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solar panels who is paying?


Evil Sid
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lead article on todays news page.

 

http://www.warrington-worldwide.co.uk/articles/18727/1/Council-to-fund-52m-solar-heating-project/Page1.html

 

it says that the council has been asked to fund it to the tune of £5.25m.

 

it then says that golden gates housing will buy the equipment and that the council will buy it back from them.

 

later on it says that the council will get a loan for the £5.25m.

 

so who eactly is paying for all this as there seems to be a bit of confusion in my mind. (well it is early on a saturday morning but that is just an excuse)

 

they say that there will be a saving on energy bills of around £223 per year.

 

so 1500  houses with equipment cost at around £5.25m works out around £3500 per house and means that the solar panels will have paid for themselves in a little over 15 years (in savings to the tenants that is providing energyy prices remain stable). mind you if the houses are empty then and surplus energy revenue goes to who????

 

Golden Gates, the council, the loan company, brown envelopes.

 

Just out of curiosity will the council get PPI on the loan and will they get all those annoying phone calls about it later.

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I think the answer to who pays for this is all of us, unless they have a magic pot of money.

 

 

it says that the council has been asked to fund it to the tune of £5.25m.

 

What I dont understand from the story is just who is asking them to do this?

It certainly wasn't me that asked. Anyone prepared to own up?

 

 

 

Bill :)

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It wasn't me either Bill.

I'm confused though... if Golden Gates can afford to buy it all in the first place and if the figures are correct which way having the solar panels will result in a surplus of moeny over x number of years then WHY are they not keeping control themselves rather than selling them on to the council.  Golden Gates seem a very good company with regards to finances etc so maybe they realise that in reality it's not such a good investment.

I wonder how they know how much cloud cover is expected over the next 20 years though when the met office etc can't even get the short term weather forecast right half the time :lol:

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There's no way these panels will EVER pay for themselves - never mind show a surplus - since the energy they generate is being given to the tenants and it's they who will be quids in, not the council tax payers who are going to have to repay the loan.

 

GGHT tenants already get subsidised rents, since GGHT was gifted over £1billion worth of council tax payers property and does not charge rents which will provide for the eventual replacement of those properties - now they're getting a bung of another couple of hundred quid a year at the expense of the rest of us.

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There's no way these panels will EVER pay for themselves - never mind show a surplus

Yep which is why I questioned the fact that Golden Gates are installing them all then selling them on to the council :wink:  I'm guessing the price the council may pay also includes the installations costs too... or maybe not.

It doesn't seem a very good council investment on over £5 million. 

 

Then again what to I know about investments and the sunshine as I don't have any wads of spare money and I get hay fever :)

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Even the figures being quoted come straight from the solar panel supplier and of course are extremely optimistic at best, make no provision for maintenance, regular cleaning of the panels (dirty panels generate next to nothing), replacement of failed or damaged panels, assume that the panels performance doesn't degrade over time (they do!), and assumes that the panels will even last 15 years (there are NO 15 year old panels of this type in existence, so there is NO data on their useful lifespan).

 

If you're really determined to spend £3500 on a house then there are far more cost effective ways of making these sorts of energy savings in ways that will continue to yield those savings for far more than 15 years..

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Even the figures being quoted come straight from the solar panel supplier and of course are extremely optimistic at best, make no provision for maintenance, regular cleaning of the panels (dirty panels generate next to nothing), replacement of failed or damaged panels, assume that the panels performance doesn't degrade over time (they do!), and assumes that the panels will even last 15 years (there are NO 15 year old panels of this type in existence, so there is NO data on their useful lifespan).

You can also expect to replace the inverter after about 10 years at a cost of £1000 approx.

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My point is this. Are golden gates housing are going to buy the panels with their own money.

 

The council are being asked to fund the panels.

 

The council is going to get a loan to fund the panels.

 

The council is going to buy the panels from golden gates housing.

 

Now then if the council is going to fund it from the start then THEY and not golden gates housing are actually buying the panels.

or

The loan that the council has taken out will be given to golden gates housing so that they can buy the equipment.

then

The council is then going to buy the panels from golden gates housing that they have already paid for or is my logic wrong somewhere along the way.

 

Maybe it is the way I am reading the article or I am interpreting it wrongly.

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Can't for the life of me understand why WBC are involved at all! GGHT are a completely separate body to WBC with their own assets and revenue streams.

 

If GGHT want solar panels, they should buy solar panels. If they don't have the cash on hand then they should either negotiate payment terms with the supplier or take out their own loan.

 

If they can't get their own loan at rates comparable to those WBC can get, then that's because the lenders see them as higher risk and more likely to default. In which case, why the hell should local council tax payers take on the risk?

 

Maybe WBC would take out a multi-million pound loan and give the money to me if I asked nicely enough?

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Having just read all the other comments on here then it makes even less sense what they (WBC and Golden Gates) are proposing to do. Maybe we are all reading it wrong and there will be another press release from the Council and/or Golden Gates explaining it all again.......

 
Maybe WBC would take out a multi-million pound loan and give the money to me if I asked nicely enough?

Get in the queue Inky... I need it more than you :wink:

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What gets me is that golden gates can approach the council and get a £5m+ loan quite easily it seems.

 

I asked about a grant to get my mother a stairlift fitted and was told it can take anything from 12 to 18 months to facilitate.

A second hand one, fully reconned and fitted would cost between £500 and £750 a new one would be in the region of £1200 to £1800 depending on make and model.

Not even the interest on a £5m loan over a year.

