* NOTES SINCE PUBLICATION * I completely forgot to add VAT to the computed "without solar" column in the video, but the spreadsheets have been updated now. For those who are wondering about comparing the payback you would have received if you'd invested the money instead, this video on Tim & Kat's Green Walk channel is a great one to watch: th-cam.com/video/Rukx1X75te0/w-d-xo.htmlsi=nTSbzy2gRxJ1A5vE
I replaced an oil boiler with a heat pump as part of the same energy 'upgrade' project installing 17 panels and a Powerwall2 in July 2022. Mostly done for environmental reasons but interested in costs obviously. Due to demand we had the panels several months before we got the Powerwall2. We also had a delay getting a smart meter fitted and onto a solar tariff so that was couple of months with no export tarrif. We were initially on the Tesla managed system rate (25p import 25p export) but this was withdrawn at the end of the first year. We are now on Octopus Flux tarriff - which I think will save us more. I've been struggling to estimate a payback period - it does seem to be the first question most people ask when I talk about the system - so I'll play with the spreadsheet! To support one of your other videos, batteries are brilliant! Before the powerwall was installed we were often pulling from the grid for short periods during mainly sunny days when clouds reduced generation, battery helps smooth this out. We charge every night using cheap rate and then run the off the battery during peak rate. Even during the winter we never got to £1 on peak rate for the entire month! We also get over £100 per month back during the summer months c. £45 more than we use those months. In kWhs - in mid winter months we used roughly 40% during cheap rate vs 60% standard, in the summer it's more 90% cheap rate. It's very driven by the heat pump so its only December and January where we used more standard than off peak units. For those interested, air sourced heat pump has been very easy to live with, only negative is that when it is very cold (below 0c) the unit is noisy as it's working hard (best not look at the daily kWh... I think we peaked at 80 when it was -9c.) but even then only as nosiy indoors as the old oil boiler.... So, still not sure of my payback period but a very happy owner!
I have had my solar and battery system since November and wanted to do a spreadsheet but kept getting confused. This seems a really good way to track.. thank you!
FYI I have installed North and South arrays (both sides of a large quad garage) and the Noth side is running far better than expected delivering an average of around 60% of what my south facing panels give! Far better than I expected.
@@GaryDoesSolarI live in the UK, Essex. Interestingly, during the winter months the production was mostly the same on both the N and S facing panels and I assume this is because almost all the light is diffused indirect light due to the constant cloud cover.
@@NacNacMOTT Yes, when it is sunny then the north facing panels don't compare to the south facing ones. However since (in the UK anyway) most days are covered in cloud at some sky level: I find that most of the winter is generating power from indirect sunlight and generating mostly the same for N and S facing. Oh and yes, they are the same so I have 6Kw on both sides. For me, the added cost of the extra panels represented an extra 15-20% cost to the project but will deliver circa 60% more power which I'm most happy with.
@@NacNacMOTT I tend to find that I know more that most installers regardless of the topic mainly because I've researched it to death and I'm up to date on the knowledge. However the installer brings their massive value in how to actually put my paper-plans into reality (and if I'm really lucky they will bring some added value too to my paper plans).
Hi Gary You might recall the spreadsheet I sent you a while ago which analysed the cost benefit ratio of my proposed installation based on the quote I had at the time (October 2023). I included the number of battery units as well as the solar panels and the offset cost of the same investment in NS&I 1 year bonds which yielded 6.2% at the time as well as depreciation of the system to include replacement costs for the panels (25 years) inverter (10 years) andthe batteries (10 years). The overall message was that the more battery capacity I added the longer the payback and the lower the yield. Of course the prices and costs are out of date but they can easily be updated to match those for any individual setup. I don't see how I can attach it here but I have sent it to you again so that you can include a link for others if you think it would be useful. Mike
Hi Mike, my apologies - I didn't see your comment here until now (sometimes TH-cam gets the notifications wrong). Please feel to email me@GaryDoesSolar.com with the latest version you have and if you're happy for me to, I'll upload it to here: garydoessolar.com/payback_spreadsheets/
Thanks for this and sharing your spreadsheet. I’m just going through the early stages of getting solar and battery installed which i hope to have in the comings months, my current estimate for payback is just over 8 years but i’ll be tracking like a true nerd 😅.
Congratulations on your first year Gary! Our installation went live in August last year so I am still enjoying seeing the picture unfold as each month progresses, but so far so good - particularly as the days are getting longer. I've ended up analysing financial savings under three headings: volume (i.e. importing fewer kWhs from the grid than we consume); price (i.e. paying less for each kWh that we do import because of the ability to charge up the battery on cheaper overnight rates); and export income. Its interesting seeing how the balance between these different savings has shifted over the year, partly down to seasonality and partly down to different strategies around charging the battery.
Hi Michael, thanks for your kind words - I'm not sure if I feel the year went quick or not. I feel it went slow - but actually from what I hear, that's a good thing - when you're occupied with lots of things, the days go quick but the years go slow - I think I'd rather have it that way round! ... alas I digress! I like the way you carry out the financial analysis!
Another great video. I do something similar in my spreadsheet, but I also include gas (if you have gas installed) into the equation as your gas costs can also reduce as a result of being on a suitable TOU electricity tariff such as Octopus Agile. If you automate when your hot water cylinder is heated and use electricity when its cheaper than gas (or when its free or plunge price), then the overall HW heating costs can further reduce your overall energy costs and further speed up the payback.
Good point re gas. Where I struggle is putting a financial value on the gas saved - which depends on making a 'best guess' as to the real efficiency when using it (which in turn varies with lots of other factors like how heavily loaded the boiler is at any one time). Comparing the solar and gas power needed to heat my hot water cylinder given similar starting conditions the efficiency is approx. 50%, way below the nominal 90+% that a condensing boiler is supposed to have (because of lot of heat is used to heat the boiler itself, and circulating water - which leaks away afterwards). Any suggestions to refine this value calculation would be appreciated.
Gary! You are the man! For me, your videos have made far more sense than so much of the standard TH-cam fayre. One thing I’d love you to do a video on is just how much should we be paying to get a solar/battery installation. I want to get in now, but really think I should wait until Powerwall 3 and equivalents are available. I’ve been quoted £30K for 20 panels, Enphase microinverters and Powerwall 2.. but I keep watching PW3 videos and it almost seems like a no brainer? I dont want to wait though! Anyway maybe a brave idea for a new video? Well done on all you’ve done so far though. It’s great!
Hi Carl, thanks for your very kind words - it's so great to hear than my videos are well received :-) Now, on equipment pricing, I tend to stay away from that in my videos because it quickly dates them... but it's worth keeping an eye on social forums like this one, where pricing is discussed all the time: facebook.com/groups/2197329430289466 All the best with whatever you eventually decide upon!
Great video. If you have an EV and home charge this will inevitably be included in your home useage so there does need to be an offset for saved petrol in the spread sheet. Just a column to add what you would have spent each month.
Also, if you have an EV you aren’t on a standard tariff anymore, so actually your savings might not be as fast. (I did some rough calculations and it added a few years on my payback)
Excellent spreadsheet, thank you. I'm with E.ON Next, and get paid to export via a cheque (yes, a cheque!) at the end of the year. I found it useful to add columns to work out how much I would be paid monthly, and so the net electricity cost. Otherwise I'd need to do a separate manual calculation to work out the "Actual Electricity Cost", which would be the cost from my bill minus Exported kWh x export rate. The payback chart is very interesting. My panels were installed in October, so I'm excited to now see my export is much more than my import, so I'm making money each month.
Thanks for this video (and the rest of your content). I'm always fascinated to see how others set-up their spreadsheets to track their solar data - I can't believe that I never thought to input the data into a line chart! That now seems such an obvious thing to do but it never occurred to me. I'm not too bothered about payback but if you're keeping a spreadsheet then it's an obvious thing to track against, and a line chart is great for predicting that future date. I've now done exactly that with my existing spreadsheet. I had my install around the same time as you did so I also got caught in the most expensive time to do it like you did, but during my first year with solar then I was under a fixed contract which limited my options meaning that that year isn't a good predictor for my future numbers. I now have had a couple of months with Octopus on my redesigned spreadsheet to account for the four payback avenues on offer, so I've plotted that developing data on the chart up against the expenditure. I've also added a "Fantasy" guestimate line based on how I expect this full year to develop, which will be an interesting reference point to look back on in the future. Should the "Fantasy" line prove accurate then I'm looking at payback within 10 years. I also created a second chart where the expenditure figure also accounts for a generous interest rate for those who argue that true payback should factor-in compounding; in that scenario then it's another 7 years or so - still well within the warranty of the panels and the inverter, though the battery will be out of warranty by then. So those charts will be another fascinating thing for me to track (but not fascinating for anyone else!) in my spreadsheet as the months go by and new data becomes available!
Hi there Jack, that's fab to read about your adventures in monitoring your payback! And really great that my spreadsheet is of some use to you as part of that :-)
Very useful indeed 🫡👍. We’re coming up 1 year now with our set up (6.5kwp, and a 6kw battery, 16 panels - 8 @142degSE, 8@320degNW). 1st 8 months was tied to BG (but at 25p/kwh), now with Octopus Intelligent Go as also now have an EV), but had to get main fuse upgrade to 100a, and then Smart Meter etc. Certainly slashed the electric bills, with current sunny days. Looking at 70% or more of our consumption from solar/battery - when sunny or bright with inverter doing its job!
Thanks Rob. I like your strategy around avoiding clipping. I should try something similar as I have DC Coupled batteries 👍🏻 Perhaps my latest video will get you thinking again about charging overnight?
Good analysis Gary. Others may say that the lost interest on the initial solar system investment needs to be accounted for somewhere but IMO with interest rates on savings & ISA's being so low it's hardly worth worrying about. Battery prices have dropped & no longer attract VAT as a single installed item. Solar panels are less than half what you & I paid in March last year so now is a good time to invest in solar & batteries if you can afford to do so. I've just added 5 extra panels & an extra 9.5kWh battery to my system last week to maximise my system potential savings & export payment options. Because I never changed my standing order payments to Octopus I've just applied for a £1,200 refund because after 1 year using solar (without & any excess solar payments or saving sessions) my account is in credit. This also includes charging a 64kWh EV every other night or two from 30-80%. I have now changed my tariff to Intelligent Go & set up a payment plan for excess solar as well so the savings going forward should be even better than the initially estimated 8.5 year break even point 🤞 No Heat Pump yet though.
I don't think it's insignificant. My purchase last march was funded from a maturing Cash isa and if I had reinvested I would have earned £600 in interest. So my £1440 in savings last year from solar is drastically reduced and my estimated 8yrs payback period increases to 13.8 years if I take lost interest into account. Obviously interest rates will vary but so will tariffs so its difficult to predict what will happen going forward. I can only look at last year's performance
Your videos are so useful , clear and succinct . Having had solar (4kw ) alone from 2010 my solar spreadsheet whilst far from as slick and neat as yours ,adds in the lost interest each year I would have had from my capital outlay if left in an interest account. This currently ,with higher rates , considerably prolongs payback for newish install versus those many years ago when interest rates on capital were often under 1-2%. Maybe add a column on the remaining balance to add in lost interest at a certain interest rate. Also most sane people without solar would realise they should be on tracker and perhaps it’s fairer to use tracker prices (not Svp) to see what your bill would have been without solar. This again prolongs pay back. Keep The videos coming
Thanks for the very kind feedback, Mark. Now, others have suggested the same. The video and spreadsheet were really just about trying to work out the breakeven point - not to see if money was better spent elsewhere... but if others wanted to improve the spreadsheet, I'm publishing any updated spreadsheets folks send me here: garydoessolar.com/payback_spreadsheets/ :-)
Very good as usual Gary. How to factor in a heat pump is interesting as the PV powers the heat pump and removes the cost of gas. I had my heat pump installed first, a little under two years ago and the solar later that same year and I started it all with an EV. Since then the available tariffs from Octopus have been getting better starting with Go then Flux and more recently Intelligent Go and being able to swap seasonally. I had initially estimated with a spreadsheet modeling the installers data that I could save perhaps 75% over my old gas boiler heating system and electricity use but with the new tariffs and banking summer surplus for use in winter at cheap rate my practical results show zero bills over the year. What was a £3,500 annual bill for combined gas and electricity is now zero making payback for the whole system of solar PV plus battery and heat pump under six years. I'm not including the EV or any repairs or variations in electricity cost but on that basis I couldn't be more pleased. The more I try to model everything in a spreadsheet to include the different rates and times the hairier it gets. Tricky questions like adding a second battery, another solar panel, or adding another radiator for better COP all definitely improve efficiency and running costs but whether the extra capital cost increasing the total payback time works out needs a little more work.
In fact one thing you shouldn't do is think another battery stops me going flat in December and January and half my consumption being at peak 30p rate so it all costs 7.5p rate instead, perhaps saving £225 at that time of year, so payback time is 30 years so it's not worth getting another battery. How can that be when the payback time for the whole system including one battery is less than six years? In reality the payback time for the second battery is only two to three years because the system pays for it.
Thanks John for the great feedback, and also the detailed comments. I don't have an EV or a heat pump yet, but if I did, I'd likely want to factor in the fossil fuels that are not being consumed as a result. This would make for a slightly complicated spreadsheet, I guess...
I enter a several numbers from my electricity bill into a spreadsheet every month and do some simple calcs in Excel and graph how things are going. I love my solar panels !! My power bill was about $60-70 AUD per month. After installation of my solar panels, my power bills have turned into credits, and I now get free electricity and make around $110 AUD per month tax free on the excess electricity I export to the grid - a whopping 25% Return on Investment (ROI). It's like having a piggy bank on my roof. Now looking to add more solar panels, and some kind of storage (pumped hydro or batteries), to try and export the maximum I am allowed 5 kW for 24/7.
I’ve just had a 15 kW solar system fitted. With a 12 kW inverter. We have a heat pump and I am estimating we will use half of the electricity for ourselves and export half of it so from what I can tell we will be getting paid just as much as we were paying out for electricity in the past..
