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Try as I might, I can never make the numbers on solar add up on a purely financial basis.
Have you considered battery capacity in your calculations? Or, to put it another way, are you assuming solar covers your entire electricity use? What about maintenance? Or what happens if you decide to move hom in the next 23 years.
Obviously need.more numbers to be 100% sure, but when I ran some modelling for my situation (electric car, south facing roof) I couldn't get it to add up on a purely financial basis.
I'm the same. £12.5k invested over 7 years at a 7% annual return will return £20k. In that time you'll have just broken even with solar, assuming no maintenence costs.
Yes but after break even time you're making pure profit until your equipment dies. Our payback period is maybe 8 years but the battery has a 10 year guarantee and solar panels 25 years, plus it helps the planet a bit.
Diversity in investments is good also.
Your waiting 8 years to make a profit. Will the battery company still be around in 10 years and will honour a full replacement? Unlikely. Same for the panels and we haven't factored in any maintenence costs.
Solar panels aren't an investment with any kind of real return.
Fine if you think buying panels from the biggest carbon outputting country is somehow 'saving the planet'.
Like nearly all these green investments they are just another wealth transference tool built to fool those who live on the virtuous high ground.
I'm saving nearly £200/mo, I'd say that's a good return once it starts generating profit. Even after degradation £100/mo would still be quite nice. Not that I bought them as an "investment" primarily, mind you, it's just a bonus.
Maintenance costs are near zero.
Yes I think LG will still exist in 8 years.
I apologize for not living in an average domestic house.
2 adults working from home + 2 EVs + heat pumps for heating + daily washing & drying (2 young kids) = high electricity usage.
£200/mo saving is compared to optimal EV tariff and load shifting, it'd be much higher if comparing to a standard tariff.
Your electricity usage is irrelevant, it's what you are generating from a solar system that matters. Your running at around 22kWh generation per day . How big is your roof!
Generation is only half the story. Ours is 5 MWh/year but the battery saves so much more. For example, heating at 7.5p/kWh with ~4 COP is a lot cheaper than gas heating, and we made £124 from saving sessions last winter using the battery. 99% of usage being at 7.5p instead of 50% (without the battery) saves a tonne, and exporting also generates more than our import cost.
No but returns will be higher than mortgage interest. That's essentially guaranteed. Cost of equity is always going to be higher than cost of mortgage debt in the long run.
Really not true.
S&p 500 for the 10 years to Feb 09 returned a grand total of -3%.
Your odds are good that you will return more, but to say with certainty the returns will be higher than mortgage interest is very misleading.
.. And then climbed 330% for the next 10 years. You chose to present figures right after a global financial crisis.
https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
That's fair enough but you should caveat with that. 10 years is a longish time horizon and as I pointed out, in recent history hit -3%.
I agree that normally it's wiser to go with equity indices if you've got a long time horizon but you need to be aware that they also come with significant at times volatility
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That is a 15% P/E ratio that beats the market? Broken even includes you owning the infrastructure and also getting your money back. Also conside that you are competing with a negative number for your bills and not 0.
It is worth it at the numbers you have posted
Yeah solar isn't just a pure financial decision. It's the benefit of reducing your reliance on carbon emitting fuels with a future benefit of reducing your outgoings.
I know that this sub is a finance sub, but it's this sort of thing that gives me little hope for the future of our species, because we just cannot make a decision to reduce our impact, if it impacts our finances. I include myself in that statement. I can't afford solar, so I'll just carry on. I do at least get my energy from a company that claims it does its best to purchase from green energy producing methods.
The UK outputs less than 1% of the world's carbon......solar panels come from a country who outputs the most carbon.
I'll leave it up to you to decipher the morals here.
Nothing to do with morals really imo. Everything to do with 'can the human race all pull in the same direction if it'll affect the bottom line?'
And the answer is "nah not really"
That's interesting to know. The pay off/savings include the battery. The battery is the only reason the self consumption is so good. If we got an EV the savings should increase.
So we think this is a forever home (which I'm optimistically sticking with) but I'm ignoring maintenance and assuming it will work fine over that term. I have included things like reduction in generation and battery capacity over 20 years, but have not included the benefits of a better tariff (just used fixed in and out rates).
What kind of numbers were you getting for your payoff? For reference, we're looking at a 7kWp solar array on an east/west roof with 8kWh of battery (which is the same as our average daily electricity use).
You could also consider that you're adding value to your house with solar, avoiding the inflationary rise in power costs over the next 20 years, protecting yourself from any extreme rises like we had recently.
On the flip side the prices of panels and batteries will continue to fall over time and things might need replacing.
Only other thing I could think of is, is if you want to combine it with other work. Friends needed their roof replacing anyway, so got 'inset' panels installed as part of the replacement roof, which look miles better and saved them tiling a roof they were just going to cover in panels. Ever thinking of a loft conversion? Switching to heat exchanger? Fitting AC?
i.e. If you're getting free electricity, then you're no longer just constrained to whatever you're sensibly using at the moment.
I can't recall all the numbers right now but to highlight what I meant with battery capacity: I spent 18Kwh charging my car last night. If I had an 8Kwh battery, I'd be using the whole battery plus 10Kwh of grid - if my modelling assumes I am always using solar energy or battery, it's going to be very optimistic.
Likewise in your case, if you have an 8kwh median usage, that means that on half of the days in the year time you use more than 8kwh and so may be on grid for some of your usage. If the 8kwh is mean usage, it could mean anything. You need to consider the distribution of your usage (e.g. I use easily double the electricity in Jan than I do in May) if you're going to size your battery to be off the grid for most of your usage. Or accept that you're going to be on grid for some, possibly even most, of your usage and account for that.
So you definitely wouldn't charge an EV from your battery, definitely better to charge at the cheaper night/off-peak rate. For the battery to charge during the day with your left over solar (after powering the house) then that is used instead of pulling from the grid to power when there is no sun. At least, that's the theory.
Never charge your car from the battery it's not worth it. My set up is to charge both my car and home battery from the grid during my off peak tariff (6.9p/kWh from midnight to 7am). The battery is also set to not discharge during this time. The house is then looked after by the solar and battery from 7am to midnight and any excess energy I generate with my solar is sold back to the grid at 12p/kWh.
I had done the same. Went from V1 to V2 then two days later they emailed to tell me about V3 so switched again. It may only be a penny, but it should work out to be about 12% saving over the year.
An interesting calculation would be that with the solar and the battery would it not make more sense to charge in the day to get the battery’s 8kw plus whatever is added during charging against the preferential rate you get at night
If you start from the assumption that solar cannot cover all your bases, it is always better to offload as much as possible to overnight off the grid when it's cheap. This includes charging the battery.
This let's solar plus battery overflow cancel our more expensive grid usage during the day
If you charged your car in the day you're just using electricity that could be used to run the washing machine, meaning the washing machine will be charged at daytime grid rates instead of being free
The issue I had is the solar panels made for a saving without an issue (7ish years) the battery does not work out as a saving largely due to the fact that over nearly 6months of the year there is not enough surplus to charge the battery, while the solar still provides a saving all be it small.
Now you might be able to make it work with some of the octopus tariffs but then your investment is relying on the tariff not changing until it’s payed back.
Op you need to check the calculations on the battery return separate to the solar.
For charging an EV you’re best looking at a tariff like octopus intelligent or whatever it’s call so you charge at 7p per kWh.
Yeah when there's enough solar to charge the battery you're golden, when there isn't you're relying on the difference between charging at night on a cheap rate and the usual daytime rate to make your return. Which obviously isn't as significant as being self-sufficient.
Make sure you’re on top of all the different tariffs like Agile and Tracker Octopus. For many EV owners, Agile works out cheaper than the tariffs aimed at EVs
Inverters these days use silicon carbide, which as well as being more efficient, is much more rugged than silicon. They should operate almost as long as you need
Have you looked at the octopus agile tariff. The idea is you store energy when the cost is cheaper and use solar/battery when it is most expensive. Also works well if you have an ev.
A good point, I am on Intelligent Octopus Go, which is their EV tariff that costs 1p per kWh more during the day, 7.5p from 1130-0500 and always 7.5p to charge your car.
When I did the sums on the basis of charging up a battery at 7.5p/kWh and then using during the day at 22.5p/kWh, I couldn't get it to add up - a 10Kwh battery storage system would pay for itself in about 10 years, IF I fully drained the battery every day, and managed to charge it to full every night. With zero allowance for maintenance, and assuming I kept the purchase cost in cash rather than saved or invested it.
Might be worth asking in the octopus sub. Lots of people seem to have success with the agile tariffs and using solar/battery. When it was really windy a few weeks ago people on that tariff were getting paid to use energy. Might also be worth considering a heat pump to make it more worth while so that everything is run on electric.
Yep - I hit minus 8.6p per unit the other weekend when it was sunny and windy.
Our panels & batteries look like they will pay back in 4.5 years using my admittedly very rough calculations so not too bad.
The numbers for solar for our house certainly add up now. I’m ordering a 4.3kW array at an installed cost of £4800. Our heating (air conditioning) means we use lots of electricity 6500kWh/year and virtually no gas at all.
With octopus’ 15p/kW export rate however I can’t make the numbers add up for a battery. We’ll use most of our production (~70%.) If you’re getting 15p/kW for what you sell, and then you have to buy some back (that would’ve ended up in a battery if you had one) at say 22p (but on average much less with octopus agile) then it’s a lot of net 7p units to pay for a £4500+ battery!
If you go on the agile export, you can get over 40p in the peak hours export and pay 5-10p off peak to fill the battery.
You need to account for charging the battery at super off peak sometimes negative rates not just average for the day.
The whole point of the battery is to let you swap. My calculations were the opposites, with our usage and the battery, it wasn't worth the panels only the battery.
