I agree that the first action should be good insulation, and we've already done that and the payback time was incredibly short - less than 2 years.
As it's only the two of us, we decided that solar hot water was not cost effective for us. When we looked at our HW usage, it's only a shower in the morning and/or evening and hand washing. The dishwasher and washing machine are both cold fill so wouldn't benefit. It all seemed like too much effort for the occasional shower - although if we had a house full of teenage daughters we might think differently.
For us, PV looks like it would be worthwhile. Our pitched roof faces due south and has no issues with shade from adjacent buildings or trees, and is large enough for the max size for a domestic system to produce 4Kw. We're investigating the various types of panel available and are coming to the conclusion that it is probably best to stick to the German or Japanese ones rather than the Chinese clones. Guarantees given by Sharp, Mitsubishi or Sanyo should be worth more than from a Chinese new entrant. Although the sales peeps won't tell you unless you ask, you'll need to budget for a new inverter after 12 - 15 years.
For those that have yet to look into this, you receive a feed-in-tariff of 43.3p per KwH for ALL electricity you produce, even if you use that electricity yourself. You also receive a 3.1 p/KwH for unused electricity you export to the grid. This is not measured and it is assumed that you export 50% of what you generate. Any electricity you consume yourself whilst it is being generated is unmetered and you use it for free - AND still receive the 43.3p/KwH FIT.
Based on the govt website, a 4kw system ought to produce a FIT of about £1700 per annum, and selling back to the grid plus savings on power bought should add at least another £300, so it begins to sound interesting. A neighbour who has had a system fitted has found that he is comfortably exceeding the estimates in practice because we get more sun here than the govt figures assume. He received over £100 per month from the FIT even back in Feb/Mar despite having early morning shade issues that we don't have. The FIT is increased each year by RPI, so based on (say) 4% RPI per annum the FIT will double over a period of 18 years from the current 43.3p per KwH. Plus electricity is rising in price by at least 3x that rate, and as we are both retired will be able to take advantage of the free power by using our high consumption items (dishwasher, washing machine, oven, immersion) during the day when the system is producing. You could actually argue that use of the immersion heater to top up the HW midday is solar HW - but via free electricity.
On the face of it, the return should be a conservative 8% tax free even without factoring increases in the FIT due to rising RPI or rising electricity costs. That equates to a return of 10% gross from your savings account for a basic rate taxpayer - and that is pie-in-the-sky for the indefinite future. It just seems like a good low risk investment and hedge against inflation, and given that the FIT is guaranteed for 25 years from the date of installation, that takes me to age 83 and it is several generations since anyone in my family has lived that long.
The devil, as always, will be in the detail. I'll keep you posted, but in the meantime I would be interested in other peoples real world experiences.