For reference, I just got 7.8kW of solar fitted with 10.5 kWhr batteries and it was £10k. Of course my Northern Irish weather might delay break even but still worth it
@@GaryDoesSolar kinda. I'm going to return the batteries. They are a weird type. LiFePO4 but 15 cells not 16, as far as I can tell. That makes them incompatible with every other LiFePO4 48v battery I'm aware of, since they are all 16. I've just found the fogstar ones which are 15kWh for the same price I paid for 10, so I'm going to get those instead.
Clear, concise and to the point, as always. One thing I wanted to ask was that although you did address maintenance cost, what about the warranty period of the equipment which in case of batteries seems to be 10-12 years. If the battery packs up right after the warranty period then IMO it would have a negative impact on the break even point/ savings, considering battery remains the most expensive part of the solar installation. Thanks
Nice video Gary. New subscriber here (word of mouth from a friend). Thank you for your shared information on this pernicious subject. It becomes pernicious when and if you acquire a solar system, EV, and heat pump. I suggest full investment in that transition. Here where I live there are governmental tax and purchase benefits right from the start. If one decides to go full investment to this transition may need to get a credit. Some banks provide special lending for sustainable energy programs with low-interest rates, promoted by the government. If this is the case I would consider packing the full results over time with the investment in the transition (solar, EV, heat pump) on one side contrasting with fossil fuels, repairs, maintenance, electricity, and traditional heating, on the other side.
Installed a 6.2kWp Solaredge/Jinko solar system mid Nov 2023 added a Hydrotherm x8 heat pump end of Dec located NSW just south of Sydney.Once all this settled down we are now in credit, was almost instantly really Dec bill $12.00AU last 3 months in credit average $5.00. prior install bills Average $175.00pm.This is a reduction of 57.2% of kwh, this is primarily through the heat pump and being retired and able to watch our self consumption do not need a battery as the cost of what we get off the grid is mainly offset from our exports to grid @ 1st 14kwh 16c then 07c thereafter, Ave kWh to grid 20 a day.Ave impots 3.4kWh Day @ 0.38445c.This is looking likely to change now as we head into winter however i wont be changing anything to try and reduce a few cents unless there is a lot more clarity in where its all heading.
I have a similar spreadsheet. Trouble is you don't have to have solar to be on Octopus Agile, so you could benefit from lower rates than a standard tariff, thus seriously affecting the presumed payback period. However because we do have solar we are invested in understanding and researching the energy market. Almost definitely I would be on the standard tariff without solar however that could well be a mistake for many.
@@GaryDoesSolar agreed, although most people would probably be able to minimize their use during the peak period, and the Agile rates outside that are usually way lower than the fixed or "flexible" rates. But I agree that Agile comes into its own once you factor in solar/battery. The best return is when Octopus' run their saving sessions - charge the battery on the cheap, then discharge for the duration of the savings session, and they pay you the saving session reward for whatever you have exported. I made over £3 for one of these sessions on a single day...
Thanks, Gary. That's really useful. I have been struggling up to now with how to represent savings and earnings from my system. Now, it will get sorted 👍
Nice. Ive just started tracking mine but yours seems simpler so ill run the two in parallel for a while and see which i prefer. It will still need some adjustments though. One thing that is different between my set up and yours is that i have an EV. This means that some of my non EV usage was already subject to lower off peak rates so what im currently doing is estimating what my cost would have been. This comes down to, i was using aprox 60% off peak household now its 99% off peak so I have to do a back calculation to work out what my bill would have been on my EV tariff rather than just referring to a standard fixed tariff. This also means i need to split out my EV usage which has to be done manually as though i do have givenergy i dont have a GE charger and my system isnt set up so it sees the EV usage as a seperate category. I can get it from the charger though. So ill have a play with your spreadsheet and maybe pu an EV column in to let me do the back adjustment easier.
Cheers Joe - I'd love to hear how you get on with the comparison. Now, you're right about the EV and how to handle that. I'm of the mind that it should be kept as separate as possible, but I need to think about it more...
Garry, what many people forget to factor in is that the cost saving created by solar is tax/VAT free. So the saving is more significant because the taxed funds you would normally expended for power is now available for other purposes.
in some ways those money are comming out of the pockets of the poor that cant afford free electricity.. im not sure this makes us more rich as a community
Wow a VAT on electricity well make sure obviously to include that in any calculations yes whatever comes out of your bank account in a given time period based upon expected electricity rates plus obviously tax implications which can be complicated in the USA and elsewhere for a given situation
@@Hansen710in other ways the stimulated demand that removal of VAT creates in the economy gives the poor an opportunity to take a job or start a business to supply that demand, which puts money right back into their pocket - if they are willing and able.
last year i got a 2013 chevy volt. i think they are more commin in the uk under the ampera brand. the return on investment time is around 2.3 years, which is pretty ridiculous. it has zero of the downsides of an EV, and ive already put 25k miles on it, many from my partner who drives it to work now too. it is really hard to justify an EV, especially with the depreciation cost factored in. the car has basically lost no value since i bought it, and i was crazy enough to recently put a low voltage solar system on its roof to give it more range. will upgrade the low voltage battery soon to a 3.5kwh lifepo4 12v battery lol. its a fun easy way to get into these things without any compromise.
I am currently energy + meaning my usage + export covers my Electricity and Gas payments for the year and I have surplus profit from the electricity that reduces my installation costs. I have further savings by replacing my Gas Hob to an Induction Hob which has cut my Gas bill in half.
Hi Kent, that's great! We switched from a gas to an electric hob a couple of years ago and haven't looked back since. Easy to use and clean. And of course, can be powered by solar and battery most of the time! :-)
@@GaryDoesSolar I still have it as a backup and of course it is better than using a hob in certain circumstances but there is a massive difference in how much gas i've used and I would recommend having both options.
Another great video and perfectly timed speaking personally. I've actually made a similar forecast model spreadsheet and will share it with you, I hope it can be of some help to the community!
Hi Rahul, thank you for your very kind words. I would love to see your spreadsheet and make it available to the community. Please feel free to email me@GaryDoesSolar.com - thank you!
Great content! One point to add is that I think a cost factor missing from this is the extra home insurance premium for the installation? It might be small I'm not sure, but it will affect payback period wouldn't it?
Thanks and yes, any additional costs should be added as part of the investment. When I asked my own home insurance company about any increase in premiums,they said there were none 👍🏻
Brilliant video Gary. Can you confirm what happens in the "C.Harris" version of the spreadsheet when extra capital expenditure is added to a later month. I think Linest needs a tweak as the crosshairs go wild.
I've had solar and battery system for 2 years now and an EV 18 months and once you add the EV in it gets a bit more complicated to work out ROI but one thing I do know is my original estimate 8 to 10 years is looking more like 5 to 6 if the tariffs stay as they are
im looking at a ROI in about a year and that incl. my crypto miners (that cost the same as my 16kw hybrid system).. adding some kaspa krypto miners for example can make the ROI many times faster... they also heat my house for free, its a win win i have a income of about 15000-30000€ a year on my solar and miners lots of ways to turn electricity into a product that is worth many times more then what the grid gives people... after all many companys makes money from using electricity getting stuff like heat as a waste product is also worth alot these days im not adding those savings, i easy use 2000€ to heat without my miners in a year
Hi Gary, Thanks for the video and the spreadsheets, I have been recording my FusionSolar App data and Octopus data in a spreadsheet since August last year and was then going to look at how to progress. If you replace the NA() in the formula in your spreadsheet with " " , the row with calculations in will be blank, until data is entered in the other cells. [=IF(ISBLANK(D16), " ", E15+C16+D16)]. I used this method when producing spreadsheets many years ago. Again many thanks for the videos.
You're very welcome, Graham. Funny you should mention about the NA() and " ". I originally had the latter, but then the chart flatlined where there was no data. Did you see the same?
Great video and explanation, love your videos. Have you accounted for export, or have I missed that? If it’s based on your bills some months would be minus?
Thanks for the really great feedback. Now export is included as it's already accounted for in the bill payments you enter in column D. If you look at my own data towards the end of the video you'll see some of the entries in that column are negative (meaning export > import than month).
hey Gary, can you make a video related to homebatterys and the different methodes like 48volt and the high voltage batterys (BYD) and such? iam trying to learn the practical differences and the costs.. its so hard matery. have a great weekend!
I have to be quite strict with myself on what topics I cover. I don't have a lot of free time so I try and concentrate on the topics with widest appeal... Did you try searching for 48volt batteries on TH-cam?
@@GaryDoesSolar no problem m8, yeh iam even into solar myself but my job didnt start yet with battery installation but very interesting to learn all about it at least to give some good advice and answers to the customers.
Hi Gary, do you have a similar spreadsheet with Battery only assuming daily usage is drawing from the battery and the battery charging overnight cheap rate UK rates? Cheers
I use estimates from the octopus app because they bill me at stupid dates instead of calendar months. Should be good enough, right? I also ignore standing charges as they come out the same on both sides of the equation. Do you put your savings sessions income into the bill column? Only 4 months in now, but my biggest savings are the actual load we were only aware off since we got solar and monitoring everything. (Immersion heater)
Hi Lars, yeah, I think using estimates from the Octopus app would be ok, as will be omitting standing charges because essentially all they do is add height to both the green and red lines - they'll still cross at the time month/year. Yes, any income from saving sessions should go into the billing column. Great news about your savings progress so far!
Excellent idea Gary - question though, what data do you use each month for the standard import and standing charge? UK average from Ofgem? i.e. where do you get these figures from? - thanks
Thanks 😀 For the video, I just looked at recent price cap data from Ofgem. There might be data here though for further back? energy-stats.uk/download-historical-pricing-data/
I've just invested 5k on a 6kw array, 6kw hybrid inverter and a 7.5kwh x 51.2v lithium battery. I did most of the omstallation myself, (leaving the electrics to a qualified solar engineer) So the above cost me a lot less than 7k. Payback is on approx 4 years.
I'm in it for the environment, but also for the green. With a 6kWH battery and 6kWH array. Can you tell me whether it's better to charge in the early hours and sell it back (Octopus Flux) or just self-consume? We shoudl be generating about 80% of our energy needs in daylight. 400W at other times.
What you get paid back vs what you are charged means it’s more likely to be better to consume the battery, this is one of the mains reasons for having a battery. You may also be able to buy cheaper off-peak electricity to charge your battery and use the battery during the day for those dark winter months.
I've just finished putting my figures into the spreadsheet. We are just about at our first anniversary, well, we will be in 9 days time to be precise. I was expecting to see a reduction in electricity usage through the summer, but I'm seeing the opposite. For example, May 2023 our consumption was 461.58kwh - PV = 429.68 and the grid = 31.9. Where as November 2023 our consumption was just 338.44kwh - PV was 141.64 and the grid was 196.8. It took a few minutes, then I realised that right through the summer, I was using the immersion heater to heat the water and not the gas boiler. Where as, in the winter, with less solar generation, I was using the boiler more and only using the immersion when we had a surplus or an Agile plunge price. Now this has to effect my break even point, but I'm still trying to get my head around to what degree.
Oh my goodness! I bet your heart sank when you saw that immersion switch on (I know, I've been there myself!) Now, it might not affect things as much as you might think (maybe a 10-20% shift). What tariff are you on, and what sized battery?
@@GaryDoesSolarI've been on Octopus Agile for about 6 months now - I watched the video and thought, 'Yes, I'm brave enough.' Currently, I've got 5 Pylon US2000's giving me a total of 12Kwh of which I've lost 2% over the year. After reviewing my log, my installer is suggesting increasing this to 16.8Kwh with 2 more batteries. It was more the fact that when Agile is free or negative, I've been force charging and also heating my water which will result in a lower gas usage which I'm not taking into account in the spreadsheet. But you think this may be negligible?
@@shaungilks8136 That's the great thing about a Pylontech array - you can just keep on adding to it - and pricing each time continues to fall 😃 It's hard for me to comment about the impact of your water heating impact...
Another top video Gary, great stuff! I am quite new to solar and Octopus energy so I just wanted to clarify the 2nd column, does it take into account the income? Taking my first full month March and rather than looking at the Octopus bills(as they go into Feb/Mar and Mar/April), I am looking at the GivEnergy reports: estimated import costs were £43.80 but my income from export was estimated to be £55.80, does this mean I input a negative number? I have checked a date range from one of my octopus bills in March to the exact date range in my GivEnergy portal and the estimated cost pretty much ties in with the actual costs in my octopus bill. Many thanks, Ian
Thanks Ian, and yes, column 2 does take that into account - you just enter the total of any and all import and export for the given month. See my own data near the end of the video, where I have entered negative numbers for some months given all the export I had...
Great video, thank you. But the spreadsheet would even better if we can consider the upfront cost might generate a proper amount of interest / investment return, say 4% to 5%? That can be more accurate.
You're very welcome. Now, you make a good point, but this video is really about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'd be happy though for anyone who wants to enhance the spreadsheet, and I'll post any enhancements to it here: garydoessolar.com/payback_spreadsheets/
Hi Gary, I have collected data since install. The setup is a bit more complicated because of Heat Pump and EV. How/where can I find out (in the GivEnergy Portal) the real "Home Usage" data without including the KWh that goes into the battery every night? In other words, the "Without Solar - Home Usage" should be, in my case, ASHP + EV + House Load rather than ASHP + EV + House Load + Battery.
What I did was generate a report between two dates (the report option is near the bottom of the menu on the lefthand side. Then, when the report is ready, just scroll down to the section that I showed in the video. Message me if any issues...
Great video and nice simple spread sheet. The actual energy costs in the "With Solar" section. Do you have to add the standing charge into that figure or it it just the usage costs?
This could be handled with a couple of extra columns in the spreadsheet perhaps (turning the import rate column into peak, off-peak and percentage split. I don't have time to do this myself, but if anyone facies doing this, I'll add their work here: garydoessolar.com/payback_spreadsheets/
Gary I was told by my supplier that I should stick with octopus cozy instead of moving to octopus flux. And get the fixed 15p for any electricity I export. Could you do a video comparing both strategies, thanks.
A word of warning, I installed solar and battery storage in November last year and am really pleased with how it’s going, but last month I had a energy performance certificate (EPC) done on my property, unfortunately because of my solar install (5kw) the property was given a E rating when before the installation it would have been a D rating. Because of the E rating I am unable to apply for a insulation grant via the “Great British Insulation Scheme” for under floor insulation and so has denied me access to around £3000. So my advice get your (EPC) done before installing solar. In affect this has put an extra £3000 to my installation costs.