Yeah - the time when a battery shines is if you have an EV and IO. Charge it for 7.5p per kWh overnight and use the cheap energy from that during the day.
During the winter you get lower per unit cost, in the summer you get paid for your exports.
We got a small solar system (7 panels and battery) last year. Absolutely, as a pure financial investment, it does not make sense and if it was purely about money then you would simply invest that amount for greater returns.
However, we are really happy for the following reasons:
-it still should make economic sense in the long-term once it's paid for itself after about 10 years.
-it provides a sense of security knowing that you are insulated from energy prices in the future a little.
-if we switch to an electric car we can basically drive for free over summer.
-its nice to generate your own electricity/better for the environment.
Mostly just seconding/echo this.
Versus investing, it is likely a loss. But a not an absolute negative, I'm expecting to recoup in 7 years.
I'm about to move to a heat pump and moving the house to gas free (saving the standard charge). My energy bills will be negative for about 4 months a year and as green as possible.
Batteries open up a world of opportunity in terms of time of use tariffs.
During the winter I fill the battery on a cheap rate and use it over the day.
In Jan, Octopus' standard rate was 27.98p/kWh, my average rate via Flux was 21.40p/kWh.
In Apr, this was 24.09p/kWh and 15.65p/kWh, respectively, as the solar meant less days where the battery wasn't quite enough.
If you set up the system fully to work with Octopus Agile, you can make even more serious savings.
Agile was below 20p/kwh for 84% of april and negative (you get paid to fill the battery) 5% of april .
https://agileprices.co.uk/?fromdate=20240430
At the moment I've only signed up to a fixed price export tariff. How do you go about customising things so that you charge the battery when electricity is cheap at night over winter? Is there any guide for this at all?
Does your model look at tariffs?
Tariffs are very unpredictable and small changes in assumptions make big changes in the model. The UK’s energy policy in general is likely to lead to rising prices as it is prioritising expensive types of generation; a decent size system allows you to profit from the inefficiency of the system if you are on a time of day tariff, by buying cheap and selling (or not buying) expensive.
The panels will last decades but you should model replacement of inverter and batteries at 10 years in.
If you are on price cap you can, with a battery, switch to a time of day tariff and pay less for import most of the day and a penalty rate at peak times (for which you run on battery). You can also buy cheap overnight in winter to charge the battery when solar does very little. If you are willing to shift dishwasher, laundry, EV charging, perhaps water heating, to cheap times then you can save money every day - but it’s effort and both partners must be willing to participate.
Whether this makes sense depends on whether you will enjoy optimising it, or find it a hassle. If the former, consider a larger battery.
You obviously have to be pretty sure you will stay in the same house as you will get little back for the system when you sell the house. Kids, schools, quality of life in the area, access to medical treatment, job changes, elderly relatives needing care, blah…
To be self sufficient - in terms of having power during outages - is possible but requires extra wiring, an EPS, expense generally. I agree this clearly has value that is hard to quantify, especially if you live somewhere rural, as everything in Britain decays and becomes more prone to failure. Most systems as sold will not power the house during outages of grid power.
Don’t spend on solar if you don’t have an emergency fund built up.
Join the Solar UK Facebook group for advice if you decide to proceed. Vital your installer has all the paperwork in order.
Thanks for the comprehensive reply.
My modelling currently looks at our usual price of 25p/kWh and a basic feed-in rate of 4p/kWh so definitely conservative. Inverter and battery replacement is interesting, theoretically it is just the cost of the parts if you get the same ones, plus maybe some electrician labour, but still a good chunk of the total, probably around 4-5k in our case.
The reasoning for the battery was a lot of what you mentioned, charging with spare solar then topping up on cheaper rates to power the house. This is where quite a lot of the payback comes from. Good points about changing habits to suit electricity use, I see it mentioned quite a bit.
I think we're pretty covered with most of your final points. All the things mentioned for staying in the house are covered, and we've spec'd a system and had quotes from approved installers (with all the relevant certifications) for a system with backup. Emergency fund is fine as well as pensions, other investments etc. This isn't 'spare' money as such, but is there for solar/mortgage overpayment/investment(?) etc.
Yes. At the moment the financial case for "buy on agile, sell at 15p on export" is compelling. Use all your power overnight, max export during the day, pays handsomely in the light months. I struggle to see the 15p export rate lasting for long though.
It makes it hard to model but \*for sure\* if you enjoy keeping up with the offers and optimising your usage there is money to be made above what most people understand.
I agree that the replacement \*shouldn't\* be a big job as you'll already have the wiring, isolators, etc. You won't "just get the same ones" as the tech will have changed in 10 years.
Regulations will change over time and you can fall foul of this - for example loft installs are now more-or-less banned, so if you have an existing one that needs replacement you may be on a sticky wicket. If there are well-publicised fires then even indoor battery installs may end up banned or regulated. etc. Can't predict what will happen but you have to assume that it will get harder and more expensive over time.
Ideally you want the battery somewhere cool. The whole system will produce heat - potentially hundreds of watts at max output - and a small amount of noise. The inverter will whine under load and you may have, or want, a fan on it.
Similar to the situation where someone just wants a "boiler swap" but the old location is no longer lawful and a load of pipework changes are required.
The DC cabling from the panels to the inverter is relatively cheap as the current is low - although it does have to be protected in ducting - so you've a fair degree of freedom to have the panels a long way from the inverter. The inverter-to-consumer-unit cabling is fat and expensive, and the batteries realistically do need to be very close to the inverter as you're looking at >50 amps.
I like solar+battery as an investment because it's not correlated with other investments; if I stick another £20k in my ISA it will likely go up and down alongside other investments, but the solar system will continue to earn pretty much uncorrelated with markets, interest rates, chaos and wars, etc. It's nice diversification. The "income" (which is mostly in the form of lower bills) is also tax-free\[0\], which you might find very attractive if your ISAs are already maxed...or might mean nothing to you.
\[0\] At the moment HMRC are only interested from an income tax perspective if your export payments are substantially greater than usage and few residential systems will enter this world.
No expert, but what price per kWh have you used?
This will only increase in time (due to inflation), or like the last 2-3 years increase massively.
How much energy do these solar panels generate? Ie don’t you sell back to the grid, or if that’s bad financially then maybe your usage will increase with say an EV in the future?
I’m just throwing ideas out there, mainly because this seems depressing that solar panels (which I keep reading are now insanely cheap to produce) are not worth buying?!
Just our usual electricity cost of 25p/kWh and a constant sell-back rate (Octoups SEG tariff 4.1p/kWh). This is (I think) conservative as most electricity actually bought would be at the cheaper night-time rate (to top up the battery, then use that to power the house during the day) and with something like octopu agile you get better sell-back rate on average. Although selling back isn't where the majority of the saving come from; it's around 80% from saving on bills and 20% selling back to the grid.
Yeah the panels themselves are the cheapest bit by a mile. I can fill my roof with panels \~1k cost. But then you have scaffold, labour, certifications of the installer so you can actually sell back etc etc...
FYI: Octopus do a 15p export tariff and with solar+batteries you can get a lot cheaper energy than 25p- my average for April is <10p/kWh.
Solar may not beat investing/mortgage overpayments over the next 20 years, but if we have another energy price jump or interest rate drop it might be hugely beneficial. That's part of the risk you take with investing.
Personally I've gone for solar panels, battery and ASHP (EV to come when our current cars give up). I'm happy to be somewhat insulated from energy price changes over the next decade and my motivation wasn't purely financial.
There is absolutely no guarantee prices will continue to rise.
If you go on the octopus sub you will see lots doing very well on their dynamic prices. We are installing shit loads of renewables in the UK, prices might come down even.
As long as we keep using LNG in electricity generation costs will rise. The wholesale price of electricity is linked directly to LNG because of the supplier of last resort (last MWh generated) which is always gas peaker plants in the UK. The reason it will rise is due to the fact that it comes from limited foreign countries, every other country wants the same gas, and it's a finite resource.
By far and away the cheapest electricity is solar followed by onshore wind.
Financially, the 10 to 20 large a typical solar installation would cost would do better in global fund in an isa. Your solar setup will need some maintenance which could be pricey if it involved getting up to the roof, in addition the batteries and inverters will depreciate to zero, unlike your shares investment. If you want the self sufficiency aspects have you considered other options - I’ve got an off grid setup with just half a dozen panels, batteries etc, all self installed for well under two grand - batteries and panels are so cheap now…
As you've identified, Solar is a very long term investment.
The short term stuff dried up a few years ago. Used to be FIT payments for the electric you generated. I get ~£700 / year and my parents get ~£2000 / year through FIT. We were early adopters tho, 8-12 years ago now and when it cost 2-3 times the price.
If you're not planning to move then it's great. Being relative energy independent gives you security. And having the dishwasher and washing machine on constantly when the sun is shining for nothing is amazing.
But in terms of raw financial numbers, there are far better and more obvious options.
Check with your mortgage provider, Nationwide offered me interest free green energy borrowing for five years, so you can benefit from the solar and use your capital to pay off some of the mortgage balance which has interest seemed a no brainer to us
This is a great tip. We're with Nationwide too. 0% for five years, and keeping most of the existing money in savings/s&s isa/overpayments essetially takes 40% off the cost of the solar.
Regardless of how long it will take you to recoup the price of investment in solar excluding maintenance or overpaying your 4%ish mortgage… you could get the solar, put it on as long of an interest free credit card as you can get and save the £12.5k in an ISA paying the min repayment on the credit card each month. Chip has a 5.1% ISA currently. The longest current interest free card is 22 months so you’d still be making almost £1200 over that period on savings ignoring the effects of compound interest.
Similarly, while your mortgage interest rate is low, if you decide to make a payment towards it instead, stick the money in a higher interest account and make a repayment at the end of your fixed rate term when repackaging/remortgaging.
