gemini://ur.gs/blog/off-grid-in-suburbia/

Energy costs have gone absolutely off the rails in the UK. The geopolitics of it are known, of course, but that doesn't change the domestic impact.

The UK energy market has a price cap set by the government; this is a limit on the price retail energy companies can charge for gas or electricity, per-kWh. I remember when it was about 12p/kWh for electricity - it's currently about 28p/kWh (7p/kWh for gas). Estimates for where it's going in the future vary, but ~50p/kWh (10.5p gas) is expected for 1 Oct. It changes again in 1 Jan 2023, with estimates around ~60p/kWh (21.5p/kwh gas). April has estimates attached, but I don't like looking at them.

The main shortage is with gas, but the UK burns a lot of gas in turbines to generate electricity, so electricity prices are affected too. This house is expected to get through ~3MWh of electricity per year, and ~9MWh of gas. From Feb-Aug, we've managed to get through around 5.5MWh combined, so it's not a bad estimate.

I'm not paying that. I refuse to pay it, in fact. This is a fairly popular idea in the UK at the moment - well over 110,000 people have signed up to the Don't Pay UK campaign, although they're hoping for a million.

A lot of people simply don't have a choice about paying - if you're on minimum wage, rent is ⅓rd of your income (optimistically) and energy is ½, you're left with ⅙th - £2,000/yr, £166/mo - for everything else: food, transport, toiletries. Let's not forget that food price inflation is very much a thing right now as well.

I'm in a different situation, but I have friends and family who are very close to this picture, and it's important to me to remember it. Growing up, I was without energy or food for a day or two, most weeks, but we were in the bottom 5% or so of the population by income. It's kind of expected when you're down there. The idea of those conditions applying to 50% of everyone is… somewhat upsetting.

In my April update, I mentioned that, "in the long term", I wanted to get solar panels and a heat pump installed in my current house. I came back to it in my U values post, too. The short version is that this work got a serious boot as a result of the estimated prices interacting with my memories of being without power, and I've engaged Switched On (Yorkshire) to get it done.

They're installing 3.6kWp of solar panels, and a 6kW (out; ~1.7kW of electricity in) heat pump for me. This absolutely isn't an option for most people - the panels are ~£5,000 and the heat pump, with a replacement hot water cylinder and 4 replacement radiators, is ~£13,000. There is at least a £5,000 "voucher" available from the government that goes towards the heat pump, via the Boiler Upgrade Scheme.

Due to the magic of heat pumps, my 9MWh of gas becomes ~3MWh of electricity. The estimates for Jan 2023 make that cash-neutral - I'm burning less energy overall, but electricity is expected to be 3x as expensive as gas (it's 4x right now, and will be 5x from 1 October). This is where the solar panels come in.

Over the course of a year, the panels are also expected to generate ~3MWh of electricity, so they offset the the heat pump completely. Matching the supply to the demand is an impossible job, mind, but you can use the grid as a buffer by exporting surplus and importing when there's a deficit.

This is where the first significant snag comes up. Exporting energy to the grid used to get you paid via the Feed-In Tariff, which was quite generous. It's gone now, and we have the Smart Export Guarantee instead. Same idea - get paid to export electricity to the grid.

Sadly, the rates are generally atrocious. My current energy company offers 3p. Three. Three pence. Per kWh. Flat rate. They can then use that generation to reduce the amount of energy they need to buy, at 60p/kWh or whatever, so their margins on it are absolutely mercenary.

There is just one company in the UK that offers a rate comparable to import pricing - Octopus Energy. They have an "Agile Outgoing" SEG tariff which is currently offering anywhere from 40p-80p/kWh.

This keeps the "grid as a buffer" idea alive - without it, I'd only have 5-10% efficiency in cash terms (sell 10kWh of energy, have enough money to buy 1kWh back). With it, my heat pump's energy usage can be completely offset by the solar panels.

Another option would be to get a battery installed. This actually stacks quite well with Agile Outgoing - there's generally a peak of energy prices from 4pm-7pm, so you can use the battery to get the highest price for your surplus energy - but could be an alternative to it, as well. I found this article very enlightening on the topic:

Initially I was very big on the battery part, but the spend on this project is already high, and my coffers aren't limitless. I also have another 3MWh of general electrical usage on top of the heat pump to import from the grid, anyway. To make the battery worthwhile, I think I'd need to add enough solar capacity to cover that too.

