Back in the winter of 2015, I moved into my first bought home. It was a big, old and dusty house. But more importantly to me, it was inefficient. I started looking into ways in which I could reduce my gas and electricity bills.
Could I transform this old, cold and money draining house into a home?
Feed in Tariff
I quickly embarked on this journey to modernise my new home, and ultimately save myself some money in the long run. I did this by doing what any good programmer does, by frantically Googling.
I quickly found The Energy Saving Trust website. A smorgasbord of tips and info to help me choose what would be the most cost effective method of making my home more efficient. A few bits stood out to me as easy and cheap to implement winners for improvements, such as replacing the bulbs with energy saving bulbs and only fill the kettle up to where I need it.
But then I found some of the more expensive ways to improve the home such as roof and cavity wall insulation, biomass heating and solar panels. Could I implement them, and should I do it? At the time, a government grant existed, which would pay for every kWh of energy produced by the solar panels. At the end of 2015, this was 13.83p/kWh, and would rise in line with inflation at the end of every tax year.
In addition to this a generation tariff existed alongside, which would pay for energy that’s exported to the grid. At the time this sat at 5.38p/kWh, and was measured by taking half of the solar production. For example, if your solar output was 200kWh for a quarter, it would half it (100kWh) and apply the tariff to this. Why half? At the time, smart meters weren’t being rolled out to homes, and so there wasn’t a way to measure how much solar was being exported to the grid.
This gave customers an incentive to divert as much of the power from the panels, and still get an assumed half energy output generation tariff.
So what were my returns
Let’s do the maths! Everyone’s circumstances are different, but as my GCSE Maths teacher told me “Show the working!”. So here’s mine:
Let’s start by estimating the solar energy output
- My location is Sheffield. This is important as it will tell us the angle of the sun on the rooftop
- Roof is at a 40° angle/pitch. Most British houses will sit somewhere between 40° and 50°. You can calculate this using simple trigonometry and going into the eaves of your house.
- Shade from trees is minimal. This can be done by simply looking at where the sun is at differing parts of the day. Another good estimate is whether a tree or house is more/less than 5 metres away.
- For my sized roof, the largest solar array available was 3.5kW (14 x 250W panels).
From there you can input these figures into this calculator.
Adding it all up gives a total of 3MW annual energy production. As an estimate it’s pretty close to the actual output of 3.3MW per year.
This means, with an assumed 3% rise every year for inflation, and guaranteed payments for 20 years:
Feed in tariff – Σ((3000kWh * 13.83p)/100)*(1.03)^n where n is 1 to 20 = £11,482.97
Generation tariff – Σ(((3000kWh * 5.38p)/2)/100)*(1.03)^n where n is 1 to 20 = £2,233.49
So in total, over 20 years, a conservative estimate was a total income of £13,716.46. Now we need to calculate the estimated electricity bill savings.
According to the Energy Saving Trust, a typical 4kW system will save a household between £85 and £220 per year. From my own bills, I’ve noticed a reduction of around £150 per year.
Typical panels have a lifetime of around 25 years, taking this to a total saving on a bill of £3,750.
With my panels costing £5000 in 2015, a potential lifetime gains of £12,466.46 was possible. However, were these gains only possible with this government grant?
Definitely one to cover in the next post!