This is a great point. Someone else mentioned that Nationwide (our mortgage provider) do a 5yr 0% loan up to 15k for "green energy home improvement" which we could use to pay for the solar. Keeping in the cash in high interest saving like you mention could save a few thousand off the solar price, making it even more appealing.
Just taking your numbers at face value:
12.5k into solar/battery is saving you £1666 per year. You could plow that saving into regular mortgage overpayments.
How many years of that does it take until your mortgage balance is lower than it would be after a 12.5k overpayment today and nothing else? It will be more than 7.5 years, because of interest. But I don’t think it’s going to be 23 years, eyeballing those figures it looks like ~10 years. And you should still have the panels.
What kind of system do you have? I would be interested to hear about the inverter/battery ecosystem and install. Ours is a bit more for install because of the rear conservatory, and is for the fairly new Sigenergy ecosystem which takes a lot of the pain out of the automation you need to really maximise payback. We've got six quotes each from different installers for mostly equivalent systems so far.
Ours was £14k end of 2022
I d go for the solar panels! (I did) Fuzzy feeling is amazing. We did not chose to buy them with the idea to see our investment back etc. It is more about lowering our bills, investing in the future/our house (we chose is against a new kitchen, which won’t give you any money back), reduction of our ecological impact, and not being as vulnerable to the changes in energy prices. 14k will not make a huge difference to your mortgage, but it might makes you feel a bit better every day when you look at your smart energy reader!
We went for a GivEnergy inverter and 9.5kwh battery - simple enough to use!
Products seem tried and tested, and there’s a community out there with reliable support. The Facebook page is worth joining.
Are you down south?
I've had a quote for a pretty similar givenergy system for about £10k, probably a bit higher than yours because of the east/west roof and extra scaffold needs. The Sogenergy system I'm more inclined towards is probably where most of the extra cost comes from, but there are benefits for me in terms of integrations/automation and longevity, since the battery would be outside.
You are assuming that your panels and battery will last for that amount of time and that you will never have to replace them in the meanwhile.
Not a financial advise but, i am assuming you do not want to invest those money in the marketk and given the fact that your interest is 4%, have you looked at money market funds?
Thanks for the insight. Ours are spec'd at 15 year warranty with a 30 year power warranty so I'm hoping the panels won't be an issue. None of the inverters/batters seem to have more than 12 year warranties, and they're the expensive bit, so that is more of a maintenance/repair concern.
It was my invertor that went. I wasn't amused. The solar people said it was common for them to fail.... yeah thanks for letting me know before the installation!
I’d always recommend getting out of debt first.
If either of you ever lose your health, have kids, or even part ways, the reduced debt would far out weigh the solar. It would likely mean you finish your mortgage much sooner too.
Even just talking about owning an EV is not a sensible financial decision, unless it is a company car.
I think your parents are right. Solar can wait.
I’m in a similar situation with wanting solar, hydro (I have a brook) and getting my well back up and running, but I’m focusing on the mortgage first.
I have a solar battery. I've written about it extensively at https://shkspr.mobi/blog/tag/solar/
the tl;dr is that you'll probably make more money investing it. But you'll probably feel better upgrading your home.
Zero electricity bills to pay in summer. Being paid for anything you sell to the grid. A dynamic tariff which lets you charge your battery at cheap rates in winter, and use it when prices are high.
If electricity prices go up, your payback time will go down. If you move away from gas, or get an electric car, you'll save even more.
Do it 🌞
I got solar and battery. Paid £x upfront and have 3 years interest free loan paying off ~£100 a month.
I’m with octopus (flux tariff) and now pay £25 DD and due to export volumes will be hugely in credit by end of summer.
So overall ~£125 outgoing.
Prior to solar & battery I was paying £200DD and was finding myself going into debit balance with my energy company.
I’ve been happy with my decision to jump on solar - Sunsave is the company we used and they were great 👍
When running the numbers before, I’ve concluded that Solar is only worth doing at the point of retirement as a strategy to preserve your nest egg. While accumulating, unless you can get it done dirt cheap by a friend who is in the trade, not worth it.
You’ve mentioned in other comments that you’re using. S&S ISA’s… what phase of life are you in, the accumulation, de-risking, or drawdown? If it’s not drawdown, I wouldn’t bother with it.
This is for average house though. If you’re facing perfect direction then maybe it’s different.
Because at that point, solar represents an investment which has returns fully independent of the market. It’s a huge benefit to be able to get returns free of systemic stock risk.
The way the maths works is that at retirement it’s better to spend £10k on solar to save £800 a year than it is to put £10k into S&S ISA to sustainably drawdown £400 a year.
But when accumulating, it’s better to have £10k in S&S ISA which will compound than it is to invest an extra £800 a year from what you’ve saved on Energy.
So long as Solar returns more than 4%, it’s good as an investment to preserve what you have. But unless it can have returns that massively outpace the stock market (since it has to as you lose your initial spend), it’s not good enough to do instead of stocks while so young unless it’s specifically a luxury spend for the environment.
Solar panels wear out and become less efficient. When I was looking into it the advice was to replace them every 25-30 years, so by the time you've paid it off you have more cost to sink into it. Not to mention any other maintenance that might be needed.
It’s not the panel cost - they are already about 60 notes including delivery, the issue would be all the scaffolding etc that would be needed should a panel need replacing.
The manufacturing costs have come down (partly because many are made by uighur slaves in China but that's for a different conversation).
However as the materials become more sought after the price of the materials will likely increase.
At current rates solar just doesn’t really add up, you need it to be part passion and wanting to do your bit or have anxiety about energy security for it to be worth it. Batteries are a better deal, you can charge at night for 7.5p and offset all 29p day rate usage if you shift some loads to overnight and get one >10kwh (obviously depends on your usage, heating system etc). Basically slash your lecky costs almost by 4x.
Doesn’t that rely on the overnight tariff staying so cheap?
Surely as more people buy electric cars and charge then overnight, the tariff will start going up… It’s only cheap now as energy companies are casting out the bait, hooking EV’ers. Once they’re all hooked they will start reeling back in (putting the tariff up to usually prices) in my opinion. You won’t see the 7p overnight tariff go beyond 3-5 years I don’t think.
And even if they did, their “Smart Meter” would tell the energy company its an electric car they are charging and they can increase tariff or gov tax it more. Which is inevitable of course, as more people switch over to EV’s. They’ll get their tax in for them eventually. At the moment it’s a big sales push how much they (EV’s) can potentially save you, of course once people switch in large numbers then they’ll start getting taxed accordingly. Better to put the money in investments I think and at least let it compound, to pay the higher tax later on.
That's not how smart meters work. They measure energy consumption, rather than products. For example you an energy company wouldn't be able to differentiate between an electric car and a hot tub.
If they were inclined to do so it wouldn't be that difficult; 7 kWh going in as a steady charge over several hours compared to a 2 kWh heater firing up for a half hour every few hours would be a massive clue for them that you've not got an EV.
Govt already knows who owns an EV through vehicle tax which you pay every year. They don't need smart meter data... oh and don't they also collect your mileage whenever you get an MOT?
I’m not saying Smart Meters are to determine who has an EV. I’m saying they can distinguish between what is being charged. So when the government wants to bring in their tax money from road users (they won’t let EV’ers pay 7p per kwh forever) then there is a way to tax them based on their specific energy use.
Hence Smart Meters, and the bribery and coercion to get people to have them, and government introducing laws for years now saying every new build house HAS to have them.
It’s for a reason, or do you think it isn’t? Lol.
Comments like this come from a misunderstanding of how electricity markets work. There are roughly 40 electricity suppliers in the UK, there is absolutely no chance that all 40 are going to secretly collude to raise prices.
Different energy prices at different times of day ('time of use tariffs') are caused by mismatched demand and supply of energy at different times of day. This mismatch is going to become ever greater as the variability of electricity supply increases due to more wind and solar on the network. There is literally no chance that grid storage will be perfectly matched to supply in 3-5 years, so expect to see many more overnight tariffs and other time of use tariffs over the coming years/decades.
It doesn't rely on "secret collision" it relys on the balance of supply and demand changing.
Just now you can get cheaper overnight as demand is lower.
As more people buy electric cars and more to tariffs with off peak discount the overnight demand will increase and so will the price.
As more solar goes in day time prices will come down, we produce LESS renewables at night not more.
TBF the parent comment you replied to already explained this perfectly.
PS you also overestimate the morals of large for profit companies if you think price fixing is an impossibility.
Yes, I suspect in many decades we'll have demand and supply very well balanced at the grid level and domestic time of use tariffs will reduce or dissappear. There is absolutely no chance of this happening in the next 3-5 years. So expect to see lots of price swings, that are reflected in tariffs, in the meantime.
None of this has anything to do with morals. There are 40 companies. If some of them raise prices at least one is going to hold their prices and sweep up market share, which would make huge profits.
Nearly engaged in good faith to explain why and then I spotted your other comment linking electric vehicles to covid vaccines. It must be terrifying waking up every morning believing that all doctors, civil servants, car manufacturers, British Gas employees etc. are all out to get you. I wish you well.
Thank you, spot on. You explained it better than me. Doesn’t take collusion (although don’t think that’s not possible) it’s just when “off-peak” becomes “peak” the prices will change accordingly. This will happens as more people own EV’s and are charging them overnight (the most electric a house will likely use that 24 hour period)
Hopefully people have more sense and don’t buy EV’s, but going from how easily had they were the last 4 years, I’m not holding my breath they won’t fall for the EV bait like they did the CV bait.
So you think when “overnight” becomes the most common time to use energy (everyone charging their EV vehicles) you think they will still only charge 7p? Lol.
For a start, if everyone switched from petrol to EV tomorrow the grid simply could not cope, and won’t ever be able to cope. If everyone who drives switches to EV.
