PV solar panels report

12/20/2010 - 04:06

I promised a report on the 4.6Kw PV solar car port a few months ago. The full year isn't quite up yet but the results are now pretty clear. Generally it's a thumbs up and the bottom line is that there is enough to pay the bank and wipe out electricity bills. I have put a more detailed description on the latest issue of 'Heating News' on the front page of www.heatingitaly.com along with a graph showing how much actual cash the production meter produced each month. If you are thinking about a PV installation I hope this will move you nearer to the reality than the sales hype does. Saluti and keep warm.

Topic

Technology

Location

Umbria

Comment

Great and well done for the feedback, I will have a look-see shortly, it's a very interesting option BUT seems risky with little/no guarantee of payback, but ............. I do wonder a little about company profiteering with regards to this stuff , or it just be my way of thinking (sadly!), S

"I hope this will move you nearer to the reality than the sales hype does." So no sales hype here then..... How much do you actually owe the bank? How many years to pay back the loan? 10 year Italian govie bonds currently yield 4.4%. (before tax). Good luck in getting 5% on your fund. What happens if you build in 0% growth (or as in Ireland, in some funds down by 40%). What is the current surrender value on your fund? What depreciation rate are you using on the pv's? What happens if electricity prices actually fall? (now lower than two years ago)? In my mind the maths only work (and its marginal) if you can deduct from Italian tax payments. But as always, stand to be corrected.

Well................what a wonderful and very direct set of questions Capo Boi............ Prett much my thinking over the last few years, I would REALLY like some equally specific answers, the shorter the better for me as I have been struggling with this for ages! There seems to be a lot of smoke and mirrors around these solar panel thingies, very much a case of pay NOW (as in - possibly go into debt) and you MIGHT save later IF things go according to plan ! I think it would be good if the energy companies or governments fund these initiatives and, if it doesn't work as planned, the individual doesn't then have to take the hit ? What on earth would (say)Enel do if we all (everyone) went down this route, they wouldn't have a business! So I can't see them (or any govenrment) allowing it to happen. Which is a shame because we should be making more out of the natural resources around here. S

Hello sprostoni, Just re-read my post and looks a bit sharp. Apologies sagraiasolar. I'm not having a go at you in particular and wish your business well. I just feel that much of the information presented on pv installations is either incomplete or selective. I'm guessing but 4.6kw of panels must cost slightly over €20,000. If they generate an income of €2,500 then the payback time is over 12 years. Add in bank financing, fund charges etc and the payback time increases substantially. I have nothing whatsoever against pv. I can see the environmental benefit and that is to be applauded. But in Germany, for example, which has long been at the forefront of take-up, generation prices have halved in recent years and due to decrease further. In Italy as in the rest of Europe, generation prices are also falling. The real winners are ultimately the manufacturers and the banks. Its possible for a bank to generate up to 10% pa in charges, interest rates etc for what in reality is a fairly low risk product for them. Its actually the buyer that bears the real risks. Until pv panel prices actually really fall (a bit like plasma and lcd tv's now), the risk reward ratio remains with the consumer.

First of all I'm not in the PV business so I'm an impartial consumer. To answer the questions: the bank takes the income for 15 years - I can and probably will pay them off before that though - The whole kit cost 32,000 Eur - much cheaper now I think. and the bank wanted us to lodge 10,000 in their fund ... yes of course if it falters we lose money. The fact remains that until we unwind the deal the electricity bills have gone away. .. and when we do unwind it we get to keep the 3,000 odd generated each year. As for electricity bills going down in the future.. that's a call you make by not having the panels... I'm more comfortable the other way.

Seems like a no brainer to me, if the panels last the predicted 25 years. Payback time is aound 8 years but you get pretty much free electricity. Better to spend your dosh on solar PV technology than a new car I'd say..