Hi Paul, thanks for sharing this. I really don't understand your EPC rating. We recently had to get this done because we're looking at getting a heat pump. We got a straight "A" - specifically BECAUSE of the solar panels. Might be worth getting a second opinion?
Many thanks Gary for getting back, yes I think I will get another opinion. I did think about appealing to the company that did the survey but I very much doubt that they would overturn one of their employees decision.
I'm in a renewables group on Facebook and there have been a lot of posts and comments recently about how other energy providers are surpassing Octopus in rates, particularly for export. There have also been a large number of complaints about still waiting for Octopus to install a smart meter with many having waited in the region of 1-2 years already.
I was waiting for a smart meter but when I messaged them on X they responded immediately and fitted the smart meter within 2 weeks, they are quite responsive on social media. 👍
I'll give you a counter to that - I moved to Octopus from EDF in mid March. I applied for smart meters as soon as my account was created. A few days later I was given dates to choose from for the meters to be fitted. This was a week before Easter so I chose the Tuesday morning after the bank holiday. Chap fitted them by 12pm and gave me a Home Mini rather than an IHD. I watched the feed for a few days and decided to move the Gas to Tracker. Applied on-line late in the afternoon on Monday this week, was sent an e-mail saying it was done on the Tuesday afternoon. I really can't complain about Octopus.
thanks for this Gary. Wondering if you did an episode regarding feed in tariff eligibility as I was told that FIT no longer exists and can only be claimed by existing customers if they upgrade.
You're most welcome. Now, I chose not to cover the FiT scheme as it was UK-only and now (as you say) discontinued. Those already on the scheme are enjoying lucrative benefits (great) but it's not open to anyone else. The scheme did its job though - it raised awareness to sustainable living with solar panels - pretty good result!
One thing to mention is that most households consume less than 4000 kWh per annum, the approximate usage level at which batteries start to make economic sense. Removing a battery from the equation will reduce the payback period for net exporter households.
@@GaryDoesSolar Indeed. That said, the main drivers of the return on investment for PV have always been primary household annual consumption, cost of components, followed by import and export tariffs. When you remove £3K of batteries (a rough minimum these days), a < 4k kWh p.a. consumption household experiences a ~2 year quicker break even point, more so if they have a West facing aspect to take advantage of Flux's peak export window, as your collab video data highlights.
Hello, quick question question. I have 14KVA solar system, newly installed, with 10KVA inverter. Now spring is here it’s starting to clip a lot. I plan to get a battery, I take it, it will be best to put on the DC side of the inverter to cut down on clipping. Am I correct?
Unfortunately, l'm not in a position to provide individual advice (not least because of potential liability issues, even if that advice is given free - such is the world today). You're best to speak to an installer for such advice, or post a comment onto a solar forum (e.g. this one in the UK: facebook.com/groups/2197329430289466). Good luck!
Gary, just to clarify, do you minus the exported payment off your monthly bill. so if I paid £16.74 for electric from the grid and I received £28.46 for exported, would that month be minus (-£11.72)? If not how do you take in account the exported credit? Thanks from a confused oldie :-))
Hi John, this could be handled with a couple of extra columns in the spreadsheet perhaps (turning the import rate column into peak, off-peak and percentage split. I don't have time to do this myself, but if anyone facies doing this, I'll add their work here: garydoessolar.com/payback_spreadsheets/
So, what we’re talking about here is asset value. Your solar and battery installation is also a depreciating asset as well as a revenue generator - very good point! 👍🏻
You are aware there is a glut of solar panels China is shutting some factories down. It would mean lower prices for consumers. Just a matter of time it gets passed down. Difficult to time your install right though do you wait for prices to drop and install or go for it start your journey on solar energy. Also Gary does the generation meter and app results the same or near enough? Just asking as mine inverter is showing huge difference.
You're not wrong about solar panel prices - I'll be doing a video on the shortly. Prices are coming down like gravity! Regarding your generation question, what equipment do you have and what app are using?
Ah, I don’t know much about that battery, unfortunately. Might be worth asking a question of a solar forum like this one: facebook.com/groups/2197329430289466
Cost of capital - is that accounted for? If you have the £20k to spend you could have invested that in something else. Or if you had to borrow the money you have to account for the interest paid somehow.
The investing the 20k into something else would have to earn enough to pay for the energy bill, the odds of buying shares or anything else for 20k and it pay 2k dividends a year is very unlikely, and then you have the benifit of it actually adding value to your property so if you where to sell your property you probably won't get the full 20k that you initial invested but you will get something back, I say probably as in a previous house we lived in I had installed a 13k solar system, got the benifits from it for 3 years and actually got the money back plus extra after property sold as the buyer was willing to pay extra as we showed a years worth of electricity bills and how cheap they where and that extra covered the initial installation costs before any goverment incentives. But I do agree with the point about financing for a solar system as the interest or "account keeping fees" that some institutions charge can really add up
@@J-P88 you can make money on electricity in many ways. companys all over the world do that in many many ways... i agree shares is not the way to go.. but if you convert the power the system makes (or the grid makes) into more money then the day price.. it can never go wrong... im producing many times more money from my crypto miners, then the grid gives ..(+ free heat) worse case scenario i heat my house for free with them, but that is only if the whole world crashes.. i still make money if the prices for what i make drops over 500% right now im looking at a ROI in under a year for both solar batteries and crypto miners.. and i dont pay a heat bill in scandinavia money is the best form of battery.. i rather have a stuffed wallet, then a full battery im looking at a income of 15.000-30.000 € per year on my 16kw system
@@Goodkiwibloke true, that's if it is bought through finance,, and even then it's all about shopping around for best deals and what works for each individual if that's the path one has to take.
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@tristramsnowdon5256 But did you do just that a year ago then? Of course you didn’t - because you could not be sure the price of gold would rise. Get real please… The returns on a solar installation, whilst they may not be as high as other investments, are all but guaranteed.
Obviously a battery offsetting high evening electricity prices makes payback potentially sooner/probably better even if your excess solar production can’t be sold to grid!🔋🌞🗽
The reality is that with octopus tracker the average elec price is around 19p/kwh over winter and much lower in spring/summer so comparing solar+flux to standard tariff isn't really fair. Financing £20K isn't free either - even the loss of savings interest would be up to £1000 pa - thats an ongoing cost until savings repay it.
I guess the problem is that most people in the country who don't have solar don't even know about the daily tracker tariffs... I'm targeting that audience too. I'm going to write a note about the financing...
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@@GaryDoesSolar Yeah so 4% interest rate, risk free (which is what most UK banks are offering at the moment) on £20,000 is £800 a year. So £2346 saving should actually be £1546, so estimated payback after 13 years, instead of the 8.5 years? To be fair, this does assume that the 4% will be around for the next decade which is certainly not guaranteed, so I can see it is still technically a risk.
Interesting (and very easy to understand) video. But I'm not sure you've captured one of the most important aspects of buying solar... If you hadn't spent your £10K on solar, you could have placed it in a cash ISA or savings account and used the interest to pay off some of your (non-solar) electricity bills each year. Using simple figures as you did, maybe that interest could reduce your pink "without solar" cumulative costs by about £400 a year. You might like to try that on your spreadsheet and see where the break-even point moves to... It could possibly move so far to the right that you'd need to replace the inverter and battery before you've even actually reached break-even... I'd be interested to hear from you what happens if you reduce the pink "cumulative electricity cost" by, say, £30 a month... Perhaps you can try that and reply to this comment with a quick note to say what the payback period moves to - I'd love to see! Meantime, do keep on with your informative and well-presented videos - they're a great watch...
Good points, Derek, and thanks for your kind words. This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@@GaryDoesSolar I quite agree with your need to keep things simple. So what follows is a PS, rather than a new comment... You said you'd leave the more complex analysis to others, so I've stepped into the breach and done a quick lash-up. Usually my Mac will read Excel spreadsheets, but I lost all the formulae in yours - the NA function was the issue. I put the formulae back in, and duplicated your first year's "example" figures into subsequent years. I reckon the break even point is Jan 28 (8 years). Then I surmised that if I had put the £10K installation cost into a cash ISA instead of buying solar, (moved to the pink column) I could generate about £33 a month in interest, which would reduce my non-solar electricity bill. I reckon the break-even point moved to almost 12 years. For people like myself - semi-retired - my installation cost has had to come from money put aside for monthly bills, so I do need to realise that my "true" breakeven point is quite a long way away, moreso because it takes the inverter and battery outside their warranty period. My "model" (to be fair) is overly simplified - it takes no account of inflation, which would mean my £33 a month reduced the non-solar bill by less and less, whereas a solar PV system is essentially inflation-proof and tax-free - can't get better than that!. In fact inflation-proofing my energy bills was a big point for me. Am I disappointed that my true breakeven point is so far in the future? Well no, because of something else one simply can't model.... We've moved to a village with underground mains supply, but the mains reaches the village on overhead wooden poles. In the most recent 12 months we have had 6 power cuts - 2 for maintenance and 4 for repairs. Although I'm semi-retired, my remaining work is teaching via video, so a power cut is a real emb*ggerance. But now my system switches over when there's a power-cut and everything in the house stays running. That's as valuable as inflation-proof energy bills! Thanks again for tackling an important consideration in the purchase of solar - may all your days be sunny ones!
@@DerekHasted Thanks very much for taking the time to do this, Derek. Very helpful to others 👍 And great to hear your system has made life a lot easier for you now, when there's a power cut.
Let's not kid ourselves about the costs without solar. Would we have been buying electricity at the standard rate or would we have used a smart tariff like Ocopus Agile or Tracker?
i watched a video recently by one of the big solar youtubers. it was titled 10 reason solar might not be for you. one of the reasons was if you didnt qualify or the federal 30% rebate. my response was if you need a tax rebate to make soar possible, then the federal govt shouldnt be pushing solar as a solution since its obviously not. a tax rebate is really nice, but the program would be a failure if its necessary. its not necessary, solar can pay its own way, the rebate just makes payoff sooner.
Tax rebates and other subsidies are necessary for starting up an industry. Few industries are self sustaining in their infancy. Once the industry “gets good”, the rebates can ease off. And then it becomes a tax revenue generator. Solar has been without subsidies in the uk for about 5 years now. One major advantage we have over the USA is a lack of local authority permitting paperwork. That’s a lot of cost saved. The only matters of paperwork that exist are with the electricity distribution companies for inverters connected to the grid that are bigger than 16Amps per phase. Even then the paperwork is generally free to submit.
Anthony provides great insight on your comment, Scott. I'd only add that the technology (solar panels, inverters, batteries) is getting cheaper all the time, which means more people and players will enter the market, which again will push prices down further. A virtuous cycle...
I'm still not convinced that solar panels can EVER be a viable investment in today's climate. I have 8 x 395 JA solar panels. Over 12 months, they generate 2,500 kWh. If you export all of this & 'value' it at the current Octopus variable rate of 25p/kWh, the panels are 'worth' £625/year. Whilst the panels & the associated gubbins might be relatively cheap, the cost to put everything on my roof & in the loft came to £8,750 (actually cheap by today's standards). So straight away you're looking at a best case payback of 14 years. However if you, more realistically, value the power at 20p (half way between the Flux Export peak-rate & standard rate), then your 2,500 kWh is only worth £500/year & now you're looking at 17.5 years JUST TO BREAK-EVEN!! When the energy crisis bit, I was using 2,390 kWh/year of leccy at 34p/kWh. Today, after economising, I use 2,150 kWh/year & the 'non-solar', variable rate price is 25p/kWh. Every time, the price drops or you get yourself an air fryer, it undermines the economic case for installing domestic solar panels. Likewise every time someone connects a new large scale wind/solar farm to the grid, it undermines the environmental case for domestic solar. And finally, it's worth pointing out that had I put my £8,750 into an ISA, at say 4.5%, it would generate an income of £394/year...a number not too far off the savings you get with solar. IMO, people need to think long & hard before they part with their cash for a solar system, it's not necessarily the money spinner the incessant ads on TH-cam make it out to be...
You're right - and it's actually the reason I started this channel - to help people really understand what they were getting into (including financially) before taking the leap...
I actually think we can go one step even further than this… right now in the UK (Hampshire) the sun is out strong and the array is already clipping, with export is maxed out at the permitted 7.8kW… I already receive a credit each month despite consuming well in excess of 1 MWh each month… so I find myself thinking what else can I do to actually use MORE power. Now remember quality of life in countries does tend to correlate with energy usage per capita, so can we make this extra/cheap energy work for us as a whole?
I honestly think that in time, energy will be near-zero pretty much all the time. Imagine what that does in enabling national economies - all of that energy cost taken out of the bottom lines.... golly!
No, it is not just you. My hosting provider seems to be having a problem at the moment. I cannot upload the spreadsheet. Hopefully this will be resolved later today.
I've provided my version of the spreadsheet Firstly I think it's unfair to compare the non solar case using the Standard tariff. Your spread sheet with flexible or standard tariff returns your investment in 7.65 years However if you replace that with the Octopus tracker tariff which I am on, getting about 17p on average, the payback becomes 13.24 years BUT we are not comparing like with like - we are assuming that the user Just invests in 'Solar' I propose a position (which I have done) where I invest in not having solar which involves putting the £10000 into a bank account which have called SOLAR. I then use the interest (around £41 per month at 4% interest). When we do this it brings the payback to about 25 years. I've created a column Y which pays me money much like the solar panels apparently would do and I use this money to reduce the value of column J I'd be interested in your response yes, I know your spreadsheet is to work out your return on investment in solar..... I think it needs to treat the comparison with an investment in "none solar"
Thanks for sending me your spreadsheet. I would say it’s not a forgone conclusion that those without solar would be on a tracker tariff. Most of the population is on a fixed standard rate (and may not want the uncertainty of a tracker tariff). Also, as we’re looking at a long term payback period, there are no guarantees as to what will happen with tracker rates. I agree however, for those that would want to compare against that, your spreadsheet is useful. Are you happy for me to upload it onto the website so that others can try it?