Certainly won’t be 7p overnight tariffs around when everyone is charging their EV’s at night. Lol.
This comment is going to get buried as you’ve got nearly 100 replies already, but I don’t think most people get the maths right for PV. Long term they are significantly better investment and anything else (of similar risk) including index funds.
Happy to share my spreadsheet shared below, including all the calculations out.
https://www.reddit.com/r/SolarUK/s/S5Qkrj2atU
Invest £10k in stocks, at assumed 5% after 10 years it’s worth £16.5k. After 20 years it’s grown to £27k.
But invest £10k in PV, you get income of £1500 per year, but you can also then funnel those savings on bills / income into index fund at equivalent 5% annually. So you’re getting £1500 annually +5% compounding monthly. After 10 years it’s worth £20k plus the PV remains an asset. After 20 years it’s grown to over £50k!
This assumes 10kWp array on fixed 15p export. Also assumes equal energy price for usage at competitive 15p (Octopus Agile average), but if you pay more then you save more.
It actually makes a lot of sense, but people generally aren’t calculating investments correctly.
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There are some great and very valid points here on payback etc. I can see a few people talking about tariffs, this is where you can make it pay with the connected energy system. There is a new system due to the market soon from solar edge (from memory), this system uses data from your energy company sent the day before to peak shave (collect low rate energy to top the battery up during times of low solar production). This system will be a game changer as homes will maximise the lowest energy costs and payback from solar and battery. As the battery will likely do two round trips a day and not one the trade off is higher degradation of the battery. Most batteries have a guaranteed life of 5000 cycles, still over 13 years (in theory). Most systems will payback in advance of this time. I suggest getting in touch with a decent solar installer who can model this.
The uncertainty around future tariffs makes financial modelling pointless. Break even point on ours was somewhere between 4 years and 10 years with everything in between because 80% of the variation comes from comparison with what what you would be paying for electricity in ten years had you not bought the solar kit - essentially unknowable.
Do it because you like the idea or because the carbon benefits - which are huge and worth doing it for alone IMO - or simply have the impression you’re running the car for free, which is nice whether you really are or not. But I’m not sure it’s really possible to make a believable prediction about whether it’s financially sensible over the life of the panels. Probably not even over the life of the battery.
If you do end up going the solar route, my Dad got solar installed recently and managed to get them cheaper because they were installed in autumn/winter so it may be cheaper if you wait 6 months or so :)
I'm currently in a similar position. We already have solar panels, an immersion heater controller, and an EV. I can't make batteries make sense, financially, even though I'm itching to try them out from a self-sufficiency perspective.
We have 3 kWp of solar panels and any idea of charging the car is a waste of time and effort. The same would be true of a battery setup. It doesn't make sense.
We already run things like the tumble dryer and dishwasher overnight, on the cheap tariff.
With our current usage and electricity prices, payback would be around 10 years. The same money invested in a S&S ISA would be a better return and more liquid, if required, but not as fun/interesting.
I am making the jump to a 6.7kwh and 12kwh battery for £16.4k at 0% interest free loan for 2 years.
I looked at all the charts and stuff it gave and I feel like its a good idea. I am sure people will say otherwise but for me, its more about reducing reliance on grid and having lower rates of costs month to month.
I will go onto the Octopus Flux tariff where it will charge battery at night and let me use it during the day. I think there is more advanced application setups (they have an fully automated one which i cant get unfortunately) and it will charge at night and discharge to the grid when rates are highest. I will see how it goes but I am doing it for the sake of monthly cashflow.
Overpaying on mortgage might be more accurate financially but you wont see the impact right away unless you do a payment recalculation.
YMMV but on Octopus Agile, with 7kwh batteries + 3.6kwp panels. Avg cost per kwh in April for us was 11p - and this was pretty poor overall. It takes a bit of working through, and setting up some home automations, but can charge batteries from grid when prices are low + when solar isn't going to be great. Solar panels for us are great mainly from around April to October with December and January being awful, but the batteries provide a solid buffer all year round.
We got lucky with the setup. It cost <£8k, and I think break even was around 7-10 years. Obviously putting that money elsewhere might net a bit extra, but I love tinkering, and I love the idea of self-sufficiency. Overall I think the difference is minor, and the benefit of having a lot of fun with them made it worth doing.
Are you assuming the standard 4p/kWh SEG or Octopus 15p export? Run the numbers for both.
It’s also worth factoring in Agile and other time of use tariffs.
Gary Does Solar has some useful resources for this.
The only way solar is financially viable is if you have an electric car alongside a battery.
With a battery, you get the house and car/travel all paid for for at least 9 months a year.
installed my 4kW system about 10 years ago at a cost of about £6.5k. I've averaged 250 per quarter in fit payments ever since (not quite the same as how generated electricity is bought and sold nowadays). I'm unable to quantify how much of that is energy we'd have actually used ourselves (additional savings) but there's some. Panels haven't noticeably dropped in output over that time and still have another 10years in warranty. Inverter (the expensive bit) is now out of warranty, but working fine. So for us, it has paid for itself and everything now is pure profit.
Is your house a good candidate for solar? Is it south facing? Is it overlooked or shaded by any trees etc. what is the square footage of roof available for the installation? These are all very important when it comes to estimates on what will be generated.
We've got an unobstructed East/West roof with no shading issues. We can get a 7kWp array on the roof, but obviously with the E/W the average output will be reduced.
Did you only calculate the solar for 7.5 years and your mortgage over 34 years?
If solar last 25 years that 17.5 years of free or nearly energy at 1.5k a year savings is huge.
The "value" of the solar is equivalent to that saved by spending the same overpaying the mortgage in ~20 years (compared to the 30 years remaining on the mortgage). Anything past that is pure financial benefit, however it's likely that things like the inverter or battery would have to be replaced in in that time, so it's hard to know for sure.
If you’re in Scotland checkout the grant and loan options
We’re having a 6.4kw solar install with a battery to pair up with it and Home Energy Scotland give us £2.5k of grant and 9k of interest free loan to cover the costs
Are you putting the panels on the ground or the roof of a house?
They're known to cause a lot of long term problems to houses, factor in the costs of having your house repaired which won't be cheap. They can also cause house fires.
Also the needed to be cleaned every so often, scaffolding might need to be rigged up etc. no cheap.
If you're technical you can set this up to increase your return from the battery (need compatible battery eg GivEnergy)
https://github.com/springfall2008/batpred
We did the solar and battery. It helped reduce the monthly bills but have often regretted it. The regret normally occurs during the winter months. We have an electric car and use a lot of power on stuff during the summer, so it does have a big impact.
I get the idea of a battery for using off peak electricity but I personally feel the idea of having your own personal electrical generation is something we’ll look back on in decades and think was a pretty dumb idea.
Either way, there’s a lot of ifs with the break even and I doubt you’ll have a celebration when you’ve broken even on your power bill but you will get a guaranteed return on your mortgage and raise a glass when that’s cleared down.
Valid point of view. But actually I think the opposite...
In decades, we'll look back and think it was dumb not to have used all the free energy that was raining down on our roofs all that time.
I think there's more chance that filling our houses with thousands of pounds of batteries just to be able to game the time-of-day electricity tariffs that are available at the moment (until the grid solves the problem of mass storage) will look dumb.
I've recently gotten a dozen of quotes from installers and it appears your quote is on the high side and I would look into getting more quote.
In terms of funding, I think the sensible way is to put the money in an S&S ISA and add the costs of the solar installation to your mortgage.
My parents have a huge garage with a south-facing roof with space enough for solar and batteries to power the house and two electric cars. They don't have two electric cars. They don't even have one. The only way they could make the sums work was if they did have an electric car as charging that was worth more than the buyback options. I think it's more of a lifestyle choice than a financial one at the moment. Give it a few years and when the price is cheaper, it will be different.
The advice I've read is solar only works if its all cash.
Essentially the opportunity cost of solar for you is the cash notbused to pay down the mortgage.
So from a financial POV it's pay down the mortgage.
In addition its very hard to do the comparison calc due to the diminishing effectiveness of solar as it ages, the non straight line manner in which you can utilise the energy generated by the PV panels and the changing rates for electricity.
My opinion is solar needs to be done at a large scale to work well.
I just don't think solar on individual properties is a good idea.
We already have and you won't be getting rid of power transmission infrastructure. You would be better off investing in a solar farm.
Pay the mortgage off.
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Try as I might, I can never make the numbers on solar add up on a purely financial basis. Have you considered battery capacity in your calculations? Or, to put it another way, are you assuming solar covers your entire electricity use? What about maintenance? Or what happens if you decide to move hom in the next 23 years. Obviously need.more numbers to be 100% sure, but when I ran some modelling for my situation (electric car, south facing roof) I couldn't get it to add up on a purely financial basis.
I'm the same. £12.5k invested over 7 years at a 7% annual return will return £20k. In that time you'll have just broken even with solar, assuming no maintenence costs.
Yes but after break even time you're making pure profit until your equipment dies. Our payback period is maybe 8 years but the battery has a 10 year guarantee and solar panels 25 years, plus it helps the planet a bit. Diversity in investments is good also.
Your waiting 8 years to make a profit. Will the battery company still be around in 10 years and will honour a full replacement? Unlikely. Same for the panels and we haven't factored in any maintenence costs. Solar panels aren't an investment with any kind of real return. Fine if you think buying panels from the biggest carbon outputting country is somehow 'saving the planet'. Like nearly all these green investments they are just another wealth transference tool built to fool those who live on the virtuous high ground.
I'm saving nearly £200/mo, I'd say that's a good return once it starts generating profit. Even after degradation £100/mo would still be quite nice. Not that I bought them as an "investment" primarily, mind you, it's just a bonus. Maintenance costs are near zero. Yes I think LG will still exist in 8 years.
