Boiler Scrappage Scheme

[GeorgeNewman]

HMG's boiler scrappage scheme, offering £400 discount against the cost of old and inefficient boilers, starts today.

Should I be tempted?

I have an old (28 years) Worcester Heatslave 2+ boiler, that is highly reliable, and relatively cheap to service. (<£100 p.a.)

My gas bill is about £600 p.a., and boiler efficiency (output to water) is about 70%, which I have recently checked and confirmed.

Assuming a new boiler gives me 90% efficiency, this would equate to a saving in gas cost of about £120 p.a.

A recent quote for a new boiler and install was £4,000. Assuming writing the new boiler off linearly over 15 years, I get the following rough discounted cost p.a.: (Boiler cost now £3,600, with scrappage)

Annual boiler write-off in value: £240
Annual service charge: £100
Cost of initial capital, say at 4%: £145
Fault repair, when out of warranty; say: £50

Cost of ownerhship, less gas: £535 p.a.
Cost of gas: £480
Total: £1,015 p.a.

Cost of running my old boiler: £700

Clearly a no-brainer. I keep my present boiler until it fails, or the price of gas goes through the roof!

Regards, George

 

[ScottCheg]

HMG's boiler scrappage scheme, offering £400 discount against the cost of old and inefficient boilers, starts today.

Should I be tempted?


Clearly a no-brainer. I keep my present boiler until it fails, or the price of gas goes through the roof!

Regards, George

Youve kinda answered your own question

 

[Whitespirit66]

You're an accountant aren't you George?

 

[GeorgeNewman]

How did you guess.

Bean counters have their occasional uses

 

[Whitespirit66]

Yes, if you're talking about straight line depreciation, or any other form of depreciation for that matter, it quickly becomes apparent that spending money to save money is a waste of money.

I have a customer in Bristol who has the MK1 version of your boiler, still going strong after 30 years, even though her system is full of sludge (won't let me sort it until the spring!).

Great boilers, with very little to go wrong.

 

[Biguns]

Then after approx 8-10 years you will be looking for another replacement. That after paying god knows how many repair bills on these sophisticated boilers. You know "sorry mate it looks like the PCB, that'll be £400 please"
Keep it till you have to put it down
Oh and by the way do not forget to factor in the extra electricity these new boilers use

 

[D_Hailsham]

Annual boiler write-off in value: £240
Annual service charge: £100
Cost of initial capital, say at 4%: £145
Fault repair, when out of warranty; say: £50

That assumes you already have the capital and do not have to borrow it at 20% pa.

Fault repairs is presumably an amount set aside each year to cover eventualities. If so £50 seems on the low side; £100 might be more realistic. I suppose it depends on how often you expect the boiler to break down and the repair costs.

The calculations would be even worse if you used compound interest and did a full DCF.

Minimum Average Annual Cost is a technique applied to vehicles. Might be good for boilers as well.

 

[GeorgeNewman]

Thanks for replies! We seem to be singing from the same sheet. Glad to hear that someone else has an old Worcester still going strong, and interesting about the extra electricity used by new boilers too.

George

 

[GeorgeNewman]

Thanks for replies! We seem to be singing from the same sheet. Glad to hear that someone else has an old Worcester still going strong, and interesting about the extra electricity used by new boilers too.

George

 

[GeorgeNewman]

Thanks for replies! We seem to be singing from the same sheet. Glad to hear that someone else has an old Worcester still going strong, and interesting about the extra electricity used by new boilers too.

George

 

[D_Hailsham]

We heard you the first time

PS

I've done the same. Pressed submit then pressed the browser back button, which takes you back to the text entry screen. Thought I hadn't posted it, so pressed submit again; and so on ad infinitum. Result multiple posting of the same text.