Cost and return

When it comes to renewable energy schemes, I find people are usually coy about the costs and rosy about the returns.  So in this post I have tried to set out as accurately as I can the bare facts relating to my set up.

Of course, this turns out to be not as simple as it seems: having the time and inclination to do the drawings for the planning application saved on paying someone else to do it; having a tracked excavator saved hiring one for digging the pit below the turbine; materials were sourced at auctions at less than true cost where possible, ... and so on.  So even with the firm intention of disclosing everything, circumstances particular to me will mean my costs will not necessarily be indicative for someone else.

Stating what the financial returns have been is a simpler matter than dealing with the costs, so we'll start with those: - overall it has worked out that instead of me paying Swalec, our electric utility company, £1,022,  which was the all inclusive bill for 2013 (daily standing charge and tax included), in 2014, with about the same total energy consumption and the same tariff charges, I paid them £592.  So that was a saving of £430.

 On top of that saving, they paid me £996 in Feed in Tariff and Export tariff for the energy I generated.  

So, to give two different ways of looking at these figures: 

• I had all my electricity for 2014 free and additionally I'm £404 in credit.  
• the worth of the turbine in 2014 was the sum of the saving from grid energy not purchased (£430) plus the revenue from tariffs (£996), ie £1,426.

But 2014 was a wet year and therefore may prove to have been more productive than the norm. Only time will tell.

Turning now to costs: below is a record of the expenditure incurred as the project was implemented during 2012 and 2013.  From the outset, I had wanted to see exactly how much the whole project ended up costing and with that intention, I kept a pathologically meticulous record of everything spent.

A word about VAT:  I had hoped that VAT would be chargeable at 5% and part of the reason for keeping such a meticulous record was to aid reclaiming the difference from the point-of-sale rate of 20%.  However, after a tedious correspondence, HMRC¹ eventually ruled that: ...since micro-hydros no longer came under the Micro Certification Scheme (MCS), under which they had qualified for a 5% rate, and were moved from that scheme to the ROOFIT² scheme in Dec 2012, - a move which opened up the way for people (like myself) who were not MCS accredited to do the installation, ... the 5% rate could only apply if an accredited installer did the installation.  Does that make sense ? - not to me, but what can one do ?

The costs given below therefore include VAT at 20%, where it was payable, and they also include the cost of carriage to bring everything on site.  In the case of the Powerspout turbine and spares, the cost also includes UK import duty.

Two grand totals are given at the bottom:

• 'All in' cost for installation as completed, with spares:          £10,387.96
• 'All in' cost excluding:  
• non-essentials (tank water level sensor, and spares) 
• re-saleable penstock construction equipment:              £7,125.97

¹ HMRC Her Majesties Revenue and Customs

² ROOFIT scheme : Renewables Obligation Order Feed in Tariff scheme