Well ok I dont live in Leith any more. So its should be Sunshine on Corstorphine but thats not quite so catchy.
Today im going to discuss why the "Feed in Tarrif" scheme make solar panels a Profitable endeavour, even in "Sunny Scotland"
Here the link to the FITs info again as its worth checking out in detail
I installed a 3.6Kw system about the most i could fit on my roof. So effectively that means the Government/Energy Supplier will pay me 41.3p for every Unit I produce over the next 25 years.
Now for every unit i produce there 2 paths it can take
Path1: I use the electricity. If i use it then for each unit I produce i effectively save myself the 11p that it would have cost me to buy the unit from my electricity supplier + i get paid 41p though FITs meaning that, that Unit generated me 52p profit.
Path2: I dont use the electricity. If i dont use the electricity then i sell it back to the national grid where i will be paid 3p per unit + the 41p through FITs meaning that, that unit generated me 44p
Next up is there is reasonable data on what amount of electricity you can expect to generate for Edinburgh, and this web site http://re.jrc.ec.europa.eu/pvgis/apps3/pvest.php allows me to see that in an average year in Edinburgh, for a house with a roof pointing 50degrees off south in a westerly direction and a roof slope of 20 degrees (the info on my house) That i can expect to generate 2650 units a year.
Now Lets assume i use half the electricity 1325 x 0.52 = £689
+1325 x 0.41 = £543
Now the Panels will degrade over time but they are guaranteed to 80% after 25 years. But in all likely hood this will be more than balanced by the fact that FITs payment of 41.3p is index linked and Electricity costs are likely to rise above inflation. In fact with FITs rising at 2% and electricity rising at 6% a year 1200 turns into 1750 by year 25 (even with panels operating at 80%)
My installation costed a little under £15000
So effectively for a Cost of £15000 I generate £1200 or 8% return each year
Lets look at 2 examples of my return versus investing the 15000 installation cost.
If you take the 15000 and find an account that will pay 6% you will have £64000 after 25 years
If you Fit the solar panels and invest the £1200 each year into a 6% account you end up with £65000
If you take the 15000 and find an account that will pay 3% you will have £31000 after 25 years
If you Fit the solar panels and invest the £1200 each year into a 3% account you end up with £43000
Either way you end up with more money after the 25 years. Its only if you can find a higher than 6% return on your 15000 that you might have been better off investing your money.
And none of that takes account of the fact that your contributing to a Greener Environment.