A savings figure on a solar quote is a claim. If the numbers behind it are not on the page, nobody can check it, and a customer with two quotes has nothing left to compare but the price.
Part of the series What a solar quote should contain.
Two honest quotes, two different savings
A homeowner has your quote and another firm's for the same roof. Theirs shows a bigger saving. Neither of you made it up. One assumed the family uses half the solar at home, the other assumed more. One valued export at the rate the customer's supplier pays, the other at a rate from a leaflet. The customer cannot see any of that, so they ring you and ask why yours is lower.
A saving is made of five inputs. A quote that shows them is worth more than a quote with a bigger total.
The five inputs every savings estimate is made from
- Generation. How many kilowatt-hours the panels make in a year.
- The split. How much of that the house uses while the sun is up, and how much goes to the grid.
- The import rate. What the household pays per kWh for electricity it would otherwise have bought.
- The export rate. What the supplier pays per kWh for electricity sent out.
- Time. Panels make a little less each year, and electricity prices are assumed to stay flat or to rise.
Change any one and the saving moves. That is why each belongs on the quote.
Generation: the roof first, then the weather
Start with the size of the system in kilowatts peak: the number of panels multiplied by the rating of each. Then apply a yield, the kWh each kWp makes in a year where the house is.
The solar savings calculator on this site works the yield out from first principles. For every half hour of the year it finds where the sun is for the place chosen and how squarely it hits a panel at that pitch and bearing, takes fifteen per cent off for the inverter, wiring and heat, and then, because Britain does not have clear skies, multiplies the total by a clearness factor of 0.47. A south-facing roof lands at about 900 kWh per kWp a year, the flat figure Installa falls back on when it knows nothing else about a roof.
Three things move that figure. Direction: an east or west roof sees the sun at a glancing angle for half the day, which over a British year costs roughly a quarter of the output compared with due south. Pitch: anything between about 20 and 45 degrees is within a few per cent of the best. Location: the further north, the lower the sun and the fewer the kWh.
A UK quote should use the MCS method instead, based on the SAP 2012 tables: postcode zone, pitch and orientation, with a shade factor for the trees and chimneys the calculator knows nothing about. That is why a quote's kWh and the calculator's differ a little, and why the quote should say which method it used.
The split is where the money is decided
Every kWh the house uses while the panels are generating is a kWh not bought at the import rate. Every kWh it does not use goes to the grid at the export rate. The share used at home is the input that matters most and is known least. A house empty from eight until six uses less of its solar than a house with someone in all day. A battery, or an electric car charged in daylight, uses much more. The calculator starts at 50 per cent, Installa's starting point, and lets you drag it either way. Ask how the customer lives and set it from the answer.
Two tariffs, both from the customer's own paperwork
The import rate is on the bill. The export rate is set by whichever supplier pays the customer under the Smart Export Guarantee, which Ofgem administers, and the rates differ a great deal between suppliers. The calculator opens with Installa's UK starting figures, from the Ofgem price cap and typical Smart Export Guarantee rates. They are there so the page works before you type anything, not because they are right for this house. Put in the rate from the bill and the rate from the export tariff.
From a year's saving to a payback
Year one is the kWh used at home multiplied by the import rate, plus the kWh exported multiplied by the export rate. The simplest payback is the cost on the quote divided by that annual saving: a system whose total is eight times its annual saving pays back in about eight years.
A careful estimate goes year by year. Panel output falls by 0.5 per cent a year, so each year saves slightly less than the one before unless prices rise. The calculator adds the years up until the running total passes the cost, reads the payback off to a tenth of a year, and says so if it never gets there inside 25 years.
A worked example, with its own numbers
These inputs are this example's, not a recommendation. Ten panels of 440 W, so 4.4 kWp. A south-facing roof at 35 degrees in the Midlands, taken at 900 kWh per kWp. A household that uses about 3,400 kWh a year and is out in the day, so 40 per cent of the solar is used at home. An import rate of 25p per kWh, an export rate of 15p, and prices flat.
- Generation: 4.4 kWp multiplied by 900 kWh per kWp is 3,960 kWh a year.
- Used at home: 40 per cent of 3,960 is 1,584 kWh. At 25p that is £396 not spent.
- Exported: the remaining 2,376 kWh at 15p is £356.40 paid in.
- Year one: £396 plus £356.40 is £752.40, about £63 a month.
- Payback: take the total on the quote, including VAT, and divide it by £752. If the total is eight times the saving, the answer is eight years, and a little over once the fall in output is counted.
- Over 25 years: with output falling 0.5 per cent a year and prices flat, the year-by-year sum comes to about £17,700.
Now change one input. With export at 5p instead of 15p, the same house saves £396 plus £118.80, which is £514.80 a year, and the payback stretches by nearly half. Nothing on the roof changed. That is why the export rate belongs on the quote.
What a quote should show, and what to do with it
If you are writing the quote, print the inputs beside the figures: the kWh a year and the method it came from, the share used at home, both rates, the price rise assumed or the words "prices staying as they are", the fall in output, and a line saying these are estimates and not a guarantee. Keep it apart from the price, which carries its own facts: subtotal, VAT, total, the deposit due on acceptance and the date the quote is valid until.
If you are reading one, put its kWh, its share used at home and its two tariffs into the calculator with the total from the quote, and see whether the saving and the payback land where the quote says. If a quote does not give you those numbers, ask. A firm that worked them out can tell you in a minute.
Installa prints the estimate and its assumptions for you
- Stop typing a yield in. The saving is worked from the design's own generation estimate. For a UK job that is the MCS (SAP 2012) method from the postcode zone, pitch and orientation, with a shade factor from modelled irradiance where there is coverage for the roof.
- Stop guessing the tariffs. Each quote carries its own import rate, export rate, share used at home and yearly price rise. The starting figures come from the job's market with their source noted, and you change them to the customer's own.
- Stop deciding for the customer by accident. Nothing about savings appears until you switch "Show these savings to the customer" on for that quote.
- Stop writing the small print. The first-year saving, the payback and the 25-year figure print on the PDF and the customer's online quote with the basis beside them, ending "these are estimates and not a guarantee".
- Stop working the payback out on the side. It is worked from the quote's own total, year by year, and the online quote draws the savings adding up against the cost.
- Stop leaving the money to a covering email. Subtotal, VAT at each rate, total, deposit on acceptance and the date the quote is valid until are on every proposal.
Five inputs, all on the page, and a payback the customer can check for themselves. That is what the savings block on a quote is for. See how quotes and proposals in Installa work, or try the solar savings calculator.