Solar panel installers mislead their customers about the payback period. This could be up to six years longer than anticipated. This is evident from research by energy comparator Keuze.nl into the calculations made by installers.
The quotes include electricity prices that are too high and do not take into account the feed-in costs that almost every energy supplier now charges. These are extra costs that people with solar panels have to pay to the energy company and they quickly amount to around 350 euros per year.
For almost all solar installations, the payback period has increased to more than ten years, while installers still report that the investment is recouped within 3, 4 or 5 years.
Quotes too rosy
Martien Visser, lecturer in energy transition at Hanze University of Applied Sciences Groningen, also looked at a number of quotes from solar panel installers. “They are indeed very rosy. Of course they want to sell something. If I do the calculations, I also arrive at a payback period of 10 years.”
The payback time indicated by installers is in reality at least twice as long in all scenarios we investigated
Geert Wirken, Keuze.nl
There is usually no mention of feed-in costs or the possibility that the netting arrangement will be compromised. Admittedly, the calculations are complex and depend on continuously changing rates and levies. Visser: “The installer could in any case say that it is a calculation excluding the costs charged by energy companies and that it is assumed that the netting scheme will not be abolished.”
Due to the increased costs, the government’s goal that private individuals will recoup their sustainable investment within 7 years is no longer achieved. The payback period of 7 years is the tipping point for many people as to whether or not to make an investment in sustainability. Installers who make quotations also know this.
Calculating the actual feed-in costs and your own electricity rates is necessary to find out what the actual payback period is. Geert Wirken of Keuze.nl: “Many installers go all out: they charge too high an electricity price, too high a feed-in fee, and do not take into account all the extra costs from energy suppliers. The payback time indicated by installers is in reality at least twice as long in all scenarios we investigated.”
Supervisory Authority for Consumers & Markets says it does not receive many complaints about misleading calculations, but it does keep an eye on it. “Companies must be clear about payback times,” says Tjitte Mastenbroek of ACM
Industry organization Techniek Nederland says it has ‘no insight’ into calculations made by the installers and that it is up to the installers in question to ‘talk to the customer if the installer has incorrectly calculated a payback period that is too short’. According to Techniek Nederland, solar panels will pay for themselves within 6 to 7 years as a result of price drops.
What is the return time of solar panels?
Yet another number. What about now? The calculation is complex. Solar panels have become cheaper in recent times, but they remain a solid investment. An installation of 12 panels costs about 5,700 euros and can generate 4,200 kWh of electricity. Currently the average electricity price is 27 cents per kWh, but many installers still charge 30 to 35 cents, just those few cents difference saves hundreds of euros per year.
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Wirken: “The installer calculates that the 5,700 euros will be recouped within 3 years and 11 months. However, the reality is different. The installer does not take into account the extra costs for solar panels that energy suppliers now charge.”
Wirken understands that: “This is a complex calculation and there have been many changes in energy prices. Feed-in costs, higher rates and other price differences are not included in the calculation. If these costs are included, the payback period has increased to 10 years and 7 months, which is more than 6.5 years longer.”
Milieu Centraal confirms that the payback period has increased from 5 to 8 years due to the feed-in costs. Energy expert Isabelle van der Ende from Milieu Centraal: “That forecast is based on the current situation. If the energy market changes or if, for example, something happens in China that makes the production of those panels much more expensive. Yes, then that prognosis will of course change. So you calculate with what you know now. But, those panels will be on the roof for 25 years, so it doesn’t matter much whether the payback period is 7 or 8 years. All these years later you still have free electricity. Solar panels are good for the climate and your wallet. So just do it. That’s actually our message.”
Keuze.nl has a calculation module on the website to calculate a realistic payback period. The costs of the solar panel installation are compared to current energy contracts, including the current feed-in costs. This also contains assumptions, for example that the panels face south and that the netting arrangement will remain in place. If the netting scheme is phased out or if the electricity price falls further, the payback period will become even longer.
Wirken also advises not to use more solar panels than you use in electricity. The old advice ‘fill your roof completely’ is outdated. Anyone who supplies more solar power than they need will only receive next to nothing for it, often only 5 to 7 cents. “You will no longer earn back the extra costs for installation and the extra costs charged by your energy supplier with the feed-in tariff.”
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