Hello sagraiasolar. Forget about your fund, thats the bank simply taking some collateral. Are you saying that you paid €32,000 for no electricity charges with the excess revenue generated going to the bank. If so, what do you estimate your electricity costs would have been. At the end of 15 years you still owe the bank €32,000? Or am I missing something. Also I was'nt talking about falling retail electricity prices. I was talking above the payment you receive for the electricity you generate. CB

Just looked again at your website. Let me see if I get this. You paid €32,000 for €3,000 of revenue. Ignoring financing costs thats a break-even of 10 2/3 years. However, you must include financing costs in the numbers (or the opportunity cost of money if you are paying up fropnt). Even at a modest 5% interest rate on your loan, your break-even shoots out to over 15 years. CB.

At he end of the 15 years the capital and interest will have been cleared from the bank and then all income from the panels becomes mine. The income does not fall year by year.... only newcomers to the scheme fix on a lesser amount each year. You asked what my bills would be over 15 years and the answer is that I estimate a coincidental 32,000. There is, of course, an opportunity cost on the 10,000 deposit if the investment fails to pay for some reason but not on the 32,000 which was never mine to start with. So: If I didn't have PV: in 15 years time I would be 32,000 poorer and I would have spent my 10,000 on bills..... then I would still have mounting bills to face for ever. With PV: over 15 years I have no bills and then the bank gives back my 10,000 and I then get the income myself and I still have no electricity bills in succeeding years. A quasi pension. One other consideration that influenced me is that practically every man, woman and child in the western world shoulders about 30,000 in government debt there could be massive inflation. I also expect the Euro to be weak relative to GBP for a while so having EUR debt is a good thing. I also had another agenda which was to proove that one could heat a big house at ZERO COST and if you own a good proportion of your PV panels that is indeed the case. What next? Anyone out there know about electric cars?

I think that he has done a good thing for himself. Ok, 32000 euro for a 4,6 kWp array is 6900 euro/kWp, which is rather high, prices are now down to 4000 euro/kWp without vat, which is 10% for pv-installations to be added on top. But Sagraiasolar also pays for the advantage of not having to put down his money up front. Leasing (with the only security for the loan in the pv-array) is normally more expensive than taking up a loan on your house and payback will extend to 15 years. As always, who has got money to spare makes the best deal as opposed to who has nothing. And to answer Capo Boi, you do not really want to over-dimension your PV-array, since you get paid 0,095 euro/kwh for your energy sale (end of year balance) while the produced energy, if you consume 100% yourself, has a buyers' value to you as it is calculated against your electricity bill, around 0,22 euro/kWh. I sit here with an xls of a typical 30 year simulation (bank loan interest rate of 4,8 % running over 10 years for an array of 6 kWp costing 26500 euro incl. vat) and would upload it for info - if I could...

Thank you Sablanico. I was also trying to say that what may appear on paper to be a 8 year payback time, can actually through leasing or otherwise push the payback period out much longer. It makes sense that sagraiasolar's deal is for fifteen years when after that all the revenue accrues to him. I would imagine this number would be based on the bank's model. Sagraiasolar, I think you are double counting. You are still effectively paying for your electricity although deducted from you revenue as Sablanico says. Its good news though that prices of pv panels are falling and I can certainly see that its possible to achieve a breakeven rate of around 10 years. I'm definitily not anti-pv as such, just anti some of the claims that have often been made on pay-back periods. Good luck Capo Boi.

not sure I get the double counting bit. There are two meters in the plot. One measures and pays the tariff on all production regardless of use and that's what the bank takes. The other domestic meter is upgraded to measure power sent to the grid and this is what kills off the electricity bills which are a completely separate issue. A comment on the high cost. The panels are mounted on a rather smart car port which is included in the cost. Also because the comune restricted the size of the car port I went for the highest output Sanyo panels which are the most expensive... even so I'm sure you could do all this much cheaper now.

I think that if 'you' do the sums and 'you' determine for whatever reason, that it is the right thing for 'you' then go for it.............and well done I say ! It is just too much 'pay now gain later' for me, and particularly considering that the people that may help you through to success in the project (eg Bank, Enel, Govt), are taking (as I see it) ZERO risk? I look forward to congratulating you on this Forum in 10 years time ! (I might come for a loan !!!) Good Luck, S