| Real Life Strategies for Building Wealth

solar panels

For years I passed people’s houses and looked with envy at their roofs.

Okay, not any old roof; I looked at the ones that had nice, shiny solar panels on them.

Usually I’m not a jealous person. I look at someone who’s ‘made it’ and I think that there is an example and hope for me. Heck, I even remember thinking that George W. Bush being the President of the United States gave hope to so many people – if he can, anyone can.

When it came to solar panels though, my envy came from two sides:

  • I was on a crusade to reduce our bills and to do it without loss of quality of life. Generating electricity, using some and selling some, sure sounded like a good thing.
  • The older I get, the more concerned I become about the environment. It seems to me that if we don’t stop messing about and polluting, we’ll soon have to find another planet. Solar panels do have a bit of a carbon footprint but they do generate electricity by converting the energy from the one source that is almost inexhaustible: the Sun. So, having solar panels sounded like the right thing to do.

Then we were paying off debt. Important as it is to keep bills down when paying off debt, spending tens of thousands of pounds on a new roof and solar panels didn’t seem to be appropriate.

Although temptation came our way. Four years ago, a nice young man came to our door and wanted to talk about a great opportunity to get free solar panels. We just had to go to their office and have a talk with someone there.

Who can resist the combined charm of a young man and the opportunity to install free solar panels? (Btw, the ‘free’ part was presented as a government endorsed scheme.) So we went.

From the outset it was clear that this is a set up for suckers. We had to wait and then a ‘proper’ salesman told us we need close to two hours so he can explain what it is about. We didn’t have the time but he insisted, refusing to give us the short version. I’d had enough and just walked out.

It was a scam where companies convince people to have solar panels installed de facto leasing their roofs. Which of course brings limited returns for the house owner and a big, fat headache when and if one decides to sell their house.

We didn’t succumb while paying off the debt.

We decided that after we’d paid it all off, we’d put a new roof and install solar panels. And we did! Almost exactly a year ago.

And since solar panels are an (kind of) investment we decided to report on how we went about selecting a company to install them and on the ROI we’ve had.

Choosing an installer

To select an installer we used a directory website – www.solarguide.co.uk – and contacted three installers.

We selected one national installer, one large installer and one local installer. Experience shows that if we get a range of estimates, we will have a ballpark estimate of costs and everything from there on is up for negotiation.

The first national installer rang and when I said what we wanted, and that we have scaffolding already up, they quoted me £6999 fitted over the phone.

Now I am always suspicious when someone quotes over the phone and even more so when they magically end in £99. I am also more suspicious when they end in £97 in fact because that is really all to do with marketing. But as they were coming round to view, I gave them the benefit of the doubt and made an appointment. In the end, two guys did appear, on time, had a look at the roof and quoted – yes – £6999.

The large installer was rather more professional, took lots of measurements and photographs, clambered up on the roof and recognised the scaffold in their prices. However they quoted for a range of options which were actually all the same except for different panels. Their documentation included a lot of printed spreadsheets and claimed returns on investment. Hmm, we thought, they are trying to blind us with numbers. Rather silly of them really – of course John went through the calculations once he realised that they were all very simple. But they had given us a better idea.

The local installer was also very professional but came in a bit higher. They didn’t try to mesmerise us with a choice which we thought was good – after all if you know which is the best solar panel (or which ones are at the top), why try to make things more complex than they need?

Being local we also thought we would get a better service – after all if something went wrong, it would be much easier for them to fix. The downside of course of using a small company is that it may not exist for too long but the same can be said for any company these days.

We put that thought aside and went back to the local installer to see whether they could moderate their price down a little, which they were able to do.

So that’s how we did it. The company we used was Green Light Energy Solutions Limited.

Costs and equipment

We installed 16 250W panels, generating a maximum of 3.61kW (there is a small loss in the inverter). This cost £5750 but we also had installed a new 16 way consumer unit (a big box with circuit breakers etc.) at an additional cost of £304.50. The old units were well past their sell-by dates and used old-fashioned fuses which are slow to blow and substantially less safe.

Because our house is quite close to an electricity substation, it also turned out that our voltage was well above the recommended 220V. The UK used to use 240V so we were not surprised to see that the actual voltage was 248V!

As most appliances work happily at 220V, we had been wasting 21% of our electricity. We had an electricity regulator installed and this costs £367.50. We decided that it is well worth it and it will pay for itself in three years from the saving made by not wasting electricity.

Return on Investment

The time of reckoning has come. Are you ready for this?

Over twelve months, we’ve had payments of £532.86; furthermore we’ve used electricity we’ve generated to the value of £195.27.

In total, our solar panels have returned £728.23!

This is a ROI of 12.66% (calculating it on the basis of the cost of the panels and the installation only).

I don’t think this is too shabby; we have only one investment that returns better (this is a story for another time).

And you remember that we live in Manchester! (For my readers in the US, Manchester is the UK equivalent of Seattle).

Finally…

I hope that our analysis has convinced you that installing solar panels is worth it and our experience has warned you to be careful and not fall pray of all the shady companies trying to gain access to your roof.

Do you have solar panels and how much do they return?

photo credit: Balaji.B ( 1.7 Million Views and Growing) via photopin cc