‘My new solar panels and batteries should save me £1,600 this year’ | Energy bills | The Guardian

2023-03-06 04:37:33 By : Mr. hao wang

More Britons are making their homes greener and cutting bills – here’s how the costs add up

H ow would you like to be able to power two electric cars, cover most of the electricity for your greener home, and still save £150 a month on your electricity bill? If you don’t believe it is possible, look no further than Giles Parker. Best Seat Cover

‘My new solar panels and batteries should save me £1,600 this year’ | Energy bills | The Guardian

Last year the 69-year-old, who lives in the village of Ickleford in Hertfordshire, spent £9,500 on installing 14 solar panels on his east-west roof and two 8.2 kilowatt hour (kWh) solar batteries in his garage. Nine months on, he estimates he has cut his annual electricity bill in half, and is on course to save about £1,600 this year.

Energy bills, and what can be done to reduce them, were yet again front-page news this week as pressure mounted on the government to postpone a looming cut in support for households. As things stand, consumers face an increase in their bills from April, despite Monday’s announcement that the industry price cap will fall by almost £1,000.

Parker, who runs his own digital signage business, is relatively unusual in that he and his son run electric cars, meaning his electricity consumption is significantly higher than most households. However, with careful management of the system – which sometimes leads to him dialling in to set the home batteries to charge up at night using super-cheap electricity – he says he has slashed his outgoings, as well as his home’s carbon emissions.

While solar panel installation has been around for years, the arrival of reasonably priced home energy batteries capable of storing a home’s daily electricity consumption – plus the big increase in prices because of the Russia-Ukraine war – has helped revitalise a sector that was left on its knees when the government stopped paying feed-in tariffs.

Last week the body that accredits installers, MCS, said solar panel installations have doubled this year and are running at the highest level since 2015.

The fact that most of us are now paying about 35p a kWh for each unit of electricity – almost three times as much as a few years ago, with prices about to go up again in April – has left householders looking for ways to save money on electricity bills that now average £1,200 a year.

“I did it partly to reduce my carbon emissions but also to save money,” says Parker, whose panels were producing about 1kW when the Guardian visited on a sunny February day. This would rise to above 4kW on the brightest summer’s day. For comparison, the highest-using item in most kitchens, the kettle, is typically rated at 3kW.

“If we are out and the sun’s shining, the power generated is automatically sent to the battery for later use when we are back at home,” Parker says.

“I opted for two batteries because you pay 5% VAT if you buy them at the same time as the solar panel install, and I wanted to future-proof the house. We have a very old boiler, which is going to need to be replaced at some point, an electric hob and an immersion heater. When the boiler goes, I will probably be moving to an electrically powered heating system – possibly infrared heating panels – which will require more capacity.”

Parker says a significant part of his £150-a-month savings come from the fact that he is on Octopus Energy’s Intelligent electric vehicle tariff, which also allows him to recharge his home battery system between 11.30pm and 5.30am for only 7.5p a kWh.

“It means we rarely have to use power from the grid at the full price [about 35p a kWh], only when using things like a kettle, which exceeds 2.6kW – the maximum that the batteries will supply to the house. The whole thing is really easy to manage using an app on my phone, and we are now using seven times as much off-peak power as that charged at the full price.”

So should we all be following his lead?

One issue for the rest of us is the fact that the prices of panels and batteries have risen since Parker’s installation.

Today, a system that features a 4kW array of solar panels plus a good-quality 9.2kWh home battery costs about £11,000-£13,000, once the inverter and other bits are added.

The price will depend on roof size, where you live and the type of hardware chosen.

Certainly, if you are wanting to cut your home’s carbon footprint and improve the energy performance certificate (EPC) rating, this is one of the simplest ways to do it. Once set up, the panels will either power the house or charge the battery, with excess power exported to the grid.

However, by shifting your power use – for example, running the washing machine in peak sunshine – and by charging the battery up at night in the winter, using discounted off-peak electricity, most households should be able to reduce their electricity bills from an average of £1,200 a year currently to only £200-£400.

It means a typical nine- to 10-year payback period, based on current prices.

The panels should typically last for 25 years, and the batteries are warranted for 10 years, although they should continue to store power, albeit at a slightly depleted level, for years after their 10th anniversary, making a long-term investment worth looking at – particularly if you have no plans to move home.

One of the key points in terms of making these systems work financially is to be on the right electricity tariff.

While most of the big suppliers have been downgrading the old Economy 7 tariffs that offered cheap night-time rates, Octopus Energy is firmly embracing the concept with a range of tariffs aimed at customers needing to charge electric cars and, most recently, batteries, with some of the lowest off-peak prices.

A few days ago the company added a new tariff called Octopus Flux, aimed at those with a solar PV and home battery setup. It is more complicated than most tariffs out there and is clearly set up to incentivise customers to avoid buying power at the 4pm-7pm peak period, when it typically charges 49p a kWh. On the flipside, the company will pay households about 40p a kWh for every peak-time unit their panels export to the grid.

Households charging their battery at night pay about 21p a kWh – considerably more than the 10p being charged to new electric car owners on the company’s Intelligent tariff but less than the day rate the rest of us are paying.

Customers on EDF’s Economy 7 rates are currently paying about 47p a kWh for day usage and 11p a kWh for off-peak power, although they only receive 5.6p a kWh for power exported to the grid.

Rebecca Dibb-Simkin, the Octopus head of marketing – and who has just had 18 solar panels and a battery system installed at her Midlands home – says the new tariff has been launched to cater to the growing number of homeowners who have such systems installed.

“There is huge interest right now from customers in installing solar panels and batteries to store the excess power. I can tell you from personal experience that it is quick and easy. The best bit is that we should end up only paying for electricity about 60 days of the year, using the power we generate ourselves the rest of the time. I expect the install has added significantly to the home’s value, too,” she says.

Octopus also recently started offering to carry out solar PV panel and battery installations at people’s homes in the Midlands and parts of the south of England, and Dibb-Simkin says the plan is to go nationwide with this.

Asked whether people spending £11,000 and upwards on such systems could be left looking at poor investments if energy prices swiftly fall back down to the levels of a few years ago, she maintains that the answer is no.

“I really don’t see energy prices ever falling back to those levels,” she says.

The financial services firm Investec has said it expects the Ofgem price cap to fall to £2,165 from July – down from the £3,000 we are all set to be paying in April under the government’s energy price guarantee scheme. Meanwhile, earlier this week, analysts at Cornwall Insight forecast that the price cap will fall to £2,112 from 1 July, and then £2,118 from October until the end of the year.

Ultimately, the payback period on these investments will depend on future electricity prices that may or may not fall if and when the war in Ukraine ends.

‘My new solar panels and batteries should save me £1,600 this year’ | Energy bills | The Guardian

Large Car Cover If prices stay relatively high over the coming years, we will all be wishing we had followed Parker’s lead.