Thursday, March 29, 2007

Payback Time

There is an interesting letter in the May edition of Homebuilding & Renovating from Jonathan Belsey, taking me to task for an article I wrote about solar panels, which appeared in the March edition.

He writes: Although the article gave a nice summary of the available technologies, my heart sank when I saw that, as usual, the author (that’s me he’s talking about) was going to focus on return on investment as the major issue of the article. Yes, even with government grants, solar water heating and power generation are expensive and it will take you many years to recoup the money that you have spent. Why is it, though, that only alternative technologies come in for this treatment from the selfbuild press? Why doesn’t your buyers guide on showers in the same issue of Homebuilding & Renovating tell me how long it would take me to earn my money back? Well, of course, for the simple reason that I will never recoup my investment on a new shower. The same can be said of most other items we build into our houses.

It’s not the first time I have heard this criticism levied. And, in truth, I have a certain amount of sympathy with it. But ultimately, it really doesn’t stack up as an argument, because everything you fit into a house serves some purpose. A shower, for instance, is designed to get you clean: there might be cheaper ways of getting yourself clean — a bowl of water, for instance — but they aren’t as good and most people would choose a shower every time. Same with doors, lights, floor covers, kitchen units and stairs: they are all there because they serve some useful purpose.

But what is the point of a solar panel if not to produce hot water or electricity? Solar hot water panels should be looked at together with boilers. When you choose a boiler, you look for something that is reasonably priced and reasonably efficient at what it does. Looks and size may come into it, just, but the choice is largely down to cost effectiveness, with a hopeful look at comparitive environmental credentials as well. Why should you judge solar hot water panels any differently? They are a supplemental heating source, not a piece of environmental sculpture. If you are rich enough to be able to ignore the commercial realities of fitting solar panels, all well and good, but the great majority of selfbuilders aren’t and they have to weigh up the costs very carefully.

So, in my book, payback time remains a critical tool with which to judge all the renewable technologies. Without such an analysis, we have no way of judging which technologies represent good value.

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8 Comments:

Blogger oliverphilip said...

Just a note to sy many thanks for a brilliant and relevant blog ( and Bible) from a very slow housebuilder.

8:21 pm  
Anonymous andrew ramponi said...

I second the opinion that this is a great blog, full of insight. But can't agree with the justification for expressing energy costs, and therefore values, purely in financial terms. Why are the myriad nebulous though quite normal aesthetic values which may support the extra cost of buying a certain kitchen or bathroom so different from whatever values, other than financial, that might support an energy choice. Is it because the real costs of energy are actually so out of sight that we put them out of our minds. Or, maybe its because we don't really believe there are significant costs other than financial, to energy. I'm not sure, but I dont think finance is really at the bottom of it.

10:19 pm  
Blogger Mark Brinkley said...

I think you are looking at it with green spectacles on. If the payback was just three years, then no one would be complaining about the publication of payback times, would they? Quite the reverse.

2:17 pm  
Anonymous andrew ramponi said...

I didn't intend the comment as a criticism of publicising payback periods. It is obviously useful. Interestingly, with windows, the payback isn't a feature, though they still sell double glazing as an energy saving item. How did the industry manage to sneak that one in? Am I in fact looking through green windows...

10:50 pm  
Anonymous Jonathan Belsey said...

My letter to the page was actually quite ruthlessly edited. The point that I really wanted to make was that we basically make purchasing decisions based on our own needs and priorities and that if I choose to spend £2000 on a shower instead of £200 it is because I value the extras that it offers. The same basic rule applies with a "green" purchase. If I elect to tile my roof with photovoltaics (at huge expense), I would be very stupid if I expected it to be self-funding - at least within the short to medium term. The decision to do this would be made because it is part of a move towards carbon neutrality that I have chosen to make. My point was that the fact that it will ultimately pay back its purchase price should be regarded as a bonus, not the primary reason for spending the money. In this respect, microgeneration is unusual, because very few other purchases will ever repay their investment, however long you keep them.

9:53 am  
Blogger Mark Brinkley said...

Nice to get some direct feedback, Jonathan.

9:31 pm  
Blogger katherine said...

does anyone know anything about the carbon payback of these things. i.e. how long it would take (in terms of carbon emissions saved through using a 'renewable' system rather than conventional grid electricity) to re-coup the carbon and waste produced in the manufacture of materials, distribution, installation etc?

Surely that is the type of 'payback' that is important rather than financial?

6:53 pm  
Blogger www.thezeitgeistmovement.com said...

Hi,does anybody knows good website where is proved payback time for solar panels and rooftop wind turbines in Finland?
I have read that after payback time gomes electricity for free of charge.My problem is my knowledges in mathematic is not best and I do not knew much about W;A;V; I am not electrician or engineer.

Sorry,about my bad english and that I use for username the name wich not belongs to me.But,I try to make promotion for the Zeitgeist movement and brake brainwash in mainstream media.
elektritsaabtasuta.blogspot.com

9:54 pm  

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