On 22 September, I wrote an article about the cost of photovoltaic systems. Ian Butters then wrote a letter on 6 October that argued that increases in electricity prices would mean a reduced net present value for photovoltaic systems. However, as the cost table only appraises, and does not compare photovoltaic systems with others, the relative costs would be unaltered.

Predicting energy costs is challenging. Recent prices have gone down – the 2002 government Energy Review figures describe a 20% decrease in real domestic prices between 1990 and 2000. For future prices we tend to predict an increase, for example, the DTI’s model for fuel poverty is based on electricity price growth of 8-26% between 2005 and 2010.

The economic reality of photovoltaic systems at current energy prices and system costs is that payback based on value of energy produced is unlikely within the life of the system. My calculation indicates a threefold increase in the cost of electricity is required to achieve payback.

The social cost of carbon dioxide emissions is another factor that could be modelled to the whole-life cost benefit of photovoltaics.

Peter Mayer, Building LifePlans