A guide to investing in solar Photovoltaic (PV) Panels by Ann Stanley
Contents of this guide? • • • • • • • • • • •
Benefits of investing in solar panels How do solar panels work? Feed-in Tariff Installation of your panels Performance of your panels Funding your investment How to buy solar panels? Working with Solar-Help Your proposal What next? Extra information for business owners (commercial)
Benefits of investing in solar panels
Benefits of investing in solar panels Free or low cost electricity • You are likely to save 40-70% of your energy bills over the next 25 years (currently £150-£250/year) • You can save more by switching to electric heating systems or using appliances in the day • These savings will become more significant with electricity price increases in the future Environmentally friendly • Reduces your carbon footprint by as much as 1 tonne of CO2 a year Financial benefits • Installation typically increases the value of your home by £6,000 - £10,000 • You will receive monthly payments via your energy company for the electricity you generate • This is guaranteed for 25 years by the government backed scheme called the Feedin tariff (or FITs) • A household could receive FITs payments of £750-£1500 per year tax free – equivalent to 7-10% per annum
How do solar panels work?
The 2 main types of solar panels Solar Thermal
Courtesy of TD Solar
Solar Photovoltaic
Solar thermal (heating)
Solar Thermal (heating) • Solar heating systems use energy from the sun to heat liquid contained in tubes in the panels on your roof • Solar thermal can provide around 40-60% of your hot water requirements throughout the year. • Through the Government’s Renewable Heat Incentive, you will receive a set amount for each unit of energy your solar heating system generates, whether you use it for your home or not – Phase 1 (2011) – one off payment of £300 per unit – Phase 2 (2012) – on-going tariff – payments to be confirmed
Solar photovoltaic or PV panels
Solar electric – photovoltaic (PV) • Solar PV panels are made from photosensitive solar cells, each containing a semi-conducting material (typically silicon) which generates an electric field when the sun shines on it. This is based on the sun’s light energy, not heat energy. • This generates a direct current (DC), which is then converted into an alternating current (AC) via an inverter. • The electricity can be used by you and can save you 40-70% of your annual bill, or it can be fed into the National Grid • A small meter is fitted to the system to measure how much electricity your solar PV panels generate so that you can receive money through the Feed-in-Tariffs
Solar panels made from Monocrystalline silicon PV • Produced from a single block of silicon (grown from highly pure molten silicon). • This silicon is cut into thin wafers between 0.2 and 0.3mm thickthis is the basis of a solar PV cell. • However, they require more time and energy to produce than polycrystalline silicon PV cells, and are therefore slightly more expensive. • These PV cells have efficiencies of 13-18% and are the most efficient type of the three types of silicon PV cell. • Typically require 8m2 per kW
Solar panels made from Polycrystalline silicon PV •
•
• •
• • •
Polycrystalline silicon is also produced from a molten silicon, but using a casting process. It sets as an irregular poly- or multi-crystal form. The square silicon block is then cut into 0.3mm slices. The typical blue appearance is due to the application of an anti-reflective layer. The panels have further chemical processes plus the fixing of the conducting grid and electrical contacts Mass-produced polycrystalline PV cell modules have an efficiency of 11-16%. They are cheaper to produce than monocrystalline units Typically require 8-10m2 per kW
Feed-in Tariff
The Government Feed-in Tariff or FITs payments • The UK is the 69th country to introduce a Feed-in tariff scheme • Feed-in-Tariffs (UK) apply to homeowners and commercial property owners who install a renewable source of electricity such as solar PV panels. • All installations have to be accredited by the Micro-generation Certification Scheme (MCS) • Your FITs payment are secured with a legally binding contract, which you can sell or transfer (e.g. if you sell your property or if you bequest it in your will) • Once you have your FIT contract: – It is guaranteed for 25 years (through Energy Act 2008), so are not subject to government cuts – Rates increase 1st April each year
Generating, using and exporting your electricity (rates from April 2011)
1. 2. 3. 4. 5. 6.
Solar panels Inverter to convert DC to AC Consumer unit (fuse box) Appliances Monitoring Export to the grid
FITs Payments
• Payments vary by the size of the installation, with a lower rate for new properties as compared with retro-fit installs • The FITs payments currently give you a tax-free payment of Help.3p per kW (for retro-fit installations since April 2011). • You will also receive a bonus of 3.1p for exporting unused electricity (this is currently estimated at 50% of the energy you produce) • Most properties will receive £750 - £1500 per year from their FITs payments - this is equivalent to an annual tax free return of 7-10% on your investment • Payments are paid via your energy company and subsidised by their other customers (by increasing energy bills) • Payments are linked to inflation - once you have a contract your rates increase each April • The starting tariff for new entrants to the scheme is expected to fall each year after 1st April 2012 • The government will review the current scheme in 2013, so it is worth acting now!