@@GaryDoesSolar Gary Agree with your tracker tariff assertion. But there is little certainty in life at all :-) For us octopus compare now says that Agile is better for us! I suppose also there's a median position of buying just a battery and using Octopus Go that would really bring down the cost per KWh. But the battery would require buying I suppose my general point is that if someone, for instance myself, is doing a real comparison. They would have specified the solar system very carefully. Hopefully they would also think about getting a better deal on electric tariff than just the standard. So the right hand side of the spreadsheet [none solar] should be treated to be as good an "investment" as it could be also. I'm more than happy for you to upload it. There is an issue the interest per month column Y is strictly not correct...I just divided the annual interest by 12. I was very surprised at the outcome doing it this way try 5%
This is very interesting - but you are forgetting the interest your £20,000 would be making if it were in a savings account. I'd say you haven't accrued between £920 and £1200 in a savings account (tax-free if in an ISA). If you were borrowing the money you would be paying interest on it and that would be included in the cost, perhaps the 'loss' of not having the money saved should be too? But I don't look at the money I'm spending as trying to get a 'payback' - £14k - but as a better way to 'invest'. I think with my simple maths I should be making a touch more money every year with it than a savings account would be giving me. Then, given the difference between my actual bill and the without solar bill should be a positive every year so I'm 'paid back' already. Does that make sense? 🤷♂
That was my brothers argument but it was easy to show that the amount you are saving on energy far outstrips the return on investment given the current energy crisis.
What you have also missed is Solar panels usually add value to a property, hypothetically you install a 14k solar system to your house, live in the house for X amount of years, get the benifits from Solar and then sell the house you will get some of that initial investment back, IF lucky like we where, the buyer actually ended up offering extra on the house once we showed how low our electricity bills had been for 3 years so much so that it covered the initial Solar installation cost. And you pay your electricity bill but all you have to show for it is the paper or the email the bill was sent on.
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
2 quick comments and this observation. Isn't it irrelevant what your pay back is or isn't when you have already got a system. Surely it's more important if it's worth it in the first place. I want a spreadsheet to tell me mine calculating if its worth it is wrong. IMHO one glaring omission you have not allowed in the do nothing columns for the amount of money you would get back per month/ year if you were to invest the money and don't install solar. A standard tariff is the very worst option if you haven't fallen into the solar trap. I've chosen the tracker tariff and may go back to Agile. I use about 10 KWh per day. On tracker this works out to about £700 per year. If I install solar and battery at £10000 install cost for an array predicted to return 3600 KWh per year. It's clear to me that a return is impossible in 10 years. It's more like 15 or more likely 20 years because a KWh off the roof is more expensive than an exported KWh would give me. Am I wrong...if so where??
I use a similar amount of electricity to you. I don't know where you're getting your predicted output from but my 6.1kWh East facing system generates about 6300 kWh/year. It cost less than £7500 in summer 2021, and includes 4.8kWh battery storage. I agree that an adjustment for investing the money should be added. This can be done by adding the investment return that has been lost to the monthly running costs in the spreadsheet. The estimated payback period provided by my installer was around 13 years, but with the price of electricity almost doubling since then, the payback period by my calculations will be around 8 years.
I can understand where you're coming from with thinking not to include the cost of the system in your payback. It is relevant to include because the idea of the spreadsheet is to see how much money you can save in the long run, and the cost of the system is a part of that equation and therefore must be included, even if you have written off the cost as irrelevant. As for investing the money... I think you're missing the point. Yes, you can absolutely invest the money that you would have spend on the solar installation instead, but that money would then be completely divorced from the problem. The question is essentailly "If I spend £X on a solar instillation, when will I have made my money back?" and not "Does installing solar make me the most money?".
@@Blocksetter63 I'm treating it as an investment therefore I have to compare it to a different investment. ie compound interest. I need a return in 10 years.... I'm 77 won't be in this house in 10 years. We're Southern Scotland that was the average output, well a little above average, of 4 quotes. My average quote was £11500 from memory. Not worth exporting far too little return. It's not worth the hassle though I'd love a system son that I can tell everyone I didn't need to pay for electricity this month I got it free from the roof. 🤣😔
@@varnect203 You either borrow the money in which case it's cost you more for the system. Or you use your savings in which case you would keep saving if you didn't go solar. Gary has also missed possible maintenance. Mine's a slate roof. We needed to replace a slate last year, I forget the cost maybe £200 . I asked the roofer what happens if a slate under PV panels needed to be replaced... Scaffolding, remove panel, replace slates, refit panels. £1500 to £2000
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@@GaryDoesSolar I need to get on a PC to do this properly. It may be a few days as we are away from home. I absolutely hate Google sheets on a mobile phone 🙃
Great video but your calculations are based on daily consumption and doesn't take into account consumption split between peak and off peak periods eg for people on Octopus GO or Intelligent Octopus GO tariffs . I'm on the latter and consume a lot overnight eg car charging, washing machine, tumble dryer, battery charging. The Givenergy reports do not give this breakdown. You only get hourly consumption for a specific day not a range of days so to find out for example how much you consumed overnight during a month you have to produce 31 daily reports and add up all the overnight consumption figures up to get an accurate total. Alternatively you have to take an estimate eg 70% consumption overnight and apply that to get an estimated overnight consumption figure. Also , I spent £11.6k a year ago on my solar install. To fund that I used a maturing Cash ISA which I would have normally reinvested. Had I done that instead at 5.1 % I would have earned just under £600 last year so that would need to be considered. I saved £1440 last year giving a 8 Yr payback BUT if i take off the £600 i would have earned in interest that 8yrs increases to 13.8 years which is significantly longer!
Hi Jim, I think the spreadsheet does take that all into account, because you're entering the results of all that in terms of the (lower) bills you're paying. Quite a few have mentioned about investing with an ISA/fund instead. I'm going to write a note about that...
@@GaryDoesSolar Surely the "what you would have paid" figure needs to take into account overnight consumption x overnight tariff plus daily consumption x daily tariff? This is the "what you would have paid" calculation not what you actually paid. The difficulty is that if I hadn't installed Solar I wouldn't be charging battery overnight only the EV car, washing machine and tumble dryer so overnight consumption would be overstated (but I could subtract 5 kwh from each overnight figure as I charge fully overnight
The spreadsheet is really for those who have an installation now but were on a standard tariff before. For those who were already on some kind of smart tariff, the spreadsheet could be modified to suit (perhaps some will do that and send to me) but my videos are always aiming for the widest appeal.
@@GaryDoesSolar That would be interesting to see your thoughts. I have updated my own spreadsheet to take into account the 'loss' of interest by using capital to invest in Solar rather than for example continually re-investing in a simple Cash ISA. Based on the last 12 months figures (I installed at the end of March 2023) the data is telling me my payback is estimated at 7.7 years which is a lot better than my initial supplier proposal which suggested o payback of 9.5 years. HOWEVER I have effectively lost interest by not renewing my Cash ISA as the money to fund the installation was taken out of a maturing ISA so although it looks like I 'saved' c £1500 last year I didnt really as I could have made £580 in interest tax free ie I really only 'made' net £920. This reduction in estimated savings, which is significant, has a big impact on my payback period increasing it from 7.7 years to 12.6 years. I havent worried about compound interest, just considered simple interest ie removing the annual interest each year and leaving the principal amount (ie what I invested) in the ISA. I'm not actually that bothered tbh about length of payback as I consider the investment a sunk cost. Nobody worries about payback when they splash out on a new car, double glazing , a house extension or kitchen do they (although potentially an extension can increase the value of your house)!
Once the investment is made it will generate what it will. You may change habits due to it, or may have been more frugal without it. As such calculating a payback time after the event is pointless. Find something better to do with your time.
Judging by the feedback to the video I've received so far, many people do wish to track things... Personally, I think it's a prudent thing to do (for any investment).
@@GaryDoesSolar it is prudent to do for any investment where you can adjust the factors. In this the only thing to do is optimise the benefit you have, manipulate your use and batteries to optimise your return. To truly calculate your ROI you would have to look at where the money would have been otherwise, the interest rates compounded or if the money was in a shares ISA then how the value of that changed including any dividends that would have been paid. Without doing that any returns measured are meaningless. It is worth looking at the expected return before purchase and along with the environmental factors decide if this is where you want your money to go. However, once installed it will do whatever it is going to do.
@@stephenrussell6074An ROI for a particular investment has nothing to do with an ROI of a different investment. It’s simply the return on that particular investment. My video was never about comparing investments, so I don’t know why you bring it up. That said, as you say, the payback on a solar investment will be what it will be. And my video provides an easy way to calculate such.
@@GaryDoesSolar if you are looking at the point where the solar panels have paid for themselves including additional amounts paid for repairs etc. then you have to consider the money not being spent on the panels at least being in a bank earning interest. In the same way that if you borrowed the money to invest in solar you would include the interest on the loan you had to pay. Likewise if you pulled the money out of an index linked ISA you have to consider the value that would have been if you had not purchased the Solar. Otherwise the so called ROI is not representative of anything. It is certainly not the point at which you begin to reap the rewards of your investment which is how the ROI is intended to work. I expect that everyone who borrows to buy will include the interest they pay as part of the cost. Likewise people who pull from their savings must also include those missed benefits otherwise the loan taker has a true ROI but the cash buyer does not. The reason for looking at it in any way can only be to affirm you made a good decision and it is no good doing that with a flawed end point. The cash buyer will probably have done better than the loan taker unless the loan was taken shortly before interest rates increased a lot. Which would also be impacted by price changes in the industry. My whole point is if you are going to make this calculation then it needs to be representative of the real situation at least the base of that case. Had nothing been done with the money. People who did or did not take a loan should have information that is roughly equivalent.
I think the advice you give on things to do before you buy a Solar generation system and how to use the tariffs and devices to optimise effectiveness are fantastic and a wonderful source of really useful information. However I see this exercise as not just pointless but also amongst the worst form of hubris since the time will reduce at the suffering of others. If Energy prices triple everyone suffers except this payback time drops dramatically whereas if they dropped to one third they may never payback within the life of the equipment.
* NOTES SINCE PUBLICATION *
I completely forgot to add VAT to the computed "without solar" column in the video, but the spreadsheets have been updated now.
For those who are wondering about comparing the payback you would have received if you'd invested the money instead, this video on Tim & Kat's Green Walk channel is a great one to watch: th-cam.com/video/Rukx1X75te0/w-d-xo.htmlsi=nTSbzy2gRxJ1A5vE
Have the spreadsheets been updated yet?
@@davespilbrow Hi Dave, your message reminded me to sort this - now done. Please let me know if it doesn't work as expected 👍
I replaced an oil boiler with a heat pump as part of the same energy 'upgrade' project installing 17 panels and a Powerwall2 in July 2022. Mostly done for environmental reasons but interested in costs obviously. Due to demand we had the panels several months before we got the Powerwall2. We also had a delay getting a smart meter fitted and onto a solar tariff so that was couple of months with no export tarrif. We were initially on the Tesla managed system rate (25p import 25p export) but this was withdrawn at the end of the first year. We are now on Octopus Flux tarriff - which I think will save us more. I've been struggling to estimate a payback period - it does seem to be the first question most people ask when I talk about the system - so I'll play with the spreadsheet!
To support one of your other videos, batteries are brilliant! Before the powerwall was installed we were often pulling from the grid for short periods during mainly sunny days when clouds reduced generation, battery helps smooth this out. We charge every night using cheap rate and then run the off the battery during peak rate. Even during the winter we never got to £1 on peak rate for the entire month! We also get over £100 per month back during the summer months c. £45 more than we use those months. In kWhs - in mid winter months we used roughly 40% during cheap rate vs 60% standard, in the summer it's more 90% cheap rate. It's very driven by the heat pump so its only December and January where we used more standard than off peak units.
For those interested, air sourced heat pump has been very easy to live with, only negative is that when it is very cold (below 0c) the unit is noisy as it's working hard (best not look at the daily kWh... I think we peaked at 80 when it was -9c.) but even then only as nosiy indoors as the old oil boiler....
So, still not sure of my payback period but a very happy owner!
Thanks Steve, for sharing all of this - really useful to help others considering the same kinds of things 👍🏻
Nice one Gary, thanks 🙏 Have a magic Christmas 🎄
Thank you! Hope you and family have a fab Christmas too 😀😀😀
I have had my solar and battery system since November and wanted to do a spreadsheet but kept getting confused. This seems a really good way to track.. thank you!
You're most welcome! Hope it does the business for you :-)
FYI I have installed North and South arrays (both sides of a large quad garage) and the Noth side is running far better than expected delivering an average of around 60% of what my south facing panels give! Far better than I expected.
Sounds great! Which country are you in?
@@GaryDoesSolarI live in the UK, Essex. Interestingly, during the winter months the production was mostly the same on both the N and S facing panels and I assume this is because almost all the light is diffused indirect light due to the constant cloud cover.
@@NacNacMOTT Yes, when it is sunny then the north facing panels don't compare to the south facing ones. However since (in the UK anyway) most days are covered in cloud at some sky level: I find that most of the winter is generating power from indirect sunlight and generating mostly the same for N and S facing. Oh and yes, they are the same so I have 6Kw on both sides. For me, the added cost of the extra panels represented an extra 15-20% cost to the project but will deliver circa 60% more power which I'm most happy with.
@@NacNacMOTT I tend to find that I know more that most installers regardless of the topic mainly because I've researched it to death and I'm up to date on the knowledge. However the installer brings their massive value in how to actually put my paper-plans into reality (and if I'm really lucky they will bring some added value too to my paper plans).
Great video. I have had my installation for almost two years now and have not paid anything since they were installed.
That's brilliant!
Hi Gary
You might recall the spreadsheet I sent you a while ago which analysed the
cost benefit ratio of my proposed installation based on the quote I had at the time (October 2023). I included the number of battery units as well as the solar panels and the offset cost of the same investment in NS&I 1 year bonds which yielded 6.2% at the time as well as depreciation of the system to include replacement costs for the panels (25 years) inverter (10 years) andthe batteries (10 years). The overall message was that the more battery capacity I added the longer the payback and the lower the yield.
Of course the prices and costs are out of date but they can easily be updated to match those for any individual setup.
