A while ago I got a mail from my bank. They offer to fund a photovoltaic system on my house with a special offer. They give a credit upto a specific amount if I use it to install a photovoltaic system, and to pay it back I just have to give them the complete amount of money which I get from the power company when the photovoltaic system is producing power (the state requires the power company to pay a specific amount of money — fixed during 20 years — for each kW/h). They also offer that a specialist visits me to explain the photovoltaic stuff and calculate if all the physical constraints for such an installation are OK.
At first this sounds nice, but I do not trust the words of some random person which wants to get money from me. So I had a deeper look at it.
The roof of my house is still OK, but in some years (maybe 3 – 5) it has to be changed (at least partly). The roof is already 30 years old, so this is OK. If I would install a photovoltaic system now, it would have to be removed and reinstalled when the roof is changed. If the system is financed by the bank, this has to be done by an official specialist (instead of letting a good friend with experience doing it in exchange of my workforce for some renovation project at his house). This means it would be cheaper if I change the roof before the photovoltaic system is installed. I do not have the money to do this completely out of my pocket, so the bank has to finance this.
Letting the cost of the roof aside (which has to be done “soon” anyway), the interesting part now is what do I get when the bank is completely financing the photovoltaic system (maybe parts of the electrical installation need to get updated, as they are 30 years old too). I have to take into account taxes, what needs to be paid back to the bank, what I have to pay for the power, and what I have when everything is paid back.
If the photovoltaic system is financed completely by the bank, the typical calculation is that it takes about 20 years to pay back everything. This assumes I only give to the bank the amount of money I get from the power company for the power of the photovoltaic system. So basically the photovoltaic system pays itself. This sounds great, the problem is that a rough estimation of the lifetime of a photovoltaic system is 20 years (and after 10 years you may have to change the AC converter). The warranty on photovoltaic elements here is 2 years, so far I have not seen any offer where they extend it much (somehow it is hard to find some good pages for private customers, most of the pages I see are either light on info, or target commercial customers). This is not even remotely in the range of 20 years. So after it paid back itself to the bank, it may be broken. And during those 20 years, I still have to pay my complete power bill.
There is also a tax point of view to take into account. Luckily a friend of my sister is doing some tax consulting for private tax issues. The tax stuff involved here is about company taxes (you are required to open a company when you install a photovoltaic system here). This is not specially in the area where she is working in, but I assumed she should know enough about the basics, that I can get at least an overview. I got even more than that. When I talked to her about it, she told me they calculated a similar offer for their house recently. She assumed a photovoltaic installation of 20 T€ and that the bank is financing it completely. The roof of their house does not have the same characteristics than my house, but as the photovoltaic specialists calculate with rough peak sunshine hours anyway, it gives me a rough overview. The good part is, that you do not lose money this way, but you have to pay the tax directly (even if I give all the money from the power company to the bank), you start to earn money near the end of the 20 years.
According to her calculations you will have earned 6 T€ after 20 years, when the photovoltaic system paid itself back to the bank and you had to pay the taxes each month/year/whatever. This assumes that the peak sunshine hours are not getting worse, and that the efficiency of the photovoltaic system stays at roughly the same level during the 20 years. Now let us calculate the amount of money per month and per year you gain when you do this:
So for 25 €/month I have to invest my time into taking care about the tax stuff, have to take care about the photovoltaic system (cleaning, and management stuff in case something breaks because of bad weather or normal usage), have to pay extra money when something has to be done to the roof, and so on. And when everything is finished after 20 years, the photovoltaic system may be finished too (and the rate of money the power company has to pay for each kW/h then is not known, in case the system still works good then). If it is in a state where I have to remove or replace it, I also have to pay the cost of removing it. And I need to get together enough money to get a new roof now.
Now this offer does not sound so good anymore (remember, I also have to pay the power I consume during this time). To me it looks like only the bank and the company installing the system will benefit from it, and I have to take care about all the unpleasant things.
There is for sure an ecological aspect to think about here. It sounds great to produce green energy (I do not know how much CO2 is produced during the production of the photovoltaic system, and if it will produce enough energy to compensate this), and I would do it directly if I would see a sane return of investment, but this offer does not look sane in my current situation.
It seems I have to wait until the prices go down more (and I have some spare money to invest without the need for a bank). Recently I have read that the expectation is that in about 3 – 5 years the technology to print photovoltaic cells can be production ready, which could reduce the price to a tenth of what a photovoltaic cell costs ATM. Investing 20 – 30 T€ is not something I would do from one day to another, 4 – 5 T€ for a similar installation sounds more easy to agree to.
While I am at it: so far I only see photovoltaic info regarding the peak power a cell can generate. To me this does not look interesting. The peak power will be generated most of the time in summer (direct sunlight, no clouds, long sunlight times), but in the summer the consumption of power is less than in winter (less light to use, more time spend outside the house so less time in front of a TV, more BBQ so less cooking in the kitchen, …). More interesting to me would be a good power generation in less than optimal situations like in winter when it is cloudy (but it is probably hard to come up with an useful value, as the average for “less than optimal” varies from location to location). I have seen a report about water heating (attached to the central heating) with solar energy, where a system is used which has a lower peak power, but a better power output in less than optimal weather conditions (round collectors where used instead of flat panels). So theoretically there is the possibility to get more power out in not so good conditions, but so far I did not find any information if it is technically possible ATM to optimize photovoltaic cells to such situations, and if it is if there are some cells available for a sane price.
Tags: amount of money, electrical installation, good friend, mail, photovoltaic system, physical constraints, random person, renovation project, special offer, typical calculation —