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I have a property in Bewsey that backs on to a GGHT property. Back in February, the fence between the two houses blew down in the high winds..... GGHT are responsible for the fence, but I offered to replace it (it was about £250 so not a massive amount).... no they said it is planned into the works to be fixed....

 

Middle of July and it is still not repaired and has passed 3 confirmed dates and has now been passed to an outside contractor to sort.

 

I wouldn't trust them with anything; particularly where money and planning and implementation is concerned

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Most of the GG flats and bungalows already have solar panels fitted.

 

I used to recall a saying, you can tell a private house on a council estate as the owners have made an effort.

 

These days you can tell a council house from a private house as they have so much money spent on them a home owner could not afford. New windows even though there was nothing wrong with the old ones, drives, new kitchens, now solar panels.

 

I am having a rep round on Monday to sell me some solar panels, bad idea.

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Looking at the figures quoted today WBC are putting up £5.25million (which they're going to be borrowing and on which they'll be assuming the risks of default or non-performance by GGHT or their supplier) and have been told to expect a surplus of £1.4million over 20 years.

 

Does nobody at WBC know how to do a compound interest calculation????

 

That's an annualised return on investment of only 1.15%!!!!!

 

And how much does anybody think the £1.4million surplus (assuming it's actually acheived) is REALLY going to be worth in 20 years time? Half that? A quarter?

 

It's also worth pointing out that the pilot scheme on the first 600 houses not only picked the houses most suitable for solar panels (south facing roof, no large trees or other sources of shade, easiest access for installation), but also took place in 2011 when the guaranteed feed-in tariffs to be paid for surplus energy being sold back to the grid were at 3 times their 2014 level.

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Nothing to do with interest rates Wolfie, that's what annual percentage return the £1.4million projected surplus works out at over 20 years.

 

As a close approximation - £1.4million divided by 20 years is £70,000 a year return on the £5.25million, which is 1.33%. This is reduced further to around 1.15% by the effect of compounding monthly as is standard rather than just annually as in the example above. For comparison, with bank interest rates still at an all time low, it is today possible for any ordinary investor to get a 3.25% annual rate on a 5 year bond with Vanquis bank. The £5.25million invested at that sort of rate would give a guaranteed return of almost £1million in just 5 years, and is available to any Tom, Dick or Harry. A large investor with £5million to throw around would be able to get a far better guaranteed return than that!

 

One would hope that the finance costs and interest rates of the £5.25million loan are fixed and guaranteed for the entire 20 years - and that the loan is fully insured against default by any of the parties involved in the project - and the quoted £1.4million surplus is after all of these costs are taken out. Anything else really would be criminally irresponsible with such a low anticipated profit margin.

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Well it seems the executive board think it's a good idea as they voted unanimously to approve it on Monday. 
Good to see that Clr Paul Kennedy is using his brains though and questioning the lack of data on how the scheme will eventually pay back the money and about monitoring its effectiveness. 

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So does anyone have any more details about this scheme?

 

Is the interest rate on the loan fixed for the entire term?

 

Is the loan insured in the event that GGHT or their suppliers default, fail to perform, suffer installation delays or equipment failures, or any other circumstances which may impact the return on the investment?

 

Exactly what feed-in tariff rate are the calculations of the financial surplus based on? and how long are those tariffs guaranteed for?

 

How much does the project costing include for maintenance, cleaning, replacement of failed equipment, remedial works and strengthening to existing roofs, and staffing and training costs (including pension costs) for the permanent jobs to be created?

 

What allowance has been made in the projections of the power generated to allow for degraded performance of the panels over time?

 

What financial provision has been made to provide for meeting the loan repayments in the event that a single year of poor weather substantially reduces the output of the panels and therefore the feed-in tariff income produced?

 

There are MANY more questions to be asked, and a project with this marginal a return on investment ALWAYS needs the closest possible scrutiny and full guarantees of any areas of uncertainty.

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All very well this discussion has brought up quite a lot of questions and one or two, possible, answers apart from the one I asked.

 

Who is actually paying for the panels. I have now read about three differing articles about this and to me it still seems confusing.

The end result that i have  come up with is that the council will be buying the panels from golden gates housing that golden gates housing purchased with money that the council provided by taking out a loan. so in effect the council are paying for the panels twice. Once by providing the original funding and a second time when they buy them back from golden gates housing.

 

it seems the only part golden gates play in the purchase is to approach the manufacturers with a view to getting a quote for X amount of solar panels delivered and then fitting them to their houses. The only money golden gates will be spending of their own will be to advertise the fact that they are the green housing people.

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But councillor Parish has told us that the nasty Tories have taken all their money away; although never actually said that although they may be getting less they are still raking in more council tax from all the new houses and cutting services saving money that way.... so by my reckoning, that is one out and two in.... :)

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Who is actually paying for the panels. I have now read about three differing articles about this and to me it still seems confusing.

The end result that i have  come up with is that the council will be buying the panels from golden gates housing that golden gates housing purchased with money that the council provided by taking out a loan. so in effect the council are paying for the panels twice. Once by providing the original funding and a second time when they buy them back from golden gates housing.

 

it seems the only part golden gates play in the purchase is to approach the manufacturers with a view to getting a quote for X amount of solar panels delivered and then fitting them to their houses. The only money golden gates will be spending of their own will be to advertise the fact that they are the green housing people.

I read it as meaning Golden Gates were buying and installing them and then once the work was complete they were selling them on (already fitted)  to the council to maintain and get the 'profits' from. 

You're right it is all very confusing and now I haven't got a clue

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