Green Services Direct

The threat of global warming has heightened everyone’s awareness of the need to replace fossil fuels like gas, coal or oil with renewable sources of electricity in a bid to cut down on harmful emissions of CO2. Already this switch of fuels has resulted in around 45% of our electricity at a national level, being generated using renewable sources such as wind, nuclear and solar. The largest solar farm in the UK, produces 72.2 MW per year and spreads across a 250 acre site in Deeside, North Wales.

There is another imperative for renewables which we should also consider and that is the possible financial benefits we can accrue. As individual households we have all been hit by rising energy bills, so maybe we should ask, how renewables can impact our domestic bills. More households are now looking at this and are installing their own solar panels, mainly on the roof of their property. 

Photovoltaic (PV) solar panels convert energy from sunlight into electricity that you can use domestically. Around 4,000 solar panels are now installed in the UK every month and this growing popularity has meant that with the ramping up of manufacturing, added to improving technology, the cost of solar panels has dropped by around 60% over the past decade, making them a much more attractive medium term investment.

These panels do not rely on the heat of the sun to generate electricity, they only require daylight. This means that they don’t need sunny conditions, they will continue to function even on cloudy days in mid-winter, although not as much as in summer when the daylight will be brighter.

Even allowing for the drop in prices, an effective solar panel installation is still a substantial outlay. An average household in a three bedroom house uses around 3,731 kWh per year. A 3.5 kW solar panel system usually needs about 12 panels, and a 4 kW system might need 14 or 15. An average photovoltaic system in a UK home is a 4kW solar panel system. This has an output of 3,400 kWh per year and could cost around £6,500. The electricity that you use when your panels are active is entirely free, and it can result in annual savings of £800-£1,500. Your actual savings would need to be calculated on an individual basis.

The highest long-term savings from solar panels are to be achieved when you save money through the Smart Export Guarantee (SEG) scheme, which allows you to sell your surplus, unused electricity back to the national grid at a pre-agreed unit price. Your savings after 25 years including SEG can range from £20,000 to £40,000 depending on your system and tariff.

The amount of electricity you normally use can depend on a number of factors, such as the size and age of the house, the number of people living in it and whether the house is empty or occupied during the day. Other factors, including whether you use both gas and electricity or just electricity and how well insulated the property is will also have a bearing on your electricity consumption, as will the mix of electrical appliances in your home and the frequency of their use

A simple way to check how much electricity you use at home, is to check your previous electricity bills. Bear in mind your electricity usage in winter is much higher than in the summer months so always check as many past bills as you can to get a full picture of your annual usage.

Solar panels will generate electricity during daylight hours but have no inbuilt facility to store the power it generates. This means that you have three alternatives;

• Use the power as it is generated by using as many of your appliances as you reasonably can by doing washing, cooking or vacuuming during the hours of daylight or
• Sign up to a Smart Export Guarantee scheme with your supplier. This will greatly accelerate your payback time scale and increase your cost savings.
• Add to your system by installing batteries. These would take in the electricity as it is being generated and store it for future use. This facility is valuable if the property is not occupied during the hours when the electricity is being generated, so there is no pressure to use specific appliances at specific times of day.

There are two main types of most commonly used solar batteries, lithium-ion and lead-acid. A 4kWh, lithium-ion battery has a purchase cost of around £4,000, while a lead-acid battery can be bought for around £2,000. Of the two, the lithium-ion is the more popular, which begs the question, why if they are twice the price do users favour them?

Comparing the life cycles of the two batteries with a 4kWh storage capacity, which are measured in the number of complete charge/discharge cycles the differences are very noticeable. Lithium-ion batteries typically have a life cycle of 4,000 charge/discharge cycles, compared to lead-acid’s 1,800 cycles. This combined with the fact that lithium-ion batteries have a much higher usable capacity makes them a much better financial investment in the longer term. When investing in batteries, it is worth noting that solar panels have a lifespan of around a 20 to 30 years, and when you compare that to the 5 to 15-year expected lifespan of your lead-acid batteries or 15 – 20 years for lithium ion batteries, chances are that you will need to replace them well before you replace your batteries

Another factor worth bearing in mind at this juncture is that a solar panel installation offering a 4kWh output will require around 29 square metres of your roof. Many of the performance figures for a PV solar panel installation assume maximum output during all daylight hours, so it is worth ensuring that your installer makes allowances for that and the fact that the roof you may want to use for mounting your panels may not be exactly south facing which will again cut down the efficiency of the installation.

I have repeatedly used the word investment in discussing PV solar panel installations. It is an investment, and the return on that investment will not be immediate or quick but in the longer term could be a big benefit both financially and environmentally.