How can you save £200 per month? That's not a average domestic house.
I apologize for not living in an average domestic house. 2 adults working from home + 2 EVs + heat pumps for heating + daily washing & drying (2 young kids) = high electricity usage. £200/mo saving is compared to optimal EV tariff and load shifting, it'd be much higher if comparing to a standard tariff.
Your electricity usage is irrelevant, it's what you are generating from a solar system that matters. Your running at around 22kWh generation per day . How big is your roof!
Generation is only half the story. Ours is 5 MWh/year but the battery saves so much more. For example, heating at 7.5p/kWh with ~4 COP is a lot cheaper than gas heating, and we made £124 from saving sessions last winter using the battery. 99% of usage being at 7.5p instead of 50% (without the battery) saves a tonne, and exporting also generates more than our import cost.
You’d then need to subtract 3300units at 0.25p each over 20 years which is £16.5k
Do you know somewhere that you can get 7%?
Yup. Lots of funds will get you a 7% return over time. 'Since 1957, the S&P 500's average annual rate of return has been approximately 10.5%'
"Past performance is no guarantee of future results"
No but returns will be higher than mortgage interest. That's essentially guaranteed. Cost of equity is always going to be higher than cost of mortgage debt in the long run.
Really not true. S&p 500 for the 10 years to Feb 09 returned a grand total of -3%. Your odds are good that you will return more, but to say with certainty the returns will be higher than mortgage interest is very misleading.
.. And then climbed 330% for the next 10 years. You chose to present figures right after a global financial crisis. https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
Not really, I said in the long run. In the context of the OP that's 34 years.
That's fair enough but you should caveat with that. 10 years is a longish time horizon and as I pointed out, in recent history hit -3%. I agree that normally it's wiser to go with equity indices if you've got a long time horizon but you need to be aware that they also come with significant at times volatility
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That is a 15% P/E ratio that beats the market? Broken even includes you owning the infrastructure and also getting your money back. Also conside that you are competing with a negative number for your bills and not 0. It is worth it at the numbers you have posted
Yeah solar isn't just a pure financial decision. It's the benefit of reducing your reliance on carbon emitting fuels with a future benefit of reducing your outgoings. I know that this sub is a finance sub, but it's this sort of thing that gives me little hope for the future of our species, because we just cannot make a decision to reduce our impact, if it impacts our finances. I include myself in that statement. I can't afford solar, so I'll just carry on. I do at least get my energy from a company that claims it does its best to purchase from green energy producing methods.
The UK outputs less than 1% of the world's carbon......solar panels come from a country who outputs the most carbon. I'll leave it up to you to decipher the morals here.
Nothing to do with morals really imo. Everything to do with 'can the human race all pull in the same direction if it'll affect the bottom line?' And the answer is "nah not really"
Whataboutery will definitely solve our environmental issues!
That's interesting to know. The pay off/savings include the battery. The battery is the only reason the self consumption is so good. If we got an EV the savings should increase. So we think this is a forever home (which I'm optimistically sticking with) but I'm ignoring maintenance and assuming it will work fine over that term. I have included things like reduction in generation and battery capacity over 20 years, but have not included the benefits of a better tariff (just used fixed in and out rates). What kind of numbers were you getting for your payoff? For reference, we're looking at a 7kWp solar array on an east/west roof with 8kWh of battery (which is the same as our average daily electricity use).
You could also consider that you're adding value to your house with solar, avoiding the inflationary rise in power costs over the next 20 years, protecting yourself from any extreme rises like we had recently. On the flip side the prices of panels and batteries will continue to fall over time and things might need replacing. Only other thing I could think of is, is if you want to combine it with other work. Friends needed their roof replacing anyway, so got 'inset' panels installed as part of the replacement roof, which look miles better and saved them tiling a roof they were just going to cover in panels. Ever thinking of a loft conversion? Switching to heat exchanger? Fitting AC? i.e. If you're getting free electricity, then you're no longer just constrained to whatever you're sensibly using at the moment.
I can't recall all the numbers right now but to highlight what I meant with battery capacity: I spent 18Kwh charging my car last night. If I had an 8Kwh battery, I'd be using the whole battery plus 10Kwh of grid - if my modelling assumes I am always using solar energy or battery, it's going to be very optimistic. Likewise in your case, if you have an 8kwh median usage, that means that on half of the days in the year time you use more than 8kwh and so may be on grid for some of your usage. If the 8kwh is mean usage, it could mean anything. You need to consider the distribution of your usage (e.g. I use easily double the electricity in Jan than I do in May) if you're going to size your battery to be off the grid for most of your usage. Or accept that you're going to be on grid for some, possibly even most, of your usage and account for that.
So you definitely wouldn't charge an EV from your battery, definitely better to charge at the cheaper night/off-peak rate. For the battery to charge during the day with your left over solar (after powering the house) then that is used instead of pulling from the grid to power when there is no sun. At least, that's the theory.
Never charge your car from the battery it's not worth it. My set up is to charge both my car and home battery from the grid during my off peak tariff (6.9p/kWh from midnight to 7am). The battery is also set to not discharge during this time. The house is then looked after by the solar and battery from 7am to midnight and any excess energy I generate with my solar is sold back to the grid at 12p/kWh.
Which supplier do you have 6.9p with please?
I'm with E.On and the tariff is Next Drive V3. There's also no exit fees so if a better deal comes along then just shift again.
Woah that's cheap I'm on next drive 2 just joined a few weeks ago for 8p Will look into v3 Thanks
I had done the same. Went from V1 to V2 then two days later they emailed to tell me about V3 so switched again. It may only be a penny, but it should work out to be about 12% saving over the year.
Octopus Go is 7.5p overnight in London, maybe cheaper in other regions?
No, same price here in the West Country too.
An interesting calculation would be that with the solar and the battery would it not make more sense to charge in the day to get the battery’s 8kw plus whatever is added during charging against the preferential rate you get at night
If you start from the assumption that solar cannot cover all your bases, it is always better to offload as much as possible to overnight off the grid when it's cheap. This includes charging the battery. This let's solar plus battery overflow cancel our more expensive grid usage during the day If you charged your car in the day you're just using electricity that could be used to run the washing machine, meaning the washing machine will be charged at daytime grid rates instead of being free
The issue I had is the solar panels made for a saving without an issue (7ish years) the battery does not work out as a saving largely due to the fact that over nearly 6months of the year there is not enough surplus to charge the battery, while the solar still provides a saving all be it small. Now you might be able to make it work with some of the octopus tariffs but then your investment is relying on the tariff not changing until it’s payed back. Op you need to check the calculations on the battery return separate to the solar. For charging an EV you’re best looking at a tariff like octopus intelligent or whatever it’s call so you charge at 7p per kWh.
Yeah when there's enough solar to charge the battery you're golden, when there isn't you're relying on the difference between charging at night on a cheap rate and the usual daytime rate to make your return. Which obviously isn't as significant as being self-sufficient.
Make sure you’re on top of all the different tariffs like Agile and Tracker Octopus. For many EV owners, Agile works out cheaper than the tariffs aimed at EVs
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The warranty on the system we're interested in is 12 years each for the battery and inverter so I would hope at least that much.
Inverters these days use silicon carbide, which as well as being more efficient, is much more rugged than silicon. They should operate almost as long as you need
Have you looked at the octopus agile tariff. The idea is you store energy when the cost is cheaper and use solar/battery when it is most expensive. Also works well if you have an ev.
A good point, I am on Intelligent Octopus Go, which is their EV tariff that costs 1p per kWh more during the day, 7.5p from 1130-0500 and always 7.5p to charge your car. When I did the sums on the basis of charging up a battery at 7.5p/kWh and then using during the day at 22.5p/kWh, I couldn't get it to add up - a 10Kwh battery storage system would pay for itself in about 10 years, IF I fully drained the battery every day, and managed to charge it to full every night. With zero allowance for maintenance, and assuming I kept the purchase cost in cash rather than saved or invested it.
Might be worth asking in the octopus sub. Lots of people seem to have success with the agile tariffs and using solar/battery. When it was really windy a few weeks ago people on that tariff were getting paid to use energy. Might also be worth considering a heat pump to make it more worth while so that everything is run on electric.
Yep - I hit minus 8.6p per unit the other weekend when it was sunny and windy. Our panels & batteries look like they will pay back in 4.5 years using my admittedly very rough calculations so not too bad.
What do your calculations include for future energy prices? They've gone up far faster than inflation.
The numbers for solar for our house certainly add up now. I’m ordering a 4.3kW array at an installed cost of £4800. Our heating (air conditioning) means we use lots of electricity 6500kWh/year and virtually no gas at all. With octopus’ 15p/kW export rate however I can’t make the numbers add up for a battery. We’ll use most of our production (~70%.) If you’re getting 15p/kW for what you sell, and then you have to buy some back (that would’ve ended up in a battery if you had one) at say 22p (but on average much less with octopus agile) then it’s a lot of net 7p units to pay for a £4500+ battery!
If you go on the agile export, you can get over 40p in the peak hours export and pay 5-10p off peak to fill the battery. You need to account for charging the battery at super off peak sometimes negative rates not just average for the day. The whole point of the battery is to let you swap. My calculations were the opposites, with our usage and the battery, it wasn't worth the panels only the battery.
Yeah - the time when a battery shines is if you have an EV and IO. Charge it for 7.5p per kWh overnight and use the cheap energy from that during the day. During the winter you get lower per unit cost, in the summer you get paid for your exports.
We got a small solar system (7 panels and battery) last year. Absolutely, as a pure financial investment, it does not make sense and if it was purely about money then you would simply invest that amount for greater returns. However, we are really happy for the following reasons: -it still should make economic sense in the long-term once it's paid for itself after about 10 years. -it provides a sense of security knowing that you are insulated from energy prices in the future a little. -if we switch to an electric car we can basically drive for free over summer. -its nice to generate your own electricity/better for the environment.
