Solar Together is a group buying project that helps householders purchase solar panels for their roofs. It is actually a very sensible scheme and well executed. Householders can be confident that they will get a good price and that their house will not burn down due to shoddy work.
So why do I say it is a “scam”?
Solar Together does not give applicants a Value for Money analysis that compares the cost of electricity supplied by the solar panels with the cost of getting it from a normal electricity supplier. Instead they give a Price Guideline and Personal Recommendation. They suggest,
“Based on this information, the registrant is able to inform themselves and make their own decision in terms of the pricing presented and also the value for money. “
Solar Together Price guideline
- Typical market price for an installation of this size: £5,990
- Generated electricity in the first year: 2,416 kWh
- Number of panels: 10
My Return on Investment Calculation
My annual consumption of electricity is 5500 kWh. So assuming I consume all the electricity produced over the 10 year warranty period my cost per kWh is ~25p kWh. At present I pay 13p kWh for a green tariff.
My expected return on my £6000 investment is,
(Cost of 1 kWh Green Tariff – Cost of 1 kWh Solar Electricity) x Annual Consumption = -£290 per year
The historic return on a relatively safe 10 year investment such as Vanguard Life Strategy 20% Equity is over 5%, say, £300.
Buying solar panels would make me ~£600 per year worse off than leaving the money invested and continuing to pay for a green electricity from my national supplier.
I could assume a longer productive life for the panels or higher costs from a green tariff but these will not make much difference to this analysis.
Why does this matter?
If the State (here the Mayor of London) is going to push products to its citizens then it should be upfront about the costs and benefits.
The vast majority of people that take up the Mayor of London’s Solar Together proposal will be poorer as result and so he should not be shilling it to them.
What should the Mayor do?
Anyone who is serious about avoiding climate change should offset all their carbon production – this costs less than £100 per year for the average middle class family and advocate a carbon tax. It is probably the only way to save the planet.