I don't see how I can attach it here but I have sent it to you again so that you can include a link for others if you think it would be useful.
Mike
Hi Mike, my apologies - I didn't see your comment here until now (sometimes TH-cam gets the notifications wrong). Please feel to email me@GaryDoesSolar.com with the latest version you have and if you're happy for me to, I'll upload it to here: garydoessolar.com/payback_spreadsheets/
Great video as always Gary 👍
Thanks :-) This one was particularly difficult trying to make the spreadsheet screens look a bit slicker than me just manually navigating them!
Thanks for this and sharing your spreadsheet. I’m just going through the early stages of getting solar and battery installed which i hope to have in the comings months, my current estimate for payback is just over 8 years but i’ll be tracking like a true nerd 😅.
Hi Ian - my pleasure and all the best with your solar journey - you'll love every part of it! :-)
Signed up to Octopus using your code. Least I can do after all the great advice you have provided.
Wow - that's so very kind of you - thank you! :-) I think you're going to enjoy using the various tariffs they offer!
Congratulations on your first year Gary! Our installation went live in August last year so I am still enjoying seeing the picture unfold as each month progresses, but so far so good - particularly as the days are getting longer.
I've ended up analysing financial savings under three headings: volume (i.e. importing fewer kWhs from the grid than we consume); price (i.e. paying less for each kWh that we do import because of the ability to charge up the battery on cheaper overnight rates); and export income. Its interesting seeing how the balance between these different savings has shifted over the year, partly down to seasonality and partly down to different strategies around charging the battery.
Hi Michael, thanks for your kind words - I'm not sure if I feel the year went quick or not. I feel it went slow - but actually from what I hear, that's a good thing - when you're occupied with lots of things, the days go quick but the years go slow - I think I'd rather have it that way round! ... alas I digress!
I like the way you carry out the financial analysis!
Another great video. I do something similar in my spreadsheet, but I also include gas (if you have gas installed) into the equation as your gas costs can also reduce as a result of being on a suitable TOU electricity tariff such as Octopus Agile. If you automate when your hot water cylinder is heated and use electricity when its cheaper than gas (or when its free or plunge price), then the overall HW heating costs can further reduce your overall energy costs and further speed up the payback.
Thanks, and this is great advice for people! :-)
Good point re gas. Where I struggle is putting a financial value on the gas saved - which depends on making a 'best guess' as to the real efficiency when using it (which in turn varies with lots of other factors like how heavily loaded the boiler is at any one time). Comparing the solar and gas power needed to heat my hot water cylinder given similar starting conditions the efficiency is approx. 50%, way below the nominal 90+% that a condensing boiler is supposed to have (because of lot of heat is used to heat the boiler itself, and circulating water - which leaks away afterwards).
Any suggestions to refine this value calculation would be appreciated.
Gary! You are the man! For me, your videos have made far more sense than so much of the standard TH-cam fayre. One thing I’d love you to do a video on is just how much should we be paying to get a solar/battery installation. I want to get in now, but really think I should wait until Powerwall 3 and equivalents are available. I’ve been quoted £30K for 20 panels, Enphase microinverters and Powerwall 2.. but I keep watching PW3 videos and it almost seems like a no brainer? I dont want to wait though! Anyway maybe a brave idea for a new video? Well done on all you’ve done so far though. It’s great!
Hi Carl, thanks for your very kind words - it's so great to hear than my videos are well received :-)
Now, on equipment pricing, I tend to stay away from that in my videos because it quickly dates them... but it's worth keeping an eye on social forums like this one, where pricing is discussed all the time: facebook.com/groups/2197329430289466
All the best with whatever you eventually decide upon!
Great video. If you have an EV and home charge this will inevitably be included in your home useage so there does need to be an offset for saved petrol in the spread sheet. Just a column to add what you would have spent each month.
Thanks, and yes, that's a good suggestion!
Also, if you have an EV you aren’t on a standard tariff anymore, so actually your savings might not be as fast. (I did some rough calculations and it added a few years on my payback)
Excellent spreadsheet, thank you.
I'm with E.ON Next, and get paid to export via a cheque (yes, a cheque!) at the end of the year. I found it useful to add columns to work out how much I would be paid monthly, and so the net electricity cost. Otherwise I'd need to do a separate manual calculation to work out the "Actual Electricity Cost", which would be the cost from my bill minus Exported kWh x export rate.
The payback chart is very interesting. My panels were installed in October, so I'm excited to now see my export is much more than my import, so I'm making money each month.
You're most welcome, and great that you've modified the spreadsheet to better suit your situation :-) Yeah, same here on the export vs import!
Thanks for this video (and the rest of your content).
I'm always fascinated to see how others set-up their spreadsheets to track their solar data - I can't believe that I never thought to input the data into a line chart! That now seems such an obvious thing to do but it never occurred to me. I'm not too bothered about payback but if you're keeping a spreadsheet then it's an obvious thing to track against, and a line chart is great for predicting that future date.
I've now done exactly that with my existing spreadsheet. I had my install around the same time as you did so I also got caught in the most expensive time to do it like you did, but during my first year with solar then I was under a fixed contract which limited my options meaning that that year isn't a good predictor for my future numbers. I now have had a couple of months with Octopus on my redesigned spreadsheet to account for the four payback avenues on offer, so I've plotted that developing data on the chart up against the expenditure. I've also added a "Fantasy" guestimate line based on how I expect this full year to develop, which will be an interesting reference point to look back on in the future.
Should the "Fantasy" line prove accurate then I'm looking at payback within 10 years. I also created a second chart where the expenditure figure also accounts for a generous interest rate for those who argue that true payback should factor-in compounding; in that scenario then it's another 7 years or so - still well within the warranty of the panels and the inverter, though the battery will be out of warranty by then.
So those charts will be another fascinating thing for me to track (but not fascinating for anyone else!) in my spreadsheet as the months go by and new data becomes available!
Hi there Jack, that's fab to read about your adventures in monitoring your payback! And really great that my spreadsheet is of some use to you as part of that :-)
Thank you. Good episode, nice & clear.
You're most welcome, and thanks for this great feedback :-)
Very useful indeed 🫡👍. We’re coming up 1 year now with our set up (6.5kwp, and a 6kw battery, 16 panels - 8 @142degSE, 8@320degNW). 1st 8 months was tied to BG (but at 25p/kwh), now with Octopus Intelligent Go as also now have an EV), but had to get main fuse upgrade to 100a, and then Smart Meter etc. Certainly slashed the electric bills, with current sunny days. Looking at 70% or more of our consumption from solar/battery - when sunny or bright with inverter doing its job!
That's brilliant - and will encourage those who are still on the fence!
Great stuff as ever, Gary. I try to keep my battery
Thanks Rob. I like your strategy around avoiding clipping. I should try something similar as I have DC Coupled batteries 👍🏻
Perhaps my latest video will get you thinking again about charging overnight?
Good analysis Gary.
Others may say that the lost interest on the initial solar system investment needs to be accounted for somewhere but IMO with interest rates on savings & ISA's being so low it's hardly worth worrying about.
Battery prices have dropped & no longer attract VAT as a single installed item. Solar panels are less than half what you & I paid in March last year so now is a good time to invest in solar & batteries if you can afford to do so. I've just added 5 extra panels & an extra 9.5kWh battery to my system last week to maximise my system potential savings & export payment options.
Because I never changed my standing order payments to Octopus I've just applied for a £1,200 refund because after 1 year using solar (without & any excess solar payments or saving sessions) my account is in credit. This also includes charging a 64kWh EV every other night or two from 30-80%. I have now changed my tariff to Intelligent Go & set up a payment plan for excess solar as well so the savings going forward should be even better than the initially estimated 8.5 year break even point 🤞 No Heat Pump yet though.
Hey Colin, that was some refund! And great news generally on the savings you're achieving - wow!
if you need to consider the lost initial interest, then you also need to consider the interest you earn from the lowered bills.
@@scottmcshannon6821That’s a really good point and something that should be considered. 🙏👍
I don't think it's insignificant. My purchase last march was funded from a maturing Cash isa and if I had reinvested I would have earned £600 in interest. So my £1440 in savings last year from solar is drastically reduced and my estimated 8yrs payback period increases to 13.8 years if I take lost interest into account. Obviously interest rates will vary but so will tariffs so its difficult to predict what will happen going forward. I can only look at last year's performance
Your videos are so useful , clear and succinct . Having had solar (4kw ) alone from 2010 my solar spreadsheet whilst far from as slick and neat as yours ,adds in the lost interest each year I would have had from my capital outlay if left in an interest account. This currently ,with higher rates , considerably prolongs payback for newish install versus those many years ago when interest rates on capital were often under 1-2%. Maybe add a column on the remaining balance to add in lost interest at a certain interest rate. Also most sane people without solar would realise they should be on tracker and perhaps it’s fairer to use tracker prices (not Svp) to see what your bill would have been without solar. This again prolongs pay back. Keep The videos coming
Thanks for the very kind feedback, Mark. Now, others have suggested the same. The video and spreadsheet were really just about trying to work out the breakeven point - not to see if money was better spent elsewhere... but if others wanted to improve the spreadsheet, I'm publishing any updated spreadsheets folks send me here: garydoessolar.com/payback_spreadsheets/ :-)
Another excellent video Gary!
Hi Chas, thanks very much for the great feedback! :-)
Gary, very helpful analysis! please don't forget to account for greater than average utility rates of Inflation 🧐
Thanks. Can you elaborate on the 'average utility rates of Inflation' please? I'm not sure I understood... thanks!
@@GaryDoesSolar Sure 😊(From memory that I researched this year) Before 2021 U.S. electric rates increases avg.
@@solartime8983 Ah, ok - understood, thanks! 👍
Great methodology. I will try this out
Thanks! :-)
Very good as usual Gary. How to factor in a heat pump is interesting as the PV powers the heat pump and removes the cost of gas.
I had my heat pump installed first, a little under two years ago and the solar later that same year and I started it all with an EV. Since then the available tariffs from Octopus have been getting better starting with Go then Flux and more recently Intelligent Go and being able to swap seasonally.
I had initially estimated with a spreadsheet modeling the installers data that I could save perhaps 75% over my old gas boiler heating system and electricity use but with the new tariffs and banking summer surplus for use in winter at cheap rate my practical results show zero bills over the year. What was a £3,500 annual bill for combined gas and electricity is now zero making payback for the whole system of solar PV plus battery and heat pump under six years.
I'm not including the EV or any repairs or variations in electricity cost but on that basis I couldn't be more pleased.
The more I try to model everything in a spreadsheet to include the different rates and times the hairier it gets. Tricky questions like adding a second battery, another solar panel, or adding another radiator for better COP all definitely improve efficiency and running costs but whether the extra capital cost increasing the total payback time works out needs a little more work.
In fact one thing you shouldn't do is think another battery stops me going flat in December and January and half my consumption being at peak 30p rate so it all costs 7.5p rate instead, perhaps saving £225 at that time of year, so payback time is 30 years so it's not worth getting another battery.
How can that be when the payback time for the whole system including one battery is less than six years?
In reality the payback time for the second battery is only two to three years because the system pays for it.
Thanks John for the great feedback, and also the detailed comments. I don't have an EV or a heat pump yet, but if I did, I'd likely want to factor in the fossil fuels that are not being consumed as a result. This would make for a slightly complicated spreadsheet, I guess...
I enter a several numbers from my electricity bill into a spreadsheet every month and do some simple calcs in Excel and graph how things are going.
I love my solar panels !! My power bill was about $60-70 AUD per month. After installation of my solar panels, my power bills have turned into credits, and I now get free electricity and make around $110 AUD per month tax free on the excess electricity I export to the grid - a whopping 25% Return on Investment (ROI). It's like having a piggy bank on my roof.
Now looking to add more solar panels, and some kind of storage (pumped hydro or batteries), to try and export the maximum I am allowed 5 kW for 24/7.
Brilliant - thanks for sharing!
I’ve just had a 15 kW solar system fitted. With a 12 kW inverter. We have a heat pump and I am estimating we will use half of the electricity for ourselves and export half of it so from what I can tell we will be getting paid just as much as we were paying out for electricity in the past..
Wow - that's great to hear, James! And it's how things should work :-)
For reference, I just got 7.8kW of solar fitted with 10.5 kWhr batteries and it was £10k.
Of course my Northern Irish weather might delay break even but still worth it
That sounds like you got a great deal there! Wishing you lots and lots of sun ☀️ 👍🏻
@@GaryDoesSolar kinda. I'm going to return the batteries. They are a weird type. LiFePO4 but 15 cells not 16, as far as I can tell. That makes them incompatible with every other LiFePO4 48v battery I'm aware of, since they are all 16. I've just found the fogstar ones which are 15kWh for the same price I paid for 10, so I'm going to get those instead.
Brilliant video. Thanks Gary 👌👍
You're very welcome - I appreciate you taking time to give me this feedback :-)
Clear, concise and to the point, as always. One thing I wanted to ask was that although you did address maintenance cost, what about the warranty period of the equipment which in case of batteries seems to be 10-12 years. If the battery packs up right after the warranty period then IMO it would have a negative impact on the break even point/ savings, considering battery remains the most expensive part of the solar installation. Thanks
Thanks, and I think the way to handle the maintenance costs is simply to add those costs into the "capital expenditure" column as they occur.
Nice video Gary. New subscriber here (word of mouth from a friend). Thank you for your shared information on this pernicious subject. It becomes pernicious when and if you acquire a solar system, EV, and heat pump. I suggest full investment in that transition.
Here where I live there are governmental tax and purchase benefits right from the start.
If one decides to go full investment to this transition may need to get a credit. Some banks provide special lending for sustainable energy programs with low-interest rates, promoted by the government.
If this is the case I would consider packing the full results over time with the investment in the transition (solar, EV, heat pump) on one side contrasting with fossil fuels, repairs, maintenance, electricity, and traditional heating, on the other side.
Thanks for your kind words about the video and also subscribing. I hope you're able to secure the credit required to get you started...
@@GaryDoesSolar Yes, I will consider it as soon I pay the rest of my house loan... 11 more years to go.