Installation of solar panels in your home Click here for information on commercial systems
Different types of installation On-roof panels – most cost effective system, does look like an add-on, needs a gap around the panels for rain run-off, no planning permission required (except in conservation areas) In-Roof panels – lies flush with roof, more expensive and less ventilation, no planning permission required (except in conservation areas) Solar tiles – requires complete re-roof and is more expensive and slightly less efficient, no planning permission required (except in conservation areas). Ideal when the roof tiles need replacing or for new builds Flat-roof mounted – often used for commercial properties, needs blocks or A-frame mounting, with spacing to prevent shadows, requires planning permission Ground mounted – generally for commercial use, requires large amounts of land and planning permission
On-roof
Courtesy of TD Solar
On-Roof
Courtesy of Aarco Electrical
In-roof (integrated)
Courtesy of TD Solar
In-Roof (integrated)
Courtesy of TD Solar
Roof tiles
Courtesy of TD Solar
Whole roof replacement
Courtesy of TD Solar
Whole roof replacement
Courtesy of TD Solar
Flat roof
Courtesy of TD Solar
Ground mounted
Courtesy of TD Solar
Click here for information on commercial systems
Retrofit installations
Courtesy of Aarco Electrical
New builds and extensions
Courtesy of TD Solar
Inverters and meters
Courtesy of Aarco Electrical
Performance of your panels
The factors that effect the performance and output of your system Technology of panels Quality of Installation Climatic conditions
Initial investment
Return on investment
Property & Location Energy used Energy generated
Payments from Feed-in Tariff
Exported to energy company
Property and location • Size of property – influences size of roof and maximum area of panels (also called collectors) • Roof aspect – maximum power for south facing aspect compared to east or west facing (where it may be necessary to have two separate systems of panels or strings) • Roof type – angle of pitch, tile or slate, condition of rafters • Shading – moderate or high shading may prevent installation • Height – over 3 stories requires special scaffolding • Effect of climate – your location will influence hours of sunlight, cloud cover and wind (see next slide)
Climatic conditions • The amount of sunlight – the voltage of the panels varies between 5-50 volts so the power (watts) increase with more sunlight • Low light levels – different panels operate more effectively at lower light levels hence they can significantly increase the amount of hours that electricity is produced • Hours of sunlight – the more hours of sunlight the more power produced, this is effected by the time of year and where you are located – consequently you may need to use more electricity from the grid during the winter • Cloud cover – the further west you are the more rain and cloud cover you are likely to have – this will effect the overall output of your system • Cold – your system should work even at low temperatures • Heat – high summer temperatures can adversely effect the efficiency of your system • Shading – can reduce the effectiveness of a whole series of linked panels.
Technology and manufacturing of the solar panels • • • • •
Type and grade of silicon used in cells Quality of other components Manufacturing processes and quality control Panel efficiency typically 5-18% Expect approximately 1% drop in performance per year (or 20% over 25 years) • Performance guarantees from the manufacture can vary – – Expect a minimum of 2 years no quibble guarantee (some give 5 years) – After 2-5 years – expect replacement of panels based on reduced performance (beyond the expected rate) – You may need extra insurance to guarantee the inverter for 25 years
Other technical factors that affect performance • • • • • • •
Power output per panel (up to 300W) Size and number of panels used Level of daylight before panels start to operate Negative effect of high temperatures Quality of wiring and other components Quality of inverter(s) Shading can cut down the efficiency of the whole series of panels as the shaded areas cannot produce the same power as the unshaded areas - causing a bottle neck and dropping efficiency by up to 50% • The adverse effects of shading can be avoided using a good design and technical solutions
Ongoing maintenance & guarantees • Minimal on-going maintenance required (annual cleaning and performance check) • 2-5 year no-quibble guarantee (depending on installer and/or manufacturer) • 5-25 years – equipment replaced by the manufacturer if performance drops below specific levels
