Are solar panels really self-funding?

    • #16895 Reply

      Mark M

      I have been told that there is a scheme that would mean the solar panels ‘pay for themselves’ and in addition to providing us with reduced energy bills?

      Is this correct?

    • #16896 Reply


      Here is a real world situation that shows why you should treat any claims of “Self Funding Solar Packages” with care.

      Went to see a lady yesterday (Thursday).

      On Wednesday she was approached in her local shopping centre by a canvasser working for a large national solar company. The canvasser claimed they were doing solar panels that paid for themselves.

      She agreed to an appointment. An hour later she was phoned by the company to arrange an appointment. By teatime one of their sales reps was sitting in her living room. Two hours later she signed up for a system. The next day they phoned to arrange a survey and installation date.

      Total time from initial contact less than 24 hours.

      However, fortunately, she felt it was a bit rushed and went online to do some research. She found my site, hence my visit yesterday.

      What she had signed up for was a £6995 loan at 9.90% payable over ten years at £95 per month…..for a 12 panel 3.00 Kpw system.

      Although the salesman had not told her the make or model of panel or inverter he did tell her it was “the best German model than money can buy”. She was also under the impression the loan was over seven years not ten. She was also told not to worry about the monthly payments as the money from the scheme would cover them and she would make over £23,000 during the lifetime of the scheme.

      Now if we stop for a minute and look at the simple maths here.

      It’s a 3 Kwp system. >From my calculations on her roof that would generate 2269 Kw of electricity per year.

      For that she would be paid an annual FIT tariff of £348 plus potentially save about £127 off her electricity bill.

      So that’s a total annual benefit of £475.

      The monthly direct debits were set at £95 which is an annual cost to her of £1140.

      So in year one she would have paid out £665 MORE than the panels earned her.

      Even factoring in inflation by my workings out at no point in the ten years of the loan would the panels earn more than the repayments. However, as we all know you can write a spreadsheet to show any outcome you want.

      So after allowing for the inflated initial cost of £6995 plus £4405 of interest her 3.00 Kwp system would have cost her £11400.

      To make matters worse, she has a flat roof with a 30 + year old felt covering which should really have been replaced by now. If panels were installed now at some point in the near future they would need to be removed to allow re-felting then re-installed at which point I am pretty sure the warranty from the felt installer would be invalidated.

      A loan for solar can work. But only when the price of the system and the rate of interest work together.

      If you need to finance a PV system, then find the finance yourself first before inviting companies into the quote.

      • #16946 Reply

        Mr Kerry Davies

        I have purchased my 2.0kw system last year after being told it was self funding and I would get free day time electric.
        Neither appears to be true, after taking out finance I seem to be spending more money than I will get back

      • #16947 Reply


        It has really broken my heart over the last few years that the shiny suited sharks have arrived in our wonderful industry. Most solar companies are good, but just like any industry, the few spoil it for the many.

        To anyone reading this, research, research, research and get three quotes and go for local companies who can give you local testimonials.

        Solar panels are great when the technology and costing are done properly.

    • #16898 Reply


      I get this all the time in and around Boston in Lincolnshire, too many companies selling solar PV systems on finance with misleading claims of self funding, a lot of these companies are not regulated by the RECC or the MCS.

    • #16903 Reply

      GD Energy

      As far as we are aware here at GD energy, under MCS guidelines you are not allowed to suggest to the customer that their FIT or RHI payments can cover the cost of any finance for the product. I have come across companies such as the one mentioned below and the levels of miss-selling and bad practice in the industry are still worryingly high. As the old saying goes, if it sounds too good to be true…….it probably is.

    • #16912 Reply


      True savings for a domestic property using 3500 kWh of electricity per year and having a 4kW solar PV system in Lincolnshire.

      Other factors to take into consideration:

      1. Roof facing South (best way to face the solar panels as this generates the most power over the day, others may say that facing West is best because you us more of the generated power when at home during the late afternoon / evening)
      Facing the solar panels East or West would reduce the total generation by approx 20% from facing south.
      2. Roof pitch 35 degrees (best pitch to at)
      3. Shading issues (NO shading issues in this case)

      Property location
      Lincolnshire is Zone 11 so the factor we use is 892 this equals the number of kWh the system will generate per every 1kW of Electric solar PV installed.