Installed a 6.2kWp Solaredge/Jinko solar system mid Nov 2023 added a Hydrotherm x8 heat pump end of Dec located NSW just south of Sydney.Once all this settled down we are now in credit, was almost instantly really Dec bill $12.00AU last 3 months in credit average $5.00. prior install bills Average $175.00pm.This is a reduction of 57.2% of kwh, this is primarily through the heat pump and being retired and able to watch our self consumption do not need a battery as the cost of what we get off the grid is mainly offset from our exports to grid @ 1st 14kwh 16c then 07c thereafter, Ave kWh to grid 20 a day.Ave impots 3.4kWh Day @ 0.38445c.This is looking likely to change now as we head into winter however i wont be changing anything to try and reduce a few cents unless there is a lot more clarity in where its all heading.
Thanks for sharing this, Gary. It's great to get a view of what's happening all over the world! :-)
I have a similar spreadsheet. Trouble is you don't have to have solar to be on Octopus Agile, so you could benefit from lower rates than a standard tariff, thus seriously affecting the presumed payback period. However because we do have solar we are invested in understanding and researching the energy market. Almost definitely I would be on the standard tariff without solar however that could well be a mistake for many.
It's true, you could benefit from tariffs like Agile without a solar and battery installation, but it would require careful management.
@@GaryDoesSolar agreed, although most people would probably be able to minimize their use during the peak period, and the Agile rates outside that are usually way lower than the fixed or "flexible" rates. But I agree that Agile comes into its own once you factor in solar/battery. The best return is when Octopus' run their saving sessions - charge the battery on the cheap, then discharge for the duration of the savings session, and they pay you the saving session reward for whatever you have exported. I made over £3 for one of these sessions on a single day...
Thanks, Gary. That's really useful. I have been struggling up to now with how to represent savings and earnings from my system. Now, it will get sorted 👍
My pleasure, Adrian - and apologies the spreadsheet is not available yet - I'm having problems with my hosting provider :-(
@@GaryDoesSolar Not a problem, and many thanks for sorting this out. I started playing with the sheet this evening 🙏 👍👍
Nice. Ive just started tracking mine but yours seems simpler so ill run the two in parallel for a while and see which i prefer.
It will still need some adjustments though. One thing that is different between my set up and yours is that i have an EV. This means that some of my non EV usage was already subject to lower off peak rates so what im currently doing is estimating what my cost would have been. This comes down to, i was using aprox 60% off peak household now its 99% off peak so I have to do a back calculation to work out what my bill would have been on my EV tariff rather than just referring to a standard fixed tariff. This also means i need to split out my EV usage which has to be done manually as though i do have givenergy i dont have a GE charger and my system isnt set up so it sees the EV usage as a seperate category. I can get it from the charger though. So ill have a play with your spreadsheet and maybe pu an EV column in to let me do the back adjustment easier.
Cheers Joe - I'd love to hear how you get on with the comparison. Now, you're right about the EV and how to handle that. I'm of the mind that it should be kept as separate as possible, but I need to think about it more...
Garry, what many people forget to factor in is that the cost saving created by solar is tax/VAT free. So the saving is more significant because the taxed funds you would normally expended for power is now available for other purposes.
in some ways those money are comming out of the pockets of the poor that cant afford free electricity..
im not sure this makes us more rich as a community
Wow a VAT on electricity well make sure obviously to include that in any calculations yes whatever comes out of your bank account in a given time period based upon expected electricity rates plus obviously tax implications which can be complicated in the USA and elsewhere for a given situation
@@Hansen710in other ways the stimulated demand that removal of VAT creates in the economy gives the poor an opportunity to take a job or start a business to supply that demand, which puts money right back into their pocket - if they are willing and able.
That's a great point, and one that I now can't believe I didn't realise myself! Back to my spreadsheet I go... 😁
Interesting point!
last year i got a 2013 chevy volt. i think they are more commin in the uk under the ampera brand. the return on investment time is around 2.3 years, which is pretty ridiculous. it has zero of the downsides of an EV, and ive already put 25k miles on it, many from my partner who drives it to work now too. it is really hard to justify an EV, especially with the depreciation cost factored in. the car has basically lost no value since i bought it, and i was crazy enough to recently put a low voltage solar system on its roof to give it more range. will upgrade the low voltage battery soon to a 3.5kwh lifepo4 12v battery lol. its a fun easy way to get into these things without any compromise.
Sounds like the volt was a great investment for you!
I am currently energy + meaning my usage + export covers my Electricity and Gas payments for the year and I have surplus profit from the electricity that reduces my installation costs.
I have further savings by replacing my Gas Hob to an Induction Hob which has cut my Gas bill in half.
Hi Kent, that's great! We switched from a gas to an electric hob a couple of years ago and haven't looked back since. Easy to use and clean. And of course, can be powered by solar and battery most of the time! :-)
@@GaryDoesSolar I still have it as a backup and of course it is better than using a hob in certain circumstances but there is a massive difference in how much gas i've used and I would recommend having both options.
Another great video and perfectly timed speaking personally. I've actually made a similar forecast model spreadsheet and will share it with you, I hope it can be of some help to the community!
Hi Rahul, thank you for your very kind words. I would love to see your spreadsheet and make it available to the community. Please feel free to email me@GaryDoesSolar.com - thank you!
Great content! One point to add is that I think a cost factor missing from this is the extra home insurance premium for the installation? It might be small I'm not sure, but it will affect payback period wouldn't it?
Thanks and yes, any additional costs should be added as part of the investment. When I asked my own home insurance company about any increase in premiums,they said there were none 👍🏻
Brilliant video Gary. Can you confirm what happens in the "C.Harris" version of the spreadsheet when extra capital expenditure is added to a later month. I think Linest needs a tweak as the crosshairs go wild.
Thanks! I contacted Craig and he's updated the spreadsheet here: garydoessolar.com/payback_spreadsheets/
Could you try it please? Many thanks!
@@GaryDoesSolar Yes, that's sorted it. Good work. I do like the cross hairs. Now I just need some sunshine to match those pesky PVGIS estimates 🙂
I've had solar and battery system for 2 years now and an EV 18 months and once you add the EV in it gets a bit more complicated to work out ROI but one thing I do know is my original estimate 8 to 10 years is looking more like 5 to 6 if the tariffs stay as they are
Great stuff! :-)
im looking at a ROI in about a year
and that incl. my crypto miners (that cost the same as my 16kw hybrid system)..
adding some kaspa krypto miners for example can make the ROI many times faster...
they also heat my house for free, its a win win
i have a income of about 15000-30000€ a year on my solar and miners
lots of ways to turn electricity into a product that is worth many times more then what the grid gives people...
after all many companys makes money from using electricity
getting stuff like heat as a waste product is also worth alot these days
im not adding those savings, i easy use 2000€ to heat without my miners in a year
Hi Gary,
Thanks for the video and the spreadsheets, I have been recording my FusionSolar App data and Octopus data in a spreadsheet since August last year and was then going to look at how to progress.
If you replace the NA() in the formula in your spreadsheet with " " , the row with calculations in will be blank, until data is entered in the other cells.
[=IF(ISBLANK(D16), " ", E15+C16+D16)]. I used this method when producing spreadsheets many years ago.
Again many thanks for the videos.
You're very welcome, Graham. Funny you should mention about the NA() and " ". I originally had the latter, but then the chart flatlined where there was no data. Did you see the same?
@@GaryDoesSolar Yes Gary noticed that, now looking for and trying to understand articles on how to leave the chart blank as in the NA().
Great video and explanation, love your videos.
Have you accounted for export, or have I missed that?
If it’s based on your bills some months would be minus?
Thanks for the really great feedback. Now export is included as it's already accounted for in the bill payments you enter in column D. If you look at my own data towards the end of the video you'll see some of the entries in that column are negative (meaning export > import than month).
hey Gary, can you make a video related to homebatterys and the different methodes like 48volt and the high voltage batterys (BYD) and such? iam trying to learn the practical differences and the costs.. its so hard matery. have a great weekend!
I have to be quite strict with myself on what topics I cover. I don't have a lot of free time so I try and concentrate on the topics with widest appeal... Did you try searching for 48volt batteries on TH-cam?
@@GaryDoesSolar no problem m8, yeh iam even into solar myself but my job didnt start yet with battery installation but very interesting to learn all about it at least to give some good advice and answers to the customers.
Hi Gary, do you have a similar spreadsheet with Battery only assuming daily usage is drawing from the battery and the battery charging overnight cheap rate UK rates? Cheers
Even better - I have a utility that might help, explained in this video: th-cam.com/video/3G28AGyyrOU/w-d-xo.html
I use estimates from the octopus app because they bill me at stupid dates instead of calendar months. Should be good enough, right?
I also ignore standing charges as they come out the same on both sides of the equation.
Do you put your savings sessions income into the bill column?
Only 4 months in now, but my biggest savings are the actual load we were only aware off since we got solar and monitoring everything. (Immersion heater)
Hi Lars, yeah, I think using estimates from the Octopus app would be ok, as will be omitting standing charges because essentially all they do is add height to both the green and red lines - they'll still cross at the time month/year.
Yes, any income from saving sessions should go into the billing column.
Great news about your savings progress so far!
I got octopus to change me to monthly billing as so much easier keeping a track on usage.
@@Dominique-dlozuk I get billed monthly, just in the middle of it. Do you mean you got them to charge you at the end, like in a proper calendar?
@@larsmenken2679Great question - and I’d like to know the answer too! 😊
Excellent idea Gary - question though, what data do you use each month for the standard import and standing charge? UK average from Ofgem? i.e. where do you get these figures from? - thanks
Thanks 😀 For the video, I just looked at recent price cap data from Ofgem. There might be data here though for further back? energy-stats.uk/download-historical-pricing-data/
I've just invested 5k on a 6kw array, 6kw hybrid inverter and a 7.5kwh x 51.2v lithium battery. I did most of the omstallation myself, (leaving the electrics to a qualified solar engineer) So the above cost me a lot less than 7k. Payback is on approx 4 years.
Wow - great price and looks like a great return to go with it! :-)
@@GaryDoesSolar Bought direct, except the panels, which were bought locally at just over 100 euros a 450kw panel.
I'm in it for the environment, but also for the green. With a 6kWH battery and 6kWH array. Can you tell me whether it's better to charge in the early hours and sell it back (Octopus Flux) or just self-consume? We shoudl be generating about 80% of our energy needs in daylight. 400W at other times.
I have a utility for that here: garydoessolar.com/utilities/dailymodellingutility/
Enjoy!
What you get paid back vs what you are charged means it’s more likely to be better to consume the battery, this is one of the mains reasons for having a battery. You may also be able to buy cheaper off-peak electricity to charge your battery and use the battery during the day for those dark winter months.
I've just finished putting my figures into the spreadsheet. We are just about at our first anniversary, well, we will be in 9 days time to be precise.
I was expecting to see a reduction in electricity usage through the summer, but I'm seeing the opposite. For example, May 2023 our consumption was 461.58kwh - PV = 429.68 and the grid = 31.9. Where as November 2023 our consumption was just 338.44kwh - PV was 141.64 and the grid was 196.8.
It took a few minutes, then I realised that right through the summer, I was using the immersion heater to heat the water and not the gas boiler. Where as, in the winter, with less solar generation, I was using the boiler more and only using the immersion when we had a surplus or an Agile plunge price.
Now this has to effect my break even point, but I'm still trying to get my head around to what degree.
Oh my goodness! I bet your heart sank when you saw that immersion switch on (I know, I've been there myself!) Now, it might not affect things as much as you might think (maybe a 10-20% shift). What tariff are you on, and what sized battery?
@@GaryDoesSolarI've been on Octopus Agile for about 6 months now - I watched the video and thought, 'Yes, I'm brave enough.'
Currently, I've got 5 Pylon US2000's giving me a total of 12Kwh of which I've lost 2% over the year. After reviewing my log, my installer is suggesting increasing this to 16.8Kwh with 2 more batteries.
It was more the fact that when Agile is free or negative, I've been force charging and also heating my water which will result in a lower gas usage which I'm not taking into account in the spreadsheet. But you think this may be negligible?
@@shaungilks8136 That's the great thing about a Pylontech array - you can just keep on adding to it - and pricing each time continues to fall 😃
It's hard for me to comment about the impact of your water heating impact...
Another top video Gary, great stuff! I am quite new to solar and Octopus energy so I just wanted to clarify the 2nd column, does it take into account the income? Taking my first full month March and rather than looking at the Octopus bills(as they go into Feb/Mar and Mar/April), I am looking at the GivEnergy reports: estimated import costs were £43.80 but my income from export was estimated to be £55.80, does this mean I input a negative number? I have checked a date range from one of my octopus bills in March to the exact date range in my GivEnergy portal and the estimated cost pretty much ties in with the actual costs in my octopus bill. Many thanks, Ian
Thanks Ian, and yes, column 2 does take that into account - you just enter the total of any and all import and export for the given month. See my own data near the end of the video, where I have entered negative numbers for some months given all the export I had...
Great video, thank you. But the spreadsheet would even better if we can consider the upfront cost might generate a proper amount of interest / investment return, say 4% to 5%? That can be more accurate.
You're very welcome. Now, you make a good point, but this video is really about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'd be happy though for anyone who wants to enhance the spreadsheet, and I'll post any enhancements to it here: garydoessolar.com/payback_spreadsheets/
Hi Gary, I have collected data since install. The setup is a bit more complicated because of Heat Pump and EV. How/where can I find out (in the GivEnergy Portal) the real "Home Usage" data without including the KWh that goes into the battery every night? In other words, the "Without Solar - Home Usage" should be, in my case, ASHP + EV + House Load rather than ASHP + EV + House Load + Battery.
What I did was generate a report between two dates (the report option is near the bottom of the menu on the lefthand side. Then, when the report is ready, just scroll down to the section that I showed in the video. Message me if any issues...
Great video and nice simple spread sheet. The actual energy costs in the "With Solar" section. Do you have to add the standing charge into that figure or it it just the usage costs?
I think I've worked it out watching again. It's just cost!! Great video still.
Thanks. Yeah, the standing charges should already be included in your actual bills 👍🏻
@@GaryDoesSolar OK so sorry trying not to be thick!!! The value in that box is the actual cost to INCLUDE the standing charge?