Funding your investment
We have capped the prices for a standard on-roof system 2.0kW
3.0kW
3.68kW*
Typical Panel area
16m2
24m2
32m2
CO2 savings per year
738kg
1108kg
1477kg
Typical Year 1 energy savings
£140
£210
£258
Typical Year 1 FIT payments, including bonus for exporting**
£748
£1122
£1376
£10,000
£14,000
£16,000
Cost for on-roof system
Average return per year over 25 8.4% (based on 8.8% (based on years 22% tax) 22% tax) Years payback
9 years
8 years
*Maximum size of a domestic system that can be fed into the grid, as of April 2011, is 3.68 kW (16 Amp single-phase), unless G59 permission is obtained ** SAP Calculations based on south facing, optimal roof pitch and no shading
9.2% (based on 22% tax) 8 years
Additional charges may apply: • More than one roof aspect e.g. east and west facing (extra £1,000 - £2,000) – Extra scaffolding – Extra inverters
• Integrated or in-roof panels (extra £1,000 - £2,000) – Removal of old tiles or slates – Higher cost of the panels
• Specialist ceramic (PV) roof tiles (2 - 3 times the cost of a standard on-roof system), although you may be able to save on the cost of normal roof tiles • Detailed Survey and creation of plans for integrated panels, whole roof and roof tiles on new builds, extensions or to replace existing tiles (refundable £500)
Financing your investment • From your savings • Re-mortgage on your property at a low interest rate • Loan or credit – secured on our property or even your credit card • Main consideration – will your FITs payments exceed your loan repayments
How to buy solar panels?
Normal sales process Identify installers
Installer(s) survey property
Get quotations
Choose installer
Sign Contract
Pay deposit
7 day cooling off
Work starts
Choosing an installer • To qualify for the FITs payments you have to use an MCS accredited installer and MCS approved equipment • You should only use experienced electrical installers (and/or heating engineers) with a range of recognised accreditations • The importance of installer expertise is crucial at different stages: – – – –
Initial consultation, survey, specification and recommendations Choice of materials Quality of work After sales service including guarantees
• Many new installers have been added to the MCS register in the last year - to take advantage of the predicted boom in renewable energy. • If a quote is too cheap then the installer could be using low cost equipment or have limited practical experience, as compared to more established companies
Working with Solar-Help: An introduction to our services
What is Solar-Help? Solar-Help is a joint venture between: • Anicca Digital Ltd – web design and online marketing agency – providing marketing and sales expertise • Specialist MCS accredited solar panel installers from around the UK – East of England, East Midlands and Northern Scotland - Aarco Electrical Ltd – 38 years experience in electrical contracting with over 100 installs in the last 18 months – Rest of England and Wales - Forever Energy Europe Ltd – 22 years in the renewable energy business (installers, trainers and distributors) – New build and specialist integrated roof systems – TD Solar Ltd – 6 years experience in integrated panels and roof tiles for new builds, conservation areas and specialist designs
Why use our services? • We are independent - so we only work with a few handpicked and well established installers from over 1600 companies on the MCS register • We have fixed the maximum sales price for different size systems, so you know exactly what to expect before you meet the installer • Our partner installers have outsourced their sales and marketing to us - so they can focus on what they know best – installation! • By establishing most of your requirements in advance, there are no high pressure sales techniques (note these practices are not allowed as part of the MCS accreditation) • We get paid a fixed rate of commission for successful sales – so this is great incentive to make sure we do a really good job for you!
Our Role • We help consumers (and businesses) to understand the complex process of investing in solar panels • We explain the financial aspects of investing in solar panels and how to receive the government backed rebate (or Feed-in Tariff) for generating your own electricity and selling it back to the grid • We prepare a proposal of your system requirements and introduce you to our partner installers • We visit you to explain the proposal and answer any of your queries. We can also survey your property during this visit.