      Therefore a 4 kw system will generate 892 x 4 x 1 = 3568 kWh for the first year.

      Your average electric bill per year.

      3500 kW x your price per kW £0.12p as an example
      3500 x 12p = £420.00 + VAT at 5% + Standing charge.

      The government says you’ll use 50% and export 50% of the total generation, so therefore 50% of the 3568 is 1784 kW please take this figure with a large pinch of salt, as I’ve found out that the majority of people don’t save this amount off their electric bills.

      A true rule of thumb is that you’ll save is between 26% to 34% off the total consumption per year of 3500 kWh, eg. 910 kWh to 1190 kWh, this is a big difference from 1784 kWhs.

      A true saving would more like to be 1200kWh x 12p = £144.00 per year but can vary from home to home.

      Question for you to think over
      If you’re only saving a 3rd off your total consumption why install a 4kW system on your roof?

      I typical 4 kW system will generate 3568 KW per year in Lincolnshire as per example and I’m only going to use 1200 KW within my own home. The cost of a 4KW system would normally be between £5K to 6.5K depending on materials used and size of the company who does the install. This for a normal string inverter with a mid range solar panels and standard roof mounting system.

      Now ask yourself a few questions are you going to stay the property where the solar PV system will be installed as this is a long term investment?

      Do you need to finance the solar PV system, if yes what is the interest rate on the loan, and will this wipe out any gain you make from the solar panels?

      The number of years to pay off the solar PV system.

      Other possible saving can be made within the home like using energy saving light bulbs; this could save you up to 1 kW per day over the year, again depending on how many light fittings you have in your property and how long they are left on for.

      Automatic switching units not naming anyone but there are several on the market, these units divert excessive power from being exported to the National grid and send them to your immersion heat element in your hot water cylinder.

      The standard home has a 110 litre water tank and the possible saving are between 600 kW to 800 KW per year. To put this into context in savings 700 kw x 12p if using electric = £84.00 and if using gas 700 kW x 3.4p = £23.80

      From the table below here is what I would recommend to my customers if they were thinking about installing solar panels here in Lincolnshire.
      Electrical usage per year Size of Solar PV system Approx cost

      2000 to 3000 kW per year 2.0 KW system £3 to £3.5K
      3000 to 4000 kW per year 2.5 KW system £3.5 to £4.0 K
      4000 to 5000 kW per year 3.0 KW system £4 to £4.5K
      5000 to 6000 kW per year 3.5 KW system £4.5 to £5K
      Above 6000 kW per year 4.0 KW system £5 to 6K

      All prices are approx and for a normal string inverter, standard roof mounting kit and Mid range panels (£150 to £200 per panel)

      Beware of self funding solar Panels companies, they usually sell a 4 kW system for over £8K and charge high interest rates as well. The money received from the FITs will never cover the cost of the loan.


      4 KW system cost £8K on a loan
      Monthly repayments £95 for ten years.
      1st year repayments £95 x 12 = £1140.00
      Total payable £95 x 120 months = £11400.00 for the system.

      Savings on electric bill as from above £144.00 for the first year.

      FITs payments (date 18/07/2015)

      Total generation 3568kW x 12.97p per kw = £462.76
      Export 50% deemed 3568/50% x 4.8 = £85.63
      Total fits £462.76 + £85.63 = £ 548.39
      Loan for first year £1140.00
      FITs + In house savings £548.39 + £144.00 = £692.39
      Shortfall for loan £1140 – £692.39 = £447.61 for the first year and so on for ten years.

      So my advice is do not go down the self funding solar PV route the figures don’t add up.

    • #16948 Reply

      Lincolnshire Solar

      Here are a few numbers to try for misselling of solar panels:

      Consumer Reclaim
      0800 988 8822

      Most work on no win no fee, and if you need a report doing on your solar PV system drop Stuart an email for a good installer local to you.
      Please keep us all informed of the outcome.

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