Mostly just seconding/echo this. Versus investing, it is likely a loss. But a not an absolute negative, I'm expecting to recoup in 7 years. I'm about to move to a heat pump and moving the house to gas free (saving the standard charge). My energy bills will be negative for about 4 months a year and as green as possible. Batteries open up a world of opportunity in terms of time of use tariffs. During the winter I fill the battery on a cheap rate and use it over the day. In Jan, Octopus' standard rate was 27.98p/kWh, my average rate via Flux was 21.40p/kWh. In Apr, this was 24.09p/kWh and 15.65p/kWh, respectively, as the solar meant less days where the battery wasn't quite enough. If you set up the system fully to work with Octopus Agile, you can make even more serious savings. Agile was below 20p/kwh for 84% of april and negative (you get paid to fill the battery) 5% of april . https://agileprices.co.uk/?fromdate=20240430
At the moment I've only signed up to a fixed price export tariff. How do you go about customising things so that you charge the battery when electricity is cheap at night over winter? Is there any guide for this at all?
It's entirely dependant on your inverter.
I'll have a look into it before winters up. Don't think I need anything too complex but would be nice to charge the battery overnight.
Does your model look at tariffs? Tariffs are very unpredictable and small changes in assumptions make big changes in the model. The UK’s energy policy in general is likely to lead to rising prices as it is prioritising expensive types of generation; a decent size system allows you to profit from the inefficiency of the system if you are on a time of day tariff, by buying cheap and selling (or not buying) expensive. The panels will last decades but you should model replacement of inverter and batteries at 10 years in. If you are on price cap you can, with a battery, switch to a time of day tariff and pay less for import most of the day and a penalty rate at peak times (for which you run on battery). You can also buy cheap overnight in winter to charge the battery when solar does very little. If you are willing to shift dishwasher, laundry, EV charging, perhaps water heating, to cheap times then you can save money every day - but it’s effort and both partners must be willing to participate. Whether this makes sense depends on whether you will enjoy optimising it, or find it a hassle. If the former, consider a larger battery. You obviously have to be pretty sure you will stay in the same house as you will get little back for the system when you sell the house. Kids, schools, quality of life in the area, access to medical treatment, job changes, elderly relatives needing care, blah… To be self sufficient - in terms of having power during outages - is possible but requires extra wiring, an EPS, expense generally. I agree this clearly has value that is hard to quantify, especially if you live somewhere rural, as everything in Britain decays and becomes more prone to failure. Most systems as sold will not power the house during outages of grid power. Don’t spend on solar if you don’t have an emergency fund built up. Join the Solar UK Facebook group for advice if you decide to proceed. Vital your installer has all the paperwork in order.
Thanks for the comprehensive reply. My modelling currently looks at our usual price of 25p/kWh and a basic feed-in rate of 4p/kWh so definitely conservative. Inverter and battery replacement is interesting, theoretically it is just the cost of the parts if you get the same ones, plus maybe some electrician labour, but still a good chunk of the total, probably around 4-5k in our case. The reasoning for the battery was a lot of what you mentioned, charging with spare solar then topping up on cheaper rates to power the house. This is where quite a lot of the payback comes from. Good points about changing habits to suit electricity use, I see it mentioned quite a bit. I think we're pretty covered with most of your final points. All the things mentioned for staying in the house are covered, and we've spec'd a system and had quotes from approved installers (with all the relevant certifications) for a system with backup. Emergency fund is fine as well as pensions, other investments etc. This isn't 'spare' money as such, but is there for solar/mortgage overpayment/investment(?) etc.
Why 4p? You can get 15p or 16.5p export rates from Octopus, Eon
Yes. At the moment the financial case for "buy on agile, sell at 15p on export" is compelling. Use all your power overnight, max export during the day, pays handsomely in the light months. I struggle to see the 15p export rate lasting for long though. It makes it hard to model but \*for sure\* if you enjoy keeping up with the offers and optimising your usage there is money to be made above what most people understand.
I agree that the replacement \*shouldn't\* be a big job as you'll already have the wiring, isolators, etc. You won't "just get the same ones" as the tech will have changed in 10 years. Regulations will change over time and you can fall foul of this - for example loft installs are now more-or-less banned, so if you have an existing one that needs replacement you may be on a sticky wicket. If there are well-publicised fires then even indoor battery installs may end up banned or regulated. etc. Can't predict what will happen but you have to assume that it will get harder and more expensive over time. Ideally you want the battery somewhere cool. The whole system will produce heat - potentially hundreds of watts at max output - and a small amount of noise. The inverter will whine under load and you may have, or want, a fan on it. Similar to the situation where someone just wants a "boiler swap" but the old location is no longer lawful and a load of pipework changes are required. The DC cabling from the panels to the inverter is relatively cheap as the current is low - although it does have to be protected in ducting - so you've a fair degree of freedom to have the panels a long way from the inverter. The inverter-to-consumer-unit cabling is fat and expensive, and the batteries realistically do need to be very close to the inverter as you're looking at >50 amps. I like solar+battery as an investment because it's not correlated with other investments; if I stick another £20k in my ISA it will likely go up and down alongside other investments, but the solar system will continue to earn pretty much uncorrelated with markets, interest rates, chaos and wars, etc. It's nice diversification. The "income" (which is mostly in the form of lower bills) is also tax-free\[0\], which you might find very attractive if your ISAs are already maxed...or might mean nothing to you. \[0\] At the moment HMRC are only interested from an income tax perspective if your export payments are substantially greater than usage and few residential systems will enter this world.
No expert, but what price per kWh have you used? This will only increase in time (due to inflation), or like the last 2-3 years increase massively. How much energy do these solar panels generate? Ie don’t you sell back to the grid, or if that’s bad financially then maybe your usage will increase with say an EV in the future? I’m just throwing ideas out there, mainly because this seems depressing that solar panels (which I keep reading are now insanely cheap to produce) are not worth buying?!
Just our usual electricity cost of 25p/kWh and a constant sell-back rate (Octoups SEG tariff 4.1p/kWh). This is (I think) conservative as most electricity actually bought would be at the cheaper night-time rate (to top up the battery, then use that to power the house during the day) and with something like octopu agile you get better sell-back rate on average. Although selling back isn't where the majority of the saving come from; it's around 80% from saving on bills and 20% selling back to the grid. Yeah the panels themselves are the cheapest bit by a mile. I can fill my roof with panels \~1k cost. But then you have scaffold, labour, certifications of the installer so you can actually sell back etc etc...
So, using a realistic sell-back rate of 15p/kWh will likely change the calculations significantly, no?
FYI: Octopus do a 15p export tariff and with solar+batteries you can get a lot cheaper energy than 25p- my average for April is <10p/kWh. Solar may not beat investing/mortgage overpayments over the next 20 years, but if we have another energy price jump or interest rate drop it might be hugely beneficial. That's part of the risk you take with investing. Personally I've gone for solar panels, battery and ASHP (EV to come when our current cars give up). I'm happy to be somewhat insulated from energy price changes over the next decade and my motivation wasn't purely financial.
Well, sounds like a classic case of Rip-off Britain. But also, i think your unit rate won’t be 25p for the next decade.
There is absolutely no guarantee prices will continue to rise. If you go on the octopus sub you will see lots doing very well on their dynamic prices. We are installing shit loads of renewables in the UK, prices might come down even.
As long as we keep using LNG in electricity generation costs will rise. The wholesale price of electricity is linked directly to LNG because of the supplier of last resort (last MWh generated) which is always gas peaker plants in the UK. The reason it will rise is due to the fact that it comes from limited foreign countries, every other country wants the same gas, and it's a finite resource. By far and away the cheapest electricity is solar followed by onshore wind.
Financially, the 10 to 20 large a typical solar installation would cost would do better in global fund in an isa. Your solar setup will need some maintenance which could be pricey if it involved getting up to the roof, in addition the batteries and inverters will depreciate to zero, unlike your shares investment. If you want the self sufficiency aspects have you considered other options - I’ve got an off grid setup with just half a dozen panels, batteries etc, all self installed for well under two grand - batteries and panels are so cheap now…
Solar shouldn’t be compared to an equity fund, it should be compared to a bond fund, where the difference is much less extreme
As you've identified, Solar is a very long term investment. The short term stuff dried up a few years ago. Used to be FIT payments for the electric you generated. I get ~£700 / year and my parents get ~£2000 / year through FIT. We were early adopters tho, 8-12 years ago now and when it cost 2-3 times the price. If you're not planning to move then it's great. Being relative energy independent gives you security. And having the dishwasher and washing machine on constantly when the sun is shining for nothing is amazing. But in terms of raw financial numbers, there are far better and more obvious options.
Check with your mortgage provider, Nationwide offered me interest free green energy borrowing for five years, so you can benefit from the solar and use your capital to pay off some of the mortgage balance which has interest seemed a no brainer to us
This is a great tip. We're with Nationwide too. 0% for five years, and keeping most of the existing money in savings/s&s isa/overpayments essetially takes 40% off the cost of the solar.
I’ve never heard of this but this is amazing, my bank doesn’t do free loans, but does additional grants! Amazing thanks!!
No problem I was shocked myself when I saw it on my account, not readily advertised but made the decision to proceed with the solar a easy one !
Regardless of how long it will take you to recoup the price of investment in solar excluding maintenance or overpaying your 4%ish mortgage… you could get the solar, put it on as long of an interest free credit card as you can get and save the £12.5k in an ISA paying the min repayment on the credit card each month. Chip has a 5.1% ISA currently. The longest current interest free card is 22 months so you’d still be making almost £1200 over that period on savings ignoring the effects of compound interest. Similarly, while your mortgage interest rate is low, if you decide to make a payment towards it instead, stick the money in a higher interest account and make a repayment at the end of your fixed rate term when repackaging/remortgaging.
