by Robert Kyriakides
People ask “What is the pay back?” for solar thermal systems. Well, first and foremost it does have a payback. If you buy coal, oil or electricity or gas the supplier does not offer you any pay back at all. No matter how much gas, oil or coal you buy and no matter how long you buy it for, you never get your money back. You have to service, maintain and renew you fuel burning equipment. Similarly the electricity company never offers you a payback
Various government bodies define sometimes payback as the annual fuel bill savings divided by the capital cost. This is simply inaccurate misleading and wrong.
If you take a proper view of payback, you have to factor in future energy increases, take account of inflation, look at the savings in boiler servicing and the ability to make a boiler last longer any add in the parasitic losses that a solar thermal system suffers. Doing the sums properly most thermal systems offer a pay back of between 6 and 15 years, depending on the fossil fuel displaced, the future fuel inflation factor you use and the amount of hot water you use.
If the product is built as part of the housing infrastructure it will last for around 30 years with minimal maintenance. If the product is built into a home in the course of construction the pay back period declines rapidly.
Although payback is one way of looking at the cost it is perhaps more accurate to look at the return on your investment that solar thermal offers. Typically the financial savings of a good solar thermal system will be equivalent to a tax free return on investment of between 8% and 12%.
Get paid for the renewable energy you produce
The RHI is the new, fixed payment scheme from the Government for the renewable heat you generate yourself. It will replace the current Grant with a fixed payment, which will be paid each year for 20 years.
It could pay you, as a GENERSYS solar water heating system user, hundreds of pounds.
For more information:
The Renewable Heat Incentive -"Get paid for the renewable energy you produce"