Yup, that’s correct. It’s the total amount that you pay the energy provider, standing charges included 👍🏻
@@GaryDoesSolar brilliant. Have you tried Predbat yet? Looking forward to a video on it. 😜
There might also be a cost offset if adding solar increases the value of the property.
Good point
how would this work with peak/off-peak and so forth?
This could be handled with a couple of extra columns in the spreadsheet perhaps (turning the import rate column into peak, off-peak and percentage split. I don't have time to do this myself, but if anyone facies doing this, I'll add their work here: garydoessolar.com/payback_spreadsheets/
Gary I was told by my supplier that I should stick with octopus cozy instead of moving to octopus flux. And get the fixed 15p for any electricity I export. Could you do a video comparing both strategies, thanks.
Thanks James - a Cosy video is on the list, certainly - I just need to get round to it! :-)
A word of warning, I installed solar and battery storage in November last year and am really pleased with how it’s going, but last month I had a energy performance certificate (EPC) done on my property, unfortunately because of my solar install (5kw) the property was given a E rating when before the installation it would have been a D rating. Because of the E rating I am unable to apply for a insulation grant via the “Great British Insulation Scheme” for under floor insulation and so has denied me access to around £3000. So my advice get your (EPC) done before installing solar. In affect this has put an extra £3000 to my installation costs.
Hi Paul, thanks for sharing this. I really don't understand your EPC rating. We recently had to get this done because we're looking at getting a heat pump. We got a straight "A" - specifically BECAUSE of the solar panels. Might be worth getting a second opinion?
Many thanks Gary for getting back, yes I think I will get another opinion. I did think about appealing to the company that did the survey but I very much doubt that they would overturn one of their employees decision.
That does NOT make sense to me. Solar should improve your EPC rating! I'd go back and question that.
I'm in a renewables group on Facebook and there have been a lot of posts and comments recently about how other energy providers are surpassing Octopus in rates, particularly for export. There have also been a large number of complaints about still waiting for Octopus to install a smart meter with many having waited in the region of 1-2 years already.
I was waiting for a smart meter but when I messaged them on X they responded immediately and fitted the smart meter within 2 weeks, they are quite responsive on social media. 👍
On the smart tariffs front, always read the fine print - the headlines may look good, but there are likely to be limitations.
I'll give you a counter to that - I moved to Octopus from EDF in mid March. I applied for smart meters as soon as my account was created. A few days later I was given dates to choose from for the meters to be fitted. This was a week before Easter so I chose the Tuesday morning after the bank holiday. Chap fitted them by 12pm and gave me a Home Mini rather than an IHD. I watched the feed for a few days and decided to move the Gas to Tracker. Applied on-line late in the afternoon on Monday this week, was sent an e-mail saying it was done on the Tuesday afternoon. I really can't complain about Octopus.
@@GaryDoesSolarnot on Tracker or Agile
thanks for this Gary. Wondering if you did an episode regarding feed in tariff eligibility as I was told that FIT no longer exists and can only be claimed by existing customers if they upgrade.
You're most welcome. Now, I chose not to cover the FiT scheme as it was UK-only and now (as you say) discontinued. Those already on the scheme are enjoying lucrative benefits (great) but it's not open to anyone else. The scheme did its job though - it raised awareness to sustainable living with solar panels - pretty good result!
One thing to mention is that most households consume less than 4000 kWh per annum, the approximate usage level at which batteries start to make economic sense.
Removing a battery from the equation will reduce the payback period for net exporter households.
With octopus 🐙 tariff you can export and import at a good rate if batteries are costly
Interesting point, and of course that value will change as the price of batteries continue to come down...
@@GaryDoesSolar surely batteries will be redundant unless you go off grid if the latest tariff by octopus makes good financial sense
@@GaryDoesSolar Indeed. That said, the main drivers of the return on investment for PV have always been primary household annual consumption, cost of components, followed by import and export tariffs.
When you remove £3K of batteries (a rough minimum these days), a < 4k kWh p.a. consumption household experiences a ~2 year quicker break even point, more so if they have a West facing aspect to take advantage of Flux's peak export window, as your collab video data highlights.
Hello, quick question question. I have 14KVA solar system, newly installed, with 10KVA inverter. Now spring is here it’s starting to clip a lot. I plan to get a battery, I take it, it will be best to put on the DC side of the inverter to cut down on clipping. Am I correct?
Unfortunately, l'm not in a position to provide individual advice (not least because of potential liability issues, even if that advice is given free - such is the world today). You're best to speak to an installer for such advice, or post a comment onto a solar forum (e.g. this one in the UK: facebook.com/groups/2197329430289466). Good luck!
Gary, just to clarify, do you minus the exported payment off your monthly bill. so if I paid £16.74 for electric from the grid and I received £28.46 for exported, would that month be minus (-£11.72)? If not how do you take in account the exported credit? Thanks from a confused oldie :-))
That’s correct 👍🏻
I am on Octopus Inteligent Go so a daynand night rate with or without Solar what do I input into the spread sheet in this case
Hi John, this could be handled with a couple of extra columns in the spreadsheet perhaps (turning the import rate column into peak, off-peak and percentage split. I don't have time to do this myself, but if anyone facies doing this, I'll add their work here: garydoessolar.com/payback_spreadsheets/
You have to take into account the increased value of the house should you come to sell.
So, what we’re talking about here is asset value. Your solar and battery installation is also a depreciating asset as well as a revenue generator - very good point! 👍🏻
Do any of the models use bank interest rates on the investment?
No, please read the pinned comment to understand why.
surely the standing charge would apply anyway, regardless of solar savings?
For the "with solar" it does, but remember that's already included in the bills you pay, yeah?
I'm confused. Does the spreadsheet imply that there's no standing charge with solar? What have i missed?
The standing charge is already included with what you pay for your actual bills 👍🏻
So how can you show a bill for £0 for summer months in year one?
@@clivehayball3782Maybe because even with standing charge, he's not using grid energy, and the export is more than covering SC etc?
That's the thing about Octopus - on some months I don't get a bill.
So £0 means no bill, not that savings exactly equals standing charge. Makes sense now.
You are aware there is a glut of solar panels China is shutting some factories down. It would mean lower prices for consumers. Just a matter of time it gets passed down. Difficult to time your install right though do you wait for prices to drop and install or go for it start your journey on solar energy.
Also Gary does the generation meter and app results the same or near enough? Just asking as mine inverter is showing huge difference.
It's the efficiency of your inverter when converting ac/dc results in heat
You're not wrong about solar panel prices - I'll be doing a video on the shortly. Prices are coming down like gravity!
Regarding your generation question, what equipment do you have and what app are using?
@@GaryDoesSolar it is LuxPower about 800 kw out with the generation meter
Ah, I don’t know much about that battery, unfortunately. Might be worth asking a question of a solar forum like this one: facebook.com/groups/2197329430289466
if we put panels on the roof of the house we are living in they would be facing WSW and ENE. any thoughts?
You would not be unusual.
Depends which country you are in...
Cost of capital - is that accounted for? If you have the £20k to spend you could have invested that in something else. Or if you had to borrow the money you have to account for the interest paid somehow.
The investing the 20k into something else would have to earn enough to pay for the energy bill, the odds of buying shares or anything else for 20k and it pay 2k dividends a year is very unlikely, and then you have the benifit of it actually adding value to your property so if you where to sell your property you probably won't get the full 20k that you initial invested but you will get something back, I say probably as in a previous house we lived in I had installed a 13k solar system, got the benifits from it for 3 years and actually got the money back plus extra after property sold as the buyer was willing to pay extra as we showed a years worth of electricity bills and how cheap they where and that extra covered the initial installation costs before any goverment incentives.
But I do agree with the point about financing for a solar system as the interest or "account keeping fees" that some institutions charge can really add up
@@J-P88 you can make money on electricity in many ways.
companys all over the world do that in many many ways...
i agree shares is not the way to go..
but if you convert the power the system makes (or the grid makes) into more money then the day price..
it can never go wrong...
im producing many times more money from my crypto miners, then the grid gives ..(+ free heat)
worse case scenario i heat my house for free with them, but that is only if the whole world crashes..
i still make money if the prices for what i make drops over 500%
right now im looking at a ROI in under a year for both solar batteries and crypto miners..
and i dont pay a heat bill in scandinavia
money is the best form of battery..
i rather have a stuffed wallet, then a full battery
im looking at a income of 15.000-30.000 € per year on my 16kw system
@@Goodkiwibloke true, that's if it is bought through finance,, and even then it's all about shopping around for best deals and what works for each individual if that's the path one has to take.
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@tristramsnowdon5256 But did you do just that a year ago then? Of course you didn’t - because you could not be sure the price of gold would rise. Get real please… The returns on a solar installation, whilst they may not be as high as other investments, are all but guaranteed.
is this even worth it on a terraced house? will i have enough roof to actually generate anytihng?
Try this: th-cam.com/video/MdpQci4vTLU/w-d-xo.html
Obviously a battery offsetting high evening electricity prices makes payback potentially sooner/probably better even if your excess solar production can’t be sold to grid!🔋🌞🗽
Yeah,... depending on the price of the battery of course. But those prices are coming down a lot at the moment... :-)
@@GaryDoesSolar 🔋🥂
The reality is that with octopus tracker the average elec price is around 19p/kwh over winter and much lower in spring/summer so comparing solar+flux to standard tariff isn't really fair. Financing £20K isn't free either - even the loss of savings interest would be up to £1000 pa - thats an ongoing cost until savings repay it.
I guess the problem is that most people in the country who don't have solar don't even know about the daily tracker tariffs... I'm targeting that audience too. I'm going to write a note about the financing...
Have to factor in the lost earnings from investing the capital spent up-front on the solar system.
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@@GaryDoesSolar Yeah so 4% interest rate, risk free (which is what most UK banks are offering at the moment) on £20,000 is £800 a year.
So £2346 saving should actually be £1546, so estimated payback after 13 years, instead of the 8.5 years?
To be fair, this does assume that the 4% will be around for the next decade which is certainly not guaranteed, so I can see it is still technically a risk.
Standard procedure for doing cost-benefit analysis.
Interesting (and very easy to understand) video. But I'm not sure you've captured one of the most important aspects of buying solar... If you hadn't spent your £10K on solar, you could have placed it in a cash ISA or savings account and used the interest to pay off some of your (non-solar) electricity bills each year. Using simple figures as you did, maybe that interest could reduce your pink "without solar" cumulative costs by about £400 a year. You might like to try that on your spreadsheet and see where the break-even point moves to... It could possibly move so far to the right that you'd need to replace the inverter and battery before you've even actually reached break-even...
I'd be interested to hear from you what happens if you reduce the pink "cumulative electricity cost" by, say, £30 a month... Perhaps you can try that and reply to this comment with a quick note to say what the payback period moves to - I'd love to see!
Meantime, do keep on with your informative and well-presented videos - they're a great watch...
Good points, Derek, and thanks for your kind words. This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
@@GaryDoesSolar I quite agree with your need to keep things simple.
So what follows is a PS, rather than a new comment...
You said you'd leave the more complex analysis to others, so I've stepped into the breach and done a quick lash-up. Usually my Mac will read Excel spreadsheets, but I lost all the formulae in yours - the NA function was the issue. I put the formulae back in, and duplicated your first year's "example" figures into subsequent years. I reckon the break even point is Jan 28 (8 years). Then I surmised that if I had put the £10K installation cost into a cash ISA instead of buying solar, (moved to the pink column) I could generate about £33 a month in interest, which would reduce my non-solar electricity bill. I reckon the break-even point moved to almost 12 years.
For people like myself - semi-retired - my installation cost has had to come from money put aside for monthly bills, so I do need to realise that my "true" breakeven point is quite a long way away, moreso because it takes the inverter and battery outside their warranty period.
My "model" (to be fair) is overly simplified - it takes no account of inflation, which would mean my £33 a month reduced the non-solar bill by less and less, whereas a solar PV system is essentially inflation-proof and tax-free - can't get better than that!. In fact inflation-proofing my energy bills was a big point for me.
Am I disappointed that my true breakeven point is so far in the future? Well no, because of something else one simply can't model.... We've moved to a village with underground mains supply, but the mains reaches the village on overhead wooden poles. In the most recent 12 months we have had 6 power cuts - 2 for maintenance and 4 for repairs. Although I'm semi-retired, my remaining work is teaching via video, so a power cut is a real emb*ggerance. But now my system switches over when there's a power-cut and everything in the house stays running. That's as valuable as inflation-proof energy bills!
Thanks again for tackling an important consideration in the purchase of solar - may all your days be sunny ones!
@@DerekHasted Thanks very much for taking the time to do this, Derek. Very helpful to others 👍 And great to hear your system has made life a lot easier for you now, when there's a power cut.
Let's not kid ourselves about the costs without solar. Would we have been buying electricity at the standard rate or would we have used a smart tariff like Ocopus Agile or Tracker?
Well, most people in the UK are on normal flexible tariffs unfortunately... They're not aware of the daily trackers...
i watched a video recently by one of the big solar youtubers. it was titled 10 reason solar might not be for you. one of the reasons was if you didnt qualify or the federal 30% rebate. my response was if you need a tax rebate to make soar possible, then the federal govt shouldnt be pushing solar as a solution since its obviously not.
a tax rebate is really nice, but the program would be a failure if its necessary. its not necessary, solar can pay its own way, the rebate just makes payoff sooner.
Tax rebates and other subsidies are necessary for starting up an industry. Few industries are self sustaining in their infancy. Once the industry “gets good”, the rebates can ease off. And then it becomes a tax revenue generator.
Solar has been without subsidies in the uk for about 5 years now. One major advantage we have over the USA is a lack of local authority permitting paperwork. That’s a lot of cost saved.
The only matters of paperwork that exist are with the electricity distribution companies for inverters connected to the grid that are bigger than 16Amps per phase. Even then the paperwork is generally free to submit.
Anthony provides great insight on your comment, Scott. I'd only add that the technology (solar panels, inverters, batteries) is getting cheaper all the time, which means more people and players will enter the market, which again will push prices down further. A virtuous cycle...
I'm still not convinced that solar panels can EVER be a viable investment in today's climate.
