In the last Transition Leicester newsletter I argued that right now could be the best time ever to invest in solar PV in Leicester, because of the unique combination of the new “feed-in tariffs” (FITs), Government grants and Leicester city council grants. I recently got hold of some figures on installation costs and grants from a friend who recently installed PV in Leicester, so below are some calculations to prove that now is the time to put solar PV on your house!
Here’s the info my friend sent to me:
The whole system cost £8,700. I got £2,500 from LCBP, and £2,250 from LCC for my 1.36kW solar system. The LCBP grant is a sliding scale depending on how big an intallation you put up, so a 1kW system won’t get you the full £2,500. The expected annual output is 1100kWh, but so far we have done 844kWh since 1/3/09.
The proposed feed-in tariff rate for domestic-scale installations is 36p for each unit of electricity generated. For a 1.36kW system as above generating 1100kWh a year, that would give you an income of £396 per year from FITs. You would also either save money on your electricity bill when you use electricity from your PV, or export any excess electricity to the grid. At current prices, that’d mean saving around 10p per unit for anything you use (though electricity prices are likely to go up in real terms in the future so your savings in the future are likely to be even higher), or exporting electricity to the grid – the Government is proposing guaranteeing at least 5p per unit for exports. That gives you at least another £55 a year (assuming you export all your electricity, or up to £110 per year (at current prices) if you use it all. If we’re conservative and assume you get just £55 per year, then together with the FIT income of £396, that’s a total annual income of at least £450 per year.
You can expect solar PV to have a lifetime of at least 20-25 years, and the Government have committed to pay out FITs for 20 years from the time of installation.
So, with the full installation cost of £8,700, this system would pay back in just over 19 years, giving you a profit of £300 over 20 years.
With the Low Carbon Buildings Programme (LCBP) grant (of £2500), that payback period becomes just less than 14 years, and you’d profit by £2800 over 20 years.
With the Leicester City Council grant as well (another £2250), the payback becomes just less than 9 years. and your profit becomes £5,050.
If you look at it as an investment, then with FITs and the LCBP grant, for an investment of £3,950 you’ll get a total return of £9,000 over 20 years – you can think of that as getting 4% a year interest on your initial outlay. That’s a pretty good investment in the current climate, and what’s more, this is a conservative estimate – the more fuel prices increase, the greater your savings will be.
So, what are you waiting for? You can find out about getting a grant for solar PV in Leicester by visiting the Groundwork website here: http://www.gwll.org.uk/SolarGrants
I’ve not been able to do the sums for solar thermal, but as you can get most of the installation costs covered through grants (this year in Leicester, at least), and the Government has announced a new Renewable Heat Incentive (that will work just like FITs), I suspect the financial case will be just as good. If you’ve got any figures to share, then please do post them below!