Our partner installers
Accreditations
Your proposal
Buying with Solar-Help 1) Initial contact with Solar-Help
5) Site Survey
2) Provide free Guide and advice
6) Sign contract & pay deposit
3) Provide estimate
7) Cooling off period (7-days)
Advantages • No high pressure sales techniques • Likely costs known from the start • We recommend the best installer for the job • Only need to have one survey
8) Preinstallation visit by Electrician
4) Call to book appointment
9) Work starts
Stage 1 1. We call you to discuss your requirements: • Our staff have had extensive training to enable us to explain how solar technology works and to understand your individual circumstances • To get an initial idea of your property and the size of the system you require • Information on your budget and whether you are looking to invest 2. We provide you with this initial guide to help you understand the technology and finance issues 3. We will send you a proposal within 7-10 days, with initial recommendations on the options available and the type and size of system you require. 4. We will call you to answer any of your question and ensure you still want to go ahead. We will organise an appointment for a free survey and introduce you to our partner installer
Stage 2 5. The trained surveyor will carryout a free survey in order to assess your property • To measure-up and assess your property • To provide you with a more accurate quote based on our initial estimates e.g. taking into considerations any specific issues with your property • This takes approximately 2 hours and you should only undertake a survey if you are ready to proceed 6. You will need to sign a contract once you decide to proceed. You will then be required to pay a deposit of 25%-30% to cover the initial cost of the equipment – don’t worry this is fully insured under the REA scheme 7. You have 7 days cooling off period to make sure you still want to go ahead (a requirement of the MCS accreditation) 8. The electrician will carryout a pre-installation site visit 9. Scaffolding and equipment arrive the day before the installation starts
Assessing your property • •
Size of your roof (10-30m2) – this normally limits the maximum size and output of your system Aspect of your roof - this normally influences the performance and output of your system – South facing (S, SW, SE) – East or west facing – One or more roof faces with different aspects – this influences the number of linked panels (or strings) and inverters that will be required
•
Type and condition of your roof - you may have to make repairs or replace the roof if it is unlikely to last 25 years – Tiles or slate – Flat roof or angle of pitch – Condition of rafters
• • •
Wiring and electrical system – condition of your consumer unit (or fuse box), wiring and meters Shading from trees or other buildings – if the shading covers more than about a quarter of your roof then this significantly reduces the effectiveness of your system Number of stories and positioning of scaffolding
Using Google Earth to assess your roof • Assess roof aspect – in this case south west facing • Assess shading – in this case none • Assess approximate area – in this case 24m2
Examples of performance or SAP calculations
Example of a 2kW system
Example of a 4kW system
What next? • We will provide you with a proposal for your specific requirements within the next 7 days • We will call you to answer any of your questions and to determine whether you are happy to proceed to the next stage • We will provide your contact details to our partner installer who will contact you to arrange a survey • In the meantime if you have any questions please contact our customer advisors: • • • •
Jon Stepien – jon@solar-help.co.uk Penny Stanley - penny@solar-help.co.uk Office: 0116 298 6175 Mobile: 07983 567 520
Commercial systems
Solar panels for business owners Where can you install commercial solar panels? • Commercial solar panels can be installed on a range of buildings, including other residential properties, farm buildings, retail units, and most other commercial buildings. • You just need a suitable roof structure, which is preferably south facing and with minimal shading. • You need approximately 8-10m2 roof area for every kW of solar panels. • If you have 3-phase electricity you can currently install up to 12kW without any special permissions from your energy company. • There are currently plans to significantly increase this limit, though nothing has been confirmed. • In addition, you can install the panels in frames directly on your land or on the facade of new buildings, however you may need planning permission. Using the electricity yourself • The scheme is particularly attractive if you want to use the electricity as well. High consumption businesses like manufacturing, offices, holiday homes etc can all make significant savings in electricity use. • The savings in electricity will typically represent a third of the total amount you make each year.
FITs payment for commercial systems
• The FITs payments are banded according to the size of the system • • •
4-10kW = 37.8p, 10-100kW = 32.9p, >100kW = 30.7p
• This is also guaranteed for 25 years and linked to inflation once you have a contract • The FITs payments may be subject to tax – so seek advice from your tax advisor • For a system between 10-100kW the typical annual FITs payment for each 10kW is around £2,250 plus any additional saving on your electricity (typically another £1,000). • It is expected that the Government is likely to significantly reduce the tariff for system above 50kW later in 2011 as they are concerned that investors will draw the FITs money away from domestic systems • The cost of the install also drops to £2,500 to £3,500 per kW (depending on the size of the system).
G59 and limitation on exporting electricity to the grid Maximum amount of electricity you can feed into the grid • If you are feeding into 3-phase electrics there is a current limit (as of April 2011) of 3.68kW (16A) per phase before you require special permission (G59) from your energy supplier or Distributor Network Operator (DNO). • However this is likely to be increased to 17kW per phase in 2011 • The cost of a G59 application can be prohibitively expensive as the local DNO can charge for the G59 relay and associated equipment upgrades, someone to test the G59 equipment and the DNO to come out and witness that test.
Commercial – on-roof
Courtesy of TD Solar
Commercial - fascade
Courtesy of TD Solar
Commercial - fascade
Courtesy of TD Solar