Ashley Seager splashed out £17,000 on solar panels in an effort to cut his fuel bills. So now he’s saving the planet, but will he save a fortune at the same time
There can be few things more satisfying, in these days of sky-high energy prices, than watching one’s electricity meter turning backwards. If you are lucky enough to have one of those older meters with a series of small dials , it will go into reverse during the day if you fit a photovoltaic solar panel system on your house – as I have.
The panels cost £17,000 to buy and install, helped along by an £8,500 government grant. They are already generating more electricity than our family uses, and over the year I’m confident they will net enough to cover all our needs, even on gloomy winter days. I’ll soon be waving goodbye to my annual electric bill of around £350.
The environmental benefits are obvious. But will the investment pay off in hard financial terms? It all depends on whether you can get a grant, and an electricity supplier to pay you a fair rate for what you generate.
Grants, as readers are probably aware, are a rare creature these days as the money keeps running out. The government says this is because they are so popular. But the reality is there is too little money in the pot.
The grant system has been suspended and may be relaunched next month. If so, and if you are considering solar panels, you will need your wits about you, and a quote from an approved supplier, to apply for a grant on the DTI’s low carbon buildings programme website. The DTI cut the grants by a third just before they suspended the system, so they will no longer pay 50% of the cost.
I applied last autumn and was lucky enough to grab around £8,500 , representing half the cost of my 3kw system. That’s a pretty big system. Most people go for 2kw but I figured that cost per kilowatt falls with a bigger system because of the fixed costs of installation.
A south facing roof is best, but the efficiency losses are not large for southeast or south-west facing and even north facing roofs lose only about 15%.
The system is not intrusive. Mine is invisible from the ground. There are the panels, a small wire down the outside wall and an inverter box (which converts the panels’ direct current to alternating current to match the domestic system) in our small cellar next to the meter.
One way to look on our investment is that the £350 saving on electricity bills is equal to a 4.1% return on the £8,500 invested – respectable but not spectacular, I admit. But this figure is far from fixed. If we can get our hands on a renewable obligation certificate (ROC), worth about £120 a year, it will push the return up to about 5.5%.
It will also depend on future electricity prices and on whether we manage to keep our lovely old meter, which provides a clear indication of our generation as well as usage.
But I don’t agree with working out simple “payback” times. The house is now worth more because it costs less to run and is greener than most. The first PV systems, fitted in Japan in 1963, are still running, so they last a long time. Thus the annual return on investment is what matters to us. But people need greater certainty about their “feed-in tariffs” – jargon for what suppliers pay you for the power you supply to them – because the sums only just add up.
In Germany the government has mandated tariffs of around 30p per kilowatt hour, compared with between 4.5 and 8.5p in Britain. Small wonder that Germany has 300,000 PV systems compared with Britain’s paltry 5,000.
The reason you export electricity is that you generate power during the day when you are likely to be out. You have lights and other appliances on first thing in the morning and in the evening, requiring you to draw current from the grid because your home system is not generating at those times.
Whether you will be a net importer or exporter over a year will depend on the size of your system and how much electricity you use. Having had my system – supplied by Filsol and fitted by Aqualeq – for two weeks, I have begun exploring which company will pay the most for the power I generate. The picture is dismal. The companies are there to make money, not to help you go green at all.
They don’t like our old meter. They want to change it for a new one that won’t turn backwards. Then they want to charge us £100 to fit a separate export meter .
That would be fine if they paid the same for both. But no, they want to charge us 15.5p per kwh they sell us but pay only 8.5p for what we export. That is a fat margin and can ruin the economics of home generation. The “green” suppliers of electricity are, unfortunately, no better.
As the government seems unable to run a grant system, it should tell these generators – some of whom, ironically, are German-owned – to pay proper feed-in tariffs to make it worthwhile for people to export. Don’t hold your breath, though. In the meantime, we will defend our old meter since it makes our sums work out.
Our aim now is to cut our electricity consumption so we can generate all we consume. Our consumption in recent years has been close to the national average of 3,300 kwh per year. We will not be forcing the children to do their homework by candlelight, however. We have just swapped all lightbulbs for low energy ones, but the real difference will be a new fridge-freezer. These are the biggest consumers of electricity for most people, not because they are high wattage but because they are on 24/7. With an A+ fridge -freezer, our use will fall by around 800kwh a year – about 25% of our consumption . That will take it down to around the 2,300 kwh the panels produce, making us self-sufficient in electricity, hopefully.
We still get our heating and hot water from gas central heating. If you heat water with electricity, a PV system is unlikely to meet all needs.
We are still emitting carbon from the house, although much less than before. We have also put in extra insulation, draught proofing, etc and have cut our gas use. In fact it is crucial, and much cheaper, to do all these “non-sexy” things before you contemplate PV.
All in all, I reckon for £10,000- £12,000 (after the grant), we will have cut our domestic carbon emissions in half. It’s a considerable sum, but it hasn’t cost the earth.