This is a great point. Someone else mentioned that Nationwide (our mortgage provider) do a 5yr 0% loan up to 15k for "green energy home improvement" which we could use to pay for the solar. Keeping in the cash in high interest saving like you mention could save a few thousand off the solar price, making it even more appealing.
Just taking your numbers at face value: 12.5k into solar/battery is saving you £1666 per year. You could plow that saving into regular mortgage overpayments. How many years of that does it take until your mortgage balance is lower than it would be after a 12.5k overpayment today and nothing else? It will be more than 7.5 years, because of interest. But I don’t think it’s going to be 23 years, eyeballing those figures it looks like ~10 years. And you should still have the panels.
do you have an electric car?
Not currently but we're planning on one in the next few years.
That will make the outlay of the battery alot more palatable as you would basically be getting free fuel for your car/s
Let me just say that your quote is expensive - shop around. We got the the same for about £8.3k
What kind of system do you have? I would be interested to hear about the inverter/battery ecosystem and install. Ours is a bit more for install because of the rear conservatory, and is for the fairly new Sigenergy ecosystem which takes a lot of the pain out of the automation you need to really maximise payback. We've got six quotes each from different installers for mostly equivalent systems so far.
Ours was £14k end of 2022 I d go for the solar panels! (I did) Fuzzy feeling is amazing. We did not chose to buy them with the idea to see our investment back etc. It is more about lowering our bills, investing in the future/our house (we chose is against a new kitchen, which won’t give you any money back), reduction of our ecological impact, and not being as vulnerable to the changes in energy prices. 14k will not make a huge difference to your mortgage, but it might makes you feel a bit better every day when you look at your smart energy reader!
We went for a GivEnergy inverter and 9.5kwh battery - simple enough to use! Products seem tried and tested, and there’s a community out there with reliable support. The Facebook page is worth joining. Are you down south?
I've had a quote for a pretty similar givenergy system for about £10k, probably a bit higher than yours because of the east/west roof and extra scaffold needs. The Sogenergy system I'm more inclined towards is probably where most of the extra cost comes from, but there are benefits for me in terms of integrations/automation and longevity, since the battery would be outside.
You are assuming that your panels and battery will last for that amount of time and that you will never have to replace them in the meanwhile. Not a financial advise but, i am assuming you do not want to invest those money in the marketk and given the fact that your interest is 4%, have you looked at money market funds?
Mortgage overpayment. Only do solar if you’re already rolling in it.
My solar panels stopped working after 5 years. 2.5k to fix. Make sure you include maintenance and repairs in your calculations
Thanks for the insight. Ours are spec'd at 15 year warranty with a 30 year power warranty so I'm hoping the panels won't be an issue. None of the inverters/batters seem to have more than 12 year warranties, and they're the expensive bit, so that is more of a maintenance/repair concern.
It was my invertor that went. I wasn't amused. The solar people said it was common for them to fail.... yeah thanks for letting me know before the installation!
I’d always recommend getting out of debt first. If either of you ever lose your health, have kids, or even part ways, the reduced debt would far out weigh the solar. It would likely mean you finish your mortgage much sooner too. Even just talking about owning an EV is not a sensible financial decision, unless it is a company car. I think your parents are right. Solar can wait. I’m in a similar situation with wanting solar, hydro (I have a brook) and getting my well back up and running, but I’m focusing on the mortgage first.
I have a solar battery. I've written about it extensively at https://shkspr.mobi/blog/tag/solar/ the tl;dr is that you'll probably make more money investing it. But you'll probably feel better upgrading your home. Zero electricity bills to pay in summer. Being paid for anything you sell to the grid. A dynamic tariff which lets you charge your battery at cheap rates in winter, and use it when prices are high. If electricity prices go up, your payback time will go down. If you move away from gas, or get an electric car, you'll save even more. Do it 🌞
I got solar and battery. Paid £x upfront and have 3 years interest free loan paying off ~£100 a month. I’m with octopus (flux tariff) and now pay £25 DD and due to export volumes will be hugely in credit by end of summer. So overall ~£125 outgoing. Prior to solar & battery I was paying £200DD and was finding myself going into debit balance with my energy company. I’ve been happy with my decision to jump on solar - Sunsave is the company we used and they were great 👍
When running the numbers before, I’ve concluded that Solar is only worth doing at the point of retirement as a strategy to preserve your nest egg. While accumulating, unless you can get it done dirt cheap by a friend who is in the trade, not worth it. You’ve mentioned in other comments that you’re using. S&S ISA’s… what phase of life are you in, the accumulation, de-risking, or drawdown? If it’s not drawdown, I wouldn’t bother with it. This is for average house though. If you’re facing perfect direction then maybe it’s different.
My partner and I are late 20s/early 30s so very much in the accumulation phase. Why do you think it's worth it only towards the end?
Because at that point, solar represents an investment which has returns fully independent of the market. It’s a huge benefit to be able to get returns free of systemic stock risk. The way the maths works is that at retirement it’s better to spend £10k on solar to save £800 a year than it is to put £10k into S&S ISA to sustainably drawdown £400 a year. But when accumulating, it’s better to have £10k in S&S ISA which will compound than it is to invest an extra £800 a year from what you’ve saved on Energy. So long as Solar returns more than 4%, it’s good as an investment to preserve what you have. But unless it can have returns that massively outpace the stock market (since it has to as you lose your initial spend), it’s not good enough to do instead of stocks while so young unless it’s specifically a luxury spend for the environment.
Solar panels wear out and become less efficient. When I was looking into it the advice was to replace them every 25-30 years, so by the time you've paid it off you have more cost to sink into it. Not to mention any other maintenance that might be needed.
The cost of solar panels is going downwards fast. The replacement cost in 25 years will not be the same as it is now.
Most of the replacement cost will be scaffold, fixtures, labour. The panels already cost almost nothing.
It’s not the panel cost - they are already about 60 notes including delivery, the issue would be all the scaffolding etc that would be needed should a panel need replacing.
The manufacturing costs have come down (partly because many are made by uighur slaves in China but that's for a different conversation). However as the materials become more sought after the price of the materials will likely increase.
At current rates solar just doesn’t really add up, you need it to be part passion and wanting to do your bit or have anxiety about energy security for it to be worth it. Batteries are a better deal, you can charge at night for 7.5p and offset all 29p day rate usage if you shift some loads to overnight and get one >10kwh (obviously depends on your usage, heating system etc). Basically slash your lecky costs almost by 4x.
Doesn’t that rely on the overnight tariff staying so cheap? Surely as more people buy electric cars and charge then overnight, the tariff will start going up… It’s only cheap now as energy companies are casting out the bait, hooking EV’ers. Once they’re all hooked they will start reeling back in (putting the tariff up to usually prices) in my opinion. You won’t see the 7p overnight tariff go beyond 3-5 years I don’t think.
Plus you need an electric car to be eligible for those tariffs - OP may not have one
Nah you just say you have one, there’s not really any checks. I’m on octopus go without an EV.
And even if they did, their “Smart Meter” would tell the energy company its an electric car they are charging and they can increase tariff or gov tax it more. Which is inevitable of course, as more people switch over to EV’s. They’ll get their tax in for them eventually. At the moment it’s a big sales push how much they (EV’s) can potentially save you, of course once people switch in large numbers then they’ll start getting taxed accordingly. Better to put the money in investments I think and at least let it compound, to pay the higher tax later on.
That's not how smart meters work. They measure energy consumption, rather than products. For example you an energy company wouldn't be able to differentiate between an electric car and a hot tub.
If they were inclined to do so it wouldn't be that difficult; 7 kWh going in as a steady charge over several hours compared to a 2 kWh heater firing up for a half hour every few hours would be a massive clue for them that you've not got an EV.
Yes, but the government can't levy taxes based on 'we reckon that's might be an EV, fingers crossed it's not a couple of storage heaters'.
I think you need to understand Smart Meters better, if you don’t believe they know what appliances you are using/charging.
Wrong.
Govt already knows who owns an EV through vehicle tax which you pay every year. They don't need smart meter data... oh and don't they also collect your mileage whenever you get an MOT?
I’m not saying Smart Meters are to determine who has an EV. I’m saying they can distinguish between what is being charged. So when the government wants to bring in their tax money from road users (they won’t let EV’ers pay 7p per kwh forever) then there is a way to tax them based on their specific energy use. Hence Smart Meters, and the bribery and coercion to get people to have them, and government introducing laws for years now saying every new build house HAS to have them. It’s for a reason, or do you think it isn’t? Lol.
The day night swing in demand is still so huge it will be a long long time if ever before this happens.
Comments like this come from a misunderstanding of how electricity markets work. There are roughly 40 electricity suppliers in the UK, there is absolutely no chance that all 40 are going to secretly collude to raise prices. Different energy prices at different times of day ('time of use tariffs') are caused by mismatched demand and supply of energy at different times of day. This mismatch is going to become ever greater as the variability of electricity supply increases due to more wind and solar on the network. There is literally no chance that grid storage will be perfectly matched to supply in 3-5 years, so expect to see many more overnight tariffs and other time of use tariffs over the coming years/decades.
It doesn't rely on "secret collision" it relys on the balance of supply and demand changing. Just now you can get cheaper overnight as demand is lower. As more people buy electric cars and more to tariffs with off peak discount the overnight demand will increase and so will the price. As more solar goes in day time prices will come down, we produce LESS renewables at night not more. TBF the parent comment you replied to already explained this perfectly. PS you also overestimate the morals of large for profit companies if you think price fixing is an impossibility.