My plan at the moment is to watch the system over 6-12 months and decide whether to add a battery, and perhaps more panels, next year. If I could avoid drawing any energy from the grid by relying on the battery instead, it would be "proper" off-grid living, rather than just playing at it.

My April update also mentioned electric cars, which happen to come with a nice big battery one could use in this way. I'm still undecided on that; the existing (petrol) car has a good number of years left in it, and batteries, while expensive, are much cheaper than cars.

I got a sheet for the solar panel quote that, given current electricity prices, estimated a payback period of 10 years, with an assumed lifetime of 25 years. An estimate based on the Oct 2022 pricing gave a payback period of 6 years.

However, the methodology wasn't great even then - it assumed 2% inflation, priced exports at the standard SEG rate, and estimated the import/export mix using a demand profile that has nobody in the house during the day. So, I feel that it's a very pessimistic estimate. Here's mine.

With the Agile Outgoing tariff giving me the grid as a 100% efficient buffer for generation (optimistic), I can pretend that what I've done is simply eliminate the gas from my bill. With the Oct-Jan prices, that's worth about £1,000/yr. With the Jan-Apr prices, that's ~£2,000/yr.

Splitting the difference and assuming ~£1,500/yr saved, and completely ignoring inflation, the payback period on the panels (~£5K) is around 3⅓ years, which is much more like it. For the heat pump and panels combined, the payback period is ~8½ years - less than the initial estimate for just the panels.

Adding more panels actually reduces the payback period - I guess this is the basis of the old "capex > opex" mantra. If I assume net consumption of 0kW/yr, making for overall savings of £3K/yr, and bump the capital cost from £13K to £18K, payback is 6 years.

Adding **even more** panels and/or a battery would allow me to get the grid buffer efficiency effectively above 100%, which could reduce it even further, but...

Octopus is very big on market solutions. It's kind of their thing. From their point of view, everything is working exactly as it should - energy prices are going up, so I invest in capital to make more energy to save money, and in so doing I... get to benefit from high energy prices? Wat?

Once the payback period is over, I start accumulating cash (compared to the status quo where I never got the panels). If I'm a net exporter, and my payback period is over, my surplus energy costs me nothing to generate, but I'm selling it to the grid at 50p/kWh or whatever. Some of my friends and family are handing 50% of their paycheques over to the energy company as a result of these prices, and the energy company is turning around and handing me my cut of that. Et voila, I have become what I hate.

Scaling up doesn't help matters - only a small proportion of people will ever be able to afford the solar panels, so there isn't even enough capacity to push prices down significantly over time. Cutting a few steps out, one could even say that exporting to the grid is renting the solar panels out, with the same dynamics.

Making an individual choice to sell at those 3p/kWh rates doesn't help, either - again, it won't change what the energy company charges its other customers, or move the market more generally.

Probably the best I could do with my panels as a net exporter is to sling a cable over the fence to the neighbour and let them use the electricity for free. Again, the panels are too expensive for there to be enough people to move the dial doing this, but at least I get to help out a few people I know.

My sister has "joked" about cycling from place to place with a battery, charging it up where she can, and lugging it home to have energy. We laugh, but she might actually end up doing it.

The panels do, however, allow me to kind-of participate in the Don't Pay campaign with very little personal risk. I'd imagine that the conversation with my current supplier on the 1st October will go a bit like this:

It ain't much, but it's honest work. Will it help? Has technology changed the impact of civil disobedience since the poll tax? I have no idea.

There's the Enough is Enough campaign too, which has a lot of union support. That's a little more diffuse - and less illegal - than Don't Pay, but it's really not clear how they'll get any of the things they demand.

Shame this couldn't just be a happy post about shiny new technology, really.

Questions? Comments? Criticisms? Contact the author by email: gemini@ur.gs

Off-grid in suburbia

The Domestic Impact

I'm Alright, Jack

Payback

Everyone else