I have 8 x 395 JA solar panels. Over 12 months, they generate 2,500 kWh. If you export all of this & 'value' it at the current Octopus variable rate of 25p/kWh, the panels are 'worth' £625/year. Whilst the panels & the associated gubbins might be relatively cheap, the cost to put everything on my roof & in the loft came to £8,750 (actually cheap by today's standards). So straight away you're looking at a best case payback of 14 years. However if you, more realistically, value the power at 20p (half way between the Flux Export peak-rate & standard rate), then your 2,500 kWh is only worth £500/year & now you're looking at 17.5 years JUST TO BREAK-EVEN!!
When the energy crisis bit, I was using 2,390 kWh/year of leccy at 34p/kWh. Today, after economising, I use 2,150 kWh/year & the 'non-solar', variable rate price is 25p/kWh. Every time, the price drops or you get yourself an air fryer, it undermines the economic case for installing domestic solar panels. Likewise every time someone connects a new large scale wind/solar farm to the grid, it undermines the environmental case for domestic solar.
And finally, it's worth pointing out that had I put my £8,750 into an ISA, at say 4.5%, it would generate an income of £394/year...a number not too far off the savings you get with solar.
IMO, people need to think long & hard before they part with their cash for a solar system, it's not necessarily the money spinner the incessant ads on TH-cam make it out to be...
You're right - and it's actually the reason I started this channel - to help people really understand what they were getting into (including financially) before taking the leap...
I actually think we can go one step even further than this… right now in the UK (Hampshire) the sun is out strong and the array is already clipping, with export is maxed out at the permitted 7.8kW… I already receive a credit each month despite consuming well in excess of 1 MWh each month… so I find myself thinking what else can I do to actually use MORE power. Now remember quality of life in countries does tend to correlate with energy usage per capita, so can we make this extra/cheap energy work for us as a whole?
I honestly think that in time, energy will be near-zero pretty much all the time. Imagine what that does in enabling national economies - all of that energy cost taken out of the bottom lines.... golly!
Is it just me, or is the link to the spreadsheet missing?
No, it is not just you. My hosting provider seems to be having a problem at the moment. I cannot upload the spreadsheet. Hopefully this will be resolved later today.
I've provided my version of the spreadsheet
Firstly I think it's unfair to compare the non solar case using the Standard tariff.
Your spread sheet with flexible or standard tariff returns your investment in 7.65 years
However if you replace that with the Octopus tracker tariff which I am on, getting about 17p on average, the payback becomes 13.24 years
BUT we are not comparing like with like - we are assuming that the user Just invests in 'Solar' I propose a position (which I have done) where I invest in not having solar which involves putting the £10000 into a bank account which have called SOLAR. I then use the interest (around £41 per month at 4% interest). When we do this it brings the payback to about 25 years.
I've created a column Y which pays me money much like the solar panels apparently would do and I use this money to reduce the value of column J
I'd be interested in your response
yes, I know your spreadsheet is to work out your return on investment in solar..... I think it needs to treat the comparison with an investment in "none solar"
I didn't have time to refine my sheet .... but I think it tells a tail
Thanks for sending me your spreadsheet.
I would say it’s not a forgone conclusion that those without solar would be on a tracker tariff. Most of the population is on a fixed standard rate (and may not want the uncertainty of a tracker tariff). Also, as we’re looking at a long term payback period, there are no guarantees as to what will happen with tracker rates.
I agree however, for those that would want to compare against that, your spreadsheet is useful. Are you happy for me to upload it onto the website so that others can try it?
@@GaryDoesSolar
Gary
Agree with your tracker tariff assertion. But there is little certainty in life at all :-)
For us octopus compare now says that Agile is better for us! I suppose also there's a median position of buying just a battery and using Octopus Go that would really bring down the cost per KWh. But the battery would require buying
I suppose my general point is that if someone, for instance myself, is doing a real comparison. They would have specified the solar system very carefully. Hopefully they would also think about getting a better deal on electric tariff than just the standard. So the right hand side of the spreadsheet [none solar] should be treated to be as good an "investment" as it could be also.
I'm more than happy for you to upload it.
There is an issue the interest per month column Y is strictly not correct...I just divided the annual interest by 12.
I was very surprised at the outcome doing it this way try 5%
This is very interesting - but you are forgetting the interest your £20,000 would be making if it were in a savings account. I'd say you haven't accrued between £920 and £1200 in a savings account (tax-free if in an ISA). If you were borrowing the money you would be paying interest on it and that would be included in the cost, perhaps the 'loss' of not having the money saved should be too?
But I don't look at the money I'm spending as trying to get a 'payback' - £14k - but as a better way to 'invest'. I think with my simple maths I should be making a touch more money every year with it than a savings account would be giving me. Then, given the difference between my actual bill and the without solar bill should be a positive every year so I'm 'paid back' already. Does that make sense? 🤷♂
That was my brothers argument but it was easy to show that the amount you are saving on energy far outstrips the return on investment given the current energy crisis.
What you have also missed is Solar panels usually add value to a property, hypothetically you install a 14k solar system to your house, live in the house for X amount of years, get the benifits from Solar and then sell the house you will get some of that initial investment back, IF lucky like we where, the buyer actually ended up offering extra on the house once we showed how low our electricity bills had been for 3 years so much so that it covered the initial Solar installation cost. And you pay your electricity bill but all you have to show for it is the paper or the email the bill was sent on.
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
2 quick comments and this observation. Isn't it irrelevant what your pay back is or isn't when you have already got a system. Surely it's more important if it's worth it in the first place. I want a spreadsheet to tell me mine calculating if its worth it is wrong.
IMHO one glaring omission you have not allowed in the do nothing columns for the amount of money you would get back per month/ year if you were to invest the money and don't install solar.
A standard tariff is the very worst option if you haven't fallen into the solar trap. I've chosen the tracker tariff and may go back to Agile.
I use about 10 KWh per day. On tracker this works out to about £700 per year. If I install solar and battery at £10000 install cost for an array predicted to return 3600 KWh per year. It's clear to me that a return is impossible in 10 years. It's more like 15 or more likely 20 years because a KWh off the roof is more expensive than an exported KWh would give me.
Am I wrong...if so where??
I use a similar amount of electricity to you. I don't know where you're getting your predicted output from but my 6.1kWh East facing system generates about 6300 kWh/year. It cost less than £7500 in summer 2021, and includes 4.8kWh battery storage. I agree that an adjustment for investing the money should be added. This can be done by adding the investment return that has been lost to the monthly running costs in the spreadsheet. The estimated payback period provided by my installer was around 13 years, but with the price of electricity almost doubling since then, the payback period by my calculations will be around 8 years.
I can understand where you're coming from with thinking not to include the cost of the system in your payback. It is relevant to include because the idea of the spreadsheet is to see how much money you can save in the long run, and the cost of the system is a part of that equation and therefore must be included, even if you have written off the cost as irrelevant.
As for investing the money... I think you're missing the point. Yes, you can absolutely invest the money that you would have spend on the solar installation instead, but that money would then be completely divorced from the problem. The question is essentailly "If I spend £X on a solar instillation, when will I have made my money back?" and not "Does installing solar make me the most money?".
@@Blocksetter63
I'm treating it as an investment therefore I have to compare it to a different investment. ie compound interest.
I need a return in 10 years.... I'm 77 won't be in this house in 10 years.
We're Southern Scotland that was the average output, well a little above average, of 4 quotes.
My average quote was £11500 from memory. Not worth exporting far too little return.
It's not worth the hassle though I'd love a system son that I can tell everyone I didn't need to pay for electricity this month I got it free from the roof. 🤣😔
@@varnect203
You either borrow the money in which case it's cost you more for the system. Or you use your savings in which case you would keep saving if you didn't go solar.
Gary has also missed possible maintenance. Mine's a slate roof. We needed to replace a slate last year, I forget the cost maybe £200 . I asked the roofer what happens if a slate under PV panels needed to be replaced... Scaffolding, remove panel, replace slates, refit panels. £1500 to £2000
This video is about those who have already made an investment into solar, providing an easy method for tracking the financial return on their investment. It was not intended to determine whether such an investment is better than other options. I'll leave that to others...
I have a suggested, different, spreadsheet which gives a very different result for this. Send an email address where I can send my suggestion.
garydoessolar.com/payback_spreadsheets/
@@GaryDoesSolar I need to get on a PC to do this properly. It may be a few days as we are away from home. I absolutely hate Google sheets on a mobile phone 🙃
Problem is the idiots google earth still showing my home address is a empty field , can’t accurately calculate the roof space myself
Have you tried bing.com - perhaps it has more recent imagery?
Great video but your calculations are based on daily consumption and doesn't take into account consumption split between peak and off peak periods eg for people on Octopus GO or Intelligent Octopus GO tariffs . I'm on the latter and consume a lot overnight eg car charging, washing machine, tumble dryer, battery charging. The Givenergy reports do not give this breakdown. You only get hourly consumption for a specific day not a range of days so to find out for example how much you consumed overnight during a month you have to produce 31 daily reports and add up all the overnight consumption figures up to get an accurate total. Alternatively you have to take an estimate eg 70% consumption overnight and apply that to get an estimated overnight consumption figure. Also , I spent £11.6k a year ago on my solar install. To fund that I used a maturing Cash ISA which I would have normally reinvested. Had I done that instead at 5.1 % I would have earned just under £600 last year so that would need to be considered. I saved £1440 last year giving a 8 Yr payback BUT if i take off the £600 i would have earned in interest that 8yrs increases to 13.8 years which is significantly longer!
Hi Jim, I think the spreadsheet does take that all into account, because you're entering the results of all that in terms of the (lower) bills you're paying.
Quite a few have mentioned about investing with an ISA/fund instead. I'm going to write a note about that...
@@GaryDoesSolar Surely the "what you would have paid" figure needs to take into account overnight consumption x overnight tariff plus daily consumption x daily tariff? This is the "what you would have paid" calculation not what you actually paid. The difficulty is that if I hadn't installed Solar I wouldn't be charging battery overnight only the EV car, washing machine and tumble dryer so overnight consumption would be overstated (but I could subtract 5 kwh from each overnight figure as I charge fully overnight
The spreadsheet is really for those who have an installation now but were on a standard tariff before. For those who were already on some kind of smart tariff, the spreadsheet could be modified to suit (perhaps some will do that and send to me) but my videos are always aiming for the widest appeal.
@@GaryDoesSolar That would be interesting to see your thoughts. I have updated my own spreadsheet to take into account the 'loss' of interest by using capital to invest in Solar rather than for example continually re-investing in a simple Cash ISA. Based on the last 12 months figures (I installed at the end of March 2023) the data is telling me my payback is estimated at 7.7 years which is a lot better than my initial supplier proposal which suggested o payback of 9.5 years. HOWEVER I have effectively lost interest by not renewing my Cash ISA as the money to fund the installation was taken out of a maturing ISA so although it looks like I 'saved' c £1500 last year I didnt really as I could have made £580 in interest tax free ie I really only 'made' net £920. This reduction in estimated savings, which is significant, has a big impact on my payback period increasing it from 7.7 years to 12.6 years. I havent worried about compound interest, just considered simple interest ie removing the annual interest each year and leaving the principal amount (ie what I invested) in the ISA. I'm not actually that bothered tbh about length of payback as I consider the investment a sunk cost. Nobody worries about payback when they splash out on a new car, double glazing , a house extension or kitchen do they (although potentially an extension can increase the value of your house)!
@@jimgardner6394 I'm going to leave opportunity cost calculations to others, I think... 🙂
Each electric car you own will accelerate the payback period.
I'm hoping to get one soon, so can't wait!
Once the investment is made it will generate what it will. You may change habits due to it, or may have been more frugal without it. As such calculating a payback time after the event is pointless. Find something better to do with your time.
Judging by the feedback to the video I've received so far, many people do wish to track things... Personally, I think it's a prudent thing to do (for any investment).
@@GaryDoesSolar it is prudent to do for any investment where you can adjust the factors. In this the only thing to do is optimise the benefit you have, manipulate your use and batteries to optimise your return. To truly calculate your ROI you would have to look at where the money would have been otherwise, the interest rates compounded or if the money was in a shares ISA then how the value of that changed including any dividends that would have been paid. Without doing that any returns measured are meaningless. It is worth looking at the expected return before purchase and along with the environmental factors decide if this is where you want your money to go. However, once installed it will do whatever it is going to do.
@@stephenrussell6074An ROI for a particular investment has nothing to do with an ROI of a different investment. It’s simply the return on that particular investment. My video was never about comparing investments, so I don’t know why you bring it up. That said, as you say, the payback on a solar investment will be what it will be. And my video provides an easy way to calculate such.
@@GaryDoesSolar if you are looking at the point where the solar panels have paid for themselves including additional amounts paid for repairs etc. then you have to consider the money not being spent on the panels at least being in a bank earning interest. In the same way that if you borrowed the money to invest in solar you would include the interest on the loan you had to pay. Likewise if you pulled the money out of an index linked ISA you have to consider the value that would have been if you had not purchased the Solar. Otherwise the so called ROI is not representative of anything. It is certainly not the point at which you begin to reap the rewards of your investment which is how the ROI is intended to work. I expect that everyone who borrows to buy will include the interest they pay as part of the cost. Likewise people who pull from their savings must also include those missed benefits otherwise the loan taker has a true ROI but the cash buyer does not. The reason for looking at it in any way can only be to affirm you made a good decision and it is no good doing that with a flawed end point. The cash buyer will probably have done better than the loan taker unless the loan was taken shortly before interest rates increased a lot. Which would also be impacted by price changes in the industry.
My whole point is if you are going to make this calculation then it needs to be representative of the real situation at least the base of that case. Had nothing been done with the money. People who did or did not take a loan should have information that is roughly equivalent.
I think the advice you give on things to do before you buy a Solar generation system and how to use the tariffs and devices to optimise effectiveness are fantastic and a wonderful source of really useful information. However I see this exercise as not just pointless but also amongst the worst form of hubris since the time will reduce at the suffering of others. If Energy prices triple everyone suffers except this payback time drops dramatically whereas if they dropped to one third they may never payback within the life of the equipment.