Congratulations on investing in solar panels, it feels good to be making your own clean energy, but it feels even better when you are making the most of it, this short guide aims to help you do that.
Seasonality: It will often be the case that in the summer you’ll have more energy than you can use, and, in the winter, your solar will only make a small contribution to your generation. It is safe to estimate that in the peak summer months you’ll generate five times more per month than in the depths of winter, so if you’ve just had solar installed in autumn or winter, don’t worry the power will come!
Economics: In a nutshell you’ll want to use as much of your own generation as possible, every watt you consume from your home system is a watt you don’t have to buy, and the rates for selling your own generation back to the grid never come close to the costs to buy from the grid.
So how to do that effectively?
That is running your appliances as best you can whenever the sun comes out, in practice this is largely impractical unless you have incredible patience and the ability to micro-manage your daily needs around the whims of the weather.
A typical household uses 1,500 units per year to heat their domestic water, costing between £300 and £400 annually. Fitting a solar diverter will automatically send your solar generation to your hot water tank dramatically cutting that bill, typically reducing a water heating bill to almost zero for the summer months. Diverters cost between £300and £400 meaning that they pay for themselves within a couple of years. As a bonus solar diverters incorporate timers for controlling your water heating, this way you can ensure that your heating is done overnight if you have an overnight tariff to take advantage of.
As prices fall and capacity grows these systems are increasingly popular, a home battery will store generation that cannot be immediately used either for the evening, or to cover cloudy spells on and otherwise sunny day. Typically, a home battery will store between five and ten units, taking most households though most evenings. Note: as installation costs are a disproportionate amount of the price then it is advisable to buy a larger unit, for example a 5kWh battery may be £3,000 whilst a 10kWh battery could be installed for around 25% more.
Two further uses of home batteries: if you have a cheaper overnight tariff then you can charge your battery using that and expend the energy the following day – especially useful in the winter months. Lastly there are increasing opportunities to provide so-called grid-services, that is where the grid operator has some limited control over your battery and is able to charge it when they have cheap excess generation available and discharge it during the time is highest grid demand (5pm – 7pm) thereby lowering the national reliance on expensive gas turbines. You the battery owner will then get paid for that service you have provided to the national grid.
Calculating payback for a home battery that costs several thousand pounds to install is complex as there are so many variables – cheap overnight units in winter, summer storage, possible grid services etc, but between five years with optimal management and ten years would be typical.
AKA a four wheeled battery! Even the oldest electric vehicles have sizable batteries, the first generation of Nissan Leaf’s were equipped with 24kwh batteries, most new models have double or even triple that capacity, so they provide a perfect match for the high generation that your solar will have in the summer months, and there are huge cost savings to be had. Taking the example of a typical sized solar rooftop installation of 4kwthat will generate in the region of 25 units in a sunny summer day, if you were to put all of those into an electric car then that could power the car for 100miles, that same 100 miles in a petrol car would cost around £15, if you were able to do that 100 times a year then you’ve just saved £1,500 that would otherwise be spent at the petrol pump!
In theory if you put every unit generated from your solar into a car then a 4kw system could run the car for around 16,000 miles saving £2,400 a year. In reality the opportunities to ‘fill the car’ are not evenly spread out across the year, and cars are not always on the driveway, but this maths does demonstrate how effectively EV’s can work with solar installations.
Long gone are the FiT payments that helped to kick start the solar industry, now owners of solar systems are reliant on the SEG – smart export guarantee – for an income from exported units, prices for export range from just 2p per unit all the way up to 29p per unit – with many conditions attached – but with most hovering around 10p the rule of thumb remains that using your generation is better than exporting.
A further complication. Given that export rates may exceed overnight rates, it can make sense to export your excess electricity instead of storing it in your car, certainly if you are eligible for Octopus's 15p export coupled with their 8p overnight charging rate.
The more pieces of the puzzle are added, then the better the picture will be. At different times the technologies mentioned here come into their own, but with a starting point of having solar then the most useful complimentary technologies are as follows.
An EV, the ultimate place to store your excess generation and avoid trips to the petrol pump, saving the equivalent of 60p for every unit generated. And the ability to be eligible for special EV tariffs that open up cheap overnight rates.
Solar diverter, a simple and relatively cheap device that works quietly by itself to harvest your solar generation and store it in hot water for later use, saving you around 22p for every unit generated.
Home battery, a more complicated proposition due to the upfront costs, these need management and an overnight tariff for the best returns but provide a welcome relief from sending your generation back to the grid!
Lastly, if you have a full car, lots of hot water a full battery and you’ve done the laundry and run the dishwasher then make sure you have a decent tariff with a good SEG rate for the very last of your units!
