feed-in’ tariffs set up by the government. The 25-year government feed-in tariff is made up of a ‘generation tariff’ (a fixed rate payment based on the total amount of electricity generated) and an ‘export tariff’ (paid on units fed back into the national grid). Basically, any surplus power from your system feeds into the grid, and the government pays you for it. Fuel bills effectively become lower and eventually the tariffs pay you back enough to offset the initial cost of materials and installation. This government subsidy has encouraged lots of companies to set up schemes which offer free solar panels and free installation, but if you take advantage of these ‘offers’ you will miss out on the bulk of the savings available, as they usually siphon off all the tariff payments.

UPDATE – The UK government has announced that it is halving the FiT (Feed-in Tariff) payments for domestic solar installations commissioned (that is, in working order) after December 12th 2011. If you can get your panels working before then, you get the current rate of subsidy for 25 years. If not, you’ll get the reduced rate.

Types of PV panel

There are four different types of solar panel currently available: monocrystalline, polycrystalline, hybrid and amorphous. All are made from silicon, but they’re not all the same. For instance, monocrystalline panels are more efficient than polycrystalline, but cost more. Hybrid panels, a combination between monocrystalline and amorphous, are even more efficient than monocrystalline, but…cost more. Amorphous coatings are flexible and cheap but not as efficient as the other three. Their output drops over time, especially in the first few months after which they are basically stable. So, check which type you’re buying when you order.

Regardless of the panel type, buying and installing a PV system has is a high initial cost – usually between £8,000-14,000 depending mostly on size. PV panels are heavy, so make sure your roof can take the additional weight before installing. Also, make sure your roof is in good shape – you don’t want to have to take all the panels down again in order to replace the tiles. PV panels work even on cloudy days and do not need full sun to generate power, but they need an unshaded south-facing location to work most efficiently.

solar panels, image

We probably all want them...but are they really worth it?

Three abbreviations are commonly used when talking about energy output and consumption:

  • kW (kilowatts) are the units used for expressing how much power a PV system is generating. A single bar on an electric heater is usually rated at 1kW. In this context, it’s the rate at which power is generated.
  • kWp (kilowatt peak) is the measure of a PV system’s peak output. In this context, it’s the maximum rate of power generation.
  • kWh (kilowatt hours) are a measure of total energy. You’ll see kWh on your electricity bills as the unit used to calculate how much power you’ve used. You can’t hold electricity in your hand or store it in a fuel tank, but using kWh lets you measure it as if you could: in this context, they’re the total amount of energy generated over time.

Payback time

Payback time is simply the length of the period that an investment takes to pay back the original outlay. On the face of it, it should be simple: and yet the method that companies are required to use to calculate it is flawed. It does not have to take account of your latitude, to the tilt or orientation of your roof, or the amount of shade – nor does it have to take into account the cost of replacing the inverter (which transforms the current into usable AC) if necessary. Because of these factors, the actual payback time may be a year or two longer than the one you are quoted. To minimise these problems, get three quotes from MCS certified installers. In each case, ask for a technical survey rather than a sales visit. If you get a competent surveyor he should make written records of measurements such as the orientation of the roof, and should look at the inside of the loft and at your consumer unit. The quote they provide should be in-depth, and should include scaffolding costs, panel and inverter information and the company’s terms and conditions. You should also be given information on how the payback time, rate of return and savings have been calculated.

A few conflicting views

According to the Consumer’s Association, the average PV system to be rated at 2.7 kW and to cost around £12,000, complete. According to them this ‘average’ panel array (installed on a south-facing, 30 degree roof in the Midlands) would produce an annual generation tariff of £1015, an annual export tariff of £36, and an annual fuel bill saving of £147. Total, £1,198 per year. If the installation cost was £12,000 it would therefore pay for itself in 10 years and generate a net profit of £17,953 over the full 25 years of the tariff. They also say that ‘the Energy Saving Trust estimates that a 2 kWp-sized system can save you up to £200 a year on your electricity bill and meet 40% of your electricity needs.’

Figures from installer websites should probably be counted as sales propaganda until proven otherwise. Figures on them vary widely, but here’s an example: an average PV array will generate the equivalent of £25,000 of tax-free income over 25 years, and will save around 1200 kg of CO2 per year, or 30 tonnes over its lifetime. It will also reduce average energy bills by between 40-50% per year. Solar electricity is, according to them, ‘100% green and 100% sustainable’  – although the same may not be true of the panel manufacture.

However, Mike Berners-Lee (the author of “How Bad Are Bananas”) calculates that after maintenance the payback time of an ‘average’ system is more like 14 years. But he also points out that at the end of the payback period, you are financially right back where you started without having gained a penny of interest on your original investment of £10,000. Given that you could have easily generated some interest on that money, the above calculation suddenly seems optimistic. Of course, that’s not going to bother you much if you’re fitting PV cells to go off-grid, to reduce your dependence on mains supply, or to reduce your carbon footprint.

So, who do you believe? Before you decide, it’s worth looking at micro wind turbines as well – so long as you have understanding neighbours – as despite having a shorter feed-in tariff the payback time is generally faster.

Solar power for free?

There are also ‘rent-a-roof’-type lease deals available where a company installs and maintains a PV array on your roof for little or no charge. In effect, you’re renting out your roof for someone else’s panels in exchange for some ‘free’ daytime electricity. It should come as no surprise that the main benefit (the generation and export tariffs) goes to the providing company. This is worth far more than the savings you make on your electricity bill, so these schemes are not the great deal that they seem to be. If you can afford to, buy the system yourself. Even if you have to take out a loan to do it, you are likely to be better off in the long run.

Useful links:

The Energy Savings Trust

PV system comparison site

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