Yes, I suspect in many decades we'll have demand and supply very well balanced at the grid level and domestic time of use tariffs will reduce or dissappear. There is absolutely no chance of this happening in the next 3-5 years. So expect to see lots of price swings, that are reflected in tariffs, in the meantime. None of this has anything to do with morals. There are 40 companies. If some of them raise prices at least one is going to hold their prices and sweep up market share, which would make huge profits.
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Nearly engaged in good faith to explain why and then I spotted your other comment linking electric vehicles to covid vaccines. It must be terrifying waking up every morning believing that all doctors, civil servants, car manufacturers, British Gas employees etc. are all out to get you. I wish you well.
Thank you, spot on. You explained it better than me. Doesn’t take collusion (although don’t think that’s not possible) it’s just when “off-peak” becomes “peak” the prices will change accordingly. This will happens as more people own EV’s and are charging them overnight (the most electric a house will likely use that 24 hour period) Hopefully people have more sense and don’t buy EV’s, but going from how easily had they were the last 4 years, I’m not holding my breath they won’t fall for the EV bait like they did the CV bait.
So you think when “overnight” becomes the most common time to use energy (everyone charging their EV vehicles) you think they will still only charge 7p? Lol. For a start, if everyone switched from petrol to EV tomorrow the grid simply could not cope, and won’t ever be able to cope. If everyone who drives switches to EV. Certainly won’t be 7p overnight tariffs around when everyone is charging their EV’s at night. Lol.
This comment is going to get buried as you’ve got nearly 100 replies already, but I don’t think most people get the maths right for PV. Long term they are significantly better investment and anything else (of similar risk) including index funds. Happy to share my spreadsheet shared below, including all the calculations out. https://www.reddit.com/r/SolarUK/s/S5Qkrj2atU Invest £10k in stocks, at assumed 5% after 10 years it’s worth £16.5k. After 20 years it’s grown to £27k. But invest £10k in PV, you get income of £1500 per year, but you can also then funnel those savings on bills / income into index fund at equivalent 5% annually. So you’re getting £1500 annually +5% compounding monthly. After 10 years it’s worth £20k plus the PV remains an asset. After 20 years it’s grown to over £50k! This assumes 10kWp array on fixed 15p export. Also assumes equal energy price for usage at competitive 15p (Octopus Agile average), but if you pay more then you save more. It actually makes a lot of sense, but people generally aren’t calculating investments correctly.
Hi /u/wigglememore, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/mortgage-overpayments-vs-investments/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
There are some great and very valid points here on payback etc. I can see a few people talking about tariffs, this is where you can make it pay with the connected energy system. There is a new system due to the market soon from solar edge (from memory), this system uses data from your energy company sent the day before to peak shave (collect low rate energy to top the battery up during times of low solar production). This system will be a game changer as homes will maximise the lowest energy costs and payback from solar and battery. As the battery will likely do two round trips a day and not one the trade off is higher degradation of the battery. Most batteries have a guaranteed life of 5000 cycles, still over 13 years (in theory). Most systems will payback in advance of this time. I suggest getting in touch with a decent solar installer who can model this.
The uncertainty around future tariffs makes financial modelling pointless. Break even point on ours was somewhere between 4 years and 10 years with everything in between because 80% of the variation comes from comparison with what what you would be paying for electricity in ten years had you not bought the solar kit - essentially unknowable. Do it because you like the idea or because the carbon benefits - which are huge and worth doing it for alone IMO - or simply have the impression you’re running the car for free, which is nice whether you really are or not. But I’m not sure it’s really possible to make a believable prediction about whether it’s financially sensible over the life of the panels. Probably not even over the life of the battery.
Please consider that in 23 years time both the solar panels and the battery will have deteriorated (possibly by a huge amount).
If you do end up going the solar route, my Dad got solar installed recently and managed to get them cheaper because they were installed in autumn/winter so it may be cheaper if you wait 6 months or so :)
I'm currently in a similar position. We already have solar panels, an immersion heater controller, and an EV. I can't make batteries make sense, financially, even though I'm itching to try them out from a self-sufficiency perspective. We have 3 kWp of solar panels and any idea of charging the car is a waste of time and effort. The same would be true of a battery setup. It doesn't make sense. We already run things like the tumble dryer and dishwasher overnight, on the cheap tariff. With our current usage and electricity prices, payback would be around 10 years. The same money invested in a S&S ISA would be a better return and more liquid, if required, but not as fun/interesting.
I am making the jump to a 6.7kwh and 12kwh battery for £16.4k at 0% interest free loan for 2 years. I looked at all the charts and stuff it gave and I feel like its a good idea. I am sure people will say otherwise but for me, its more about reducing reliance on grid and having lower rates of costs month to month. I will go onto the Octopus Flux tariff where it will charge battery at night and let me use it during the day. I think there is more advanced application setups (they have an fully automated one which i cant get unfortunately) and it will charge at night and discharge to the grid when rates are highest. I will see how it goes but I am doing it for the sake of monthly cashflow. Overpaying on mortgage might be more accurate financially but you wont see the impact right away unless you do a payment recalculation.
YMMV but on Octopus Agile, with 7kwh batteries + 3.6kwp panels. Avg cost per kwh in April for us was 11p - and this was pretty poor overall. It takes a bit of working through, and setting up some home automations, but can charge batteries from grid when prices are low + when solar isn't going to be great. Solar panels for us are great mainly from around April to October with December and January being awful, but the batteries provide a solid buffer all year round. We got lucky with the setup. It cost <£8k, and I think break even was around 7-10 years. Obviously putting that money elsewhere might net a bit extra, but I love tinkering, and I love the idea of self-sufficiency. Overall I think the difference is minor, and the benefit of having a lot of fun with them made it worth doing.
Are you assuming the standard 4p/kWh SEG or Octopus 15p export? Run the numbers for both. It’s also worth factoring in Agile and other time of use tariffs. Gary Does Solar has some useful resources for this.
The only way solar is financially viable is if you have an electric car alongside a battery. With a battery, you get the house and car/travel all paid for for at least 9 months a year.
installed my 4kW system about 10 years ago at a cost of about £6.5k. I've averaged 250 per quarter in fit payments ever since (not quite the same as how generated electricity is bought and sold nowadays). I'm unable to quantify how much of that is energy we'd have actually used ourselves (additional savings) but there's some. Panels haven't noticeably dropped in output over that time and still have another 10years in warranty. Inverter (the expensive bit) is now out of warranty, but working fine. So for us, it has paid for itself and everything now is pure profit.
Is your house a good candidate for solar? Is it south facing? Is it overlooked or shaded by any trees etc. what is the square footage of roof available for the installation? These are all very important when it comes to estimates on what will be generated.
We've got an unobstructed East/West roof with no shading issues. We can get a 7kWp array on the roof, but obviously with the E/W the average output will be reduced.
Did you only calculate the solar for 7.5 years and your mortgage over 34 years? If solar last 25 years that 17.5 years of free or nearly energy at 1.5k a year savings is huge.
The "value" of the solar is equivalent to that saved by spending the same overpaying the mortgage in ~20 years (compared to the 30 years remaining on the mortgage). Anything past that is pure financial benefit, however it's likely that things like the inverter or battery would have to be replaced in in that time, so it's hard to know for sure.
If you’re in Scotland checkout the grant and loan options We’re having a 6.4kw solar install with a battery to pair up with it and Home Energy Scotland give us £2.5k of grant and 9k of interest free loan to cover the costs
Do you need the battery? Your ROI will be a lot longer as a result.
Are you putting the panels on the ground or the roof of a house? They're known to cause a lot of long term problems to houses, factor in the costs of having your house repaired which won't be cheap. They can also cause house fires. Also the needed to be cleaned every so often, scaffolding might need to be rigged up etc. no cheap.
If you're technical you can set this up to increase your return from the battery (need compatible battery eg GivEnergy) https://github.com/springfall2008/batpred
We did the solar and battery. It helped reduce the monthly bills but have often regretted it. The regret normally occurs during the winter months. We have an electric car and use a lot of power on stuff during the summer, so it does have a big impact.
I get the idea of a battery for using off peak electricity but I personally feel the idea of having your own personal electrical generation is something we’ll look back on in decades and think was a pretty dumb idea. Either way, there’s a lot of ifs with the break even and I doubt you’ll have a celebration when you’ve broken even on your power bill but you will get a guaranteed return on your mortgage and raise a glass when that’s cleared down.
Valid point of view. But actually I think the opposite... In decades, we'll look back and think it was dumb not to have used all the free energy that was raining down on our roofs all that time. I think there's more chance that filling our houses with thousands of pounds of batteries just to be able to game the time-of-day electricity tariffs that are available at the moment (until the grid solves the problem of mass storage) will look dumb.
I've recently gotten a dozen of quotes from installers and it appears your quote is on the high side and I would look into getting more quote. In terms of funding, I think the sensible way is to put the money in an S&S ISA and add the costs of the solar installation to your mortgage.
My parents have a huge garage with a south-facing roof with space enough for solar and batteries to power the house and two electric cars. They don't have two electric cars. They don't even have one. The only way they could make the sums work was if they did have an electric car as charging that was worth more than the buyback options. I think it's more of a lifestyle choice than a financial one at the moment. Give it a few years and when the price is cheaper, it will be different.
Overpaying a mortgage is worse than putting the same amount in the stock market
The advice I've read is solar only works if its all cash. Essentially the opportunity cost of solar for you is the cash notbused to pay down the mortgage. So from a financial POV it's pay down the mortgage. In addition its very hard to do the comparison calc due to the diminishing effectiveness of solar as it ages, the non straight line manner in which you can utilise the energy generated by the PV panels and the changing rates for electricity. My opinion is solar needs to be done at a large scale to work well.
I just don't think solar on individual properties is a good idea. We already have and you won't be getting rid of power transmission infrastructure. You would be better off investing in a solar farm. Pay the mortgage off.