New 21p feed in tariffs
The UK government has reduced the Feed in Tariff for PV solar installations installed after 12th December 2011 from 43.3 pence/kWh to 21 pence/kWh. The question that immediately comes to mind is: Is it now worth installing a solar PV system? The following figures may help you answer this question.
Back in July 2010 we received a number of quotations that estimated the income from our 3.78 kWp PV system we eventually installed for £16075. The quotation estimated £1627 per annum income as follows:
By a simple calculation, this meant that we would pay back the original investment in less than 10 years.
However the actual income for the first year was significantly higher at £1955 as follows:
If this annual income continues it will pay back the original investment in just over 8 years.
On further analysis the first year was considered low, based on average sunshine figures, see: ‘Actual Generation - High or Low?‘, the average annual income should be considerably higher at £2313 as follows:
If I am correct about this link between sunshine hours and kWh our PV solar system may pay back the original investment in less than 7 years.
The original guidance for estimating the number of kWh generated in a year by a solar PV system was very conservative. In the first year our system generated 25% more than the original estimate. I now consider the first year a poor year, I expect an average year to be 50% higher than the original estimate.
At the 21 p/kWh Feed in Tariff this average annual income will come down to: £1278 as follows:
The cost of an equivalent PV solar installations have already significantly reduced. The challenge now for the PV solar industry is to reduce its costs so that a 4 kWp system can be installed for less than £12000, it may then be possible to pay off the original investment in less than 10 years.
Beware, we are on the English South Coast, probably one of the best area in the UK for PV solar. It would be very interesting to get generation data from other locations in the UK to validate the link between sunshine and kWh. If you have a set of monthly figures for elsewhere in the UK please get in touch.
|© J. Ansell 2015|