Grid parity – are we there yet?
Photvoltaic panels might not be particularly efficient but they are certainly simple and cheap to run. Stick ‘em in the sun and they make electricity with no further ado. This is why over the next five years large scale PV solar for the grid will be level pegging with the existing power generation costs. So this is grid parity. As power costs rise and panels get cheaper and better, the post parity world should see PV power starting to put the brakes on energy price rises. Of course PV power won’t dominate, there just won’t be enough of it to do so, but the underlying principle will be self evident and compulsive enough to set the stalled PV train in motion again.
There is another reason to give PV renewables a boost. The nascent electric car era is going to tax the grid beyond current capacity. While petrol stations stand empty the grid will be flat out, trying to keep up. A world where the car in your garage costs virtually nothing to run is getting tantalisingly close but the Government clearly needs to act now and raise incentives for domestic PV installations.
Right now though, on the domestic front, parity is more complicated despite panel prices having fallen to around £1,000 per kWp plus the installers cost.
Take a typical 3 bed UK house with annual electricity bills of £450. A 4kWp array costing £6,500 will make a derisory £320 a year in savings and FIT income. Payback over 20 years just says ‘no way thanks,’ so no immediate evidence of parity being anywhere near. However, before we give up, lets take another approach and scale up enough to run a small heat pump; enough to knock out half (no sun at night) the £650 annual gas bills and make the other half at about the same cost as gas would have been. A 6kWp array making around £450 a year and costing £8,500 to install plus another £5,000 for the heat pump makes a total cost of £13,500 for an effective return of £875.
That 6.5% return looks a bit more interesting! What if we took advantage of these crazy low borrowing rates and borrowed the £13,500 from, say, Sainsburys for an annual payment of £2,267over 7 years? We can expect a little help from the Renewable Heat Incentive payments for 7 years applied to the air source heat pump – like £770 a year according to the Ofgen example.
Deducting the £875 savings and the RHI £770 you effectively pay £622 for seven years until the loan is all paid off. You are then left with £875 a year in benefits (and rising) for as long as the kit lasts, which should be a good 13 years. This looks like a sensible way to prepare for a comfortable retirement; almost like a pension. Put an electric car in the garage and another major cost will be eliminated.
Very attractive RHI incentives are also available for solar thermal panels (although making DHW only). £220 a year in the Ofgen example. Even more noteworthy is the emphasis on the more expensive ground source heat pumps where the example returns jump up to £2,100 a year for 7 years. They not only pay a much higher tariff (19.64p/kW vs. 7.63) but the higher COP of the GSHP affects the calculations in your favour. The calculations are based on your energy demand taken from your EPC certificate and you can easily do them yourself.
My definition of grid parity is when it pays to borrow money to buy solar PV. On that basis I’d say we are still some way off but the RHI incentives are making combined systems worth considering.
You can see these and other ideas explored more on an eco-house design here. This house is designed to be virtually off grid and able to provide a separate living unit for grannies or Airbnb paying guests.
To delve deeper into eco-energy concepts you might like to look on Amazon where you can download, for Kindle, my book ‘Dream House – Down to the details’ £2.45. Details
For the Italian readers – low borrowing rates – time for a heating makeover.
There is no getting away from the fact that the cost of heating in Italy is a major issue. The wood/solar solution is usually the answer but the high installation cost often leaves householders trapped in an expensive rut. OK, so lets go back to Sainsburys to borrow £8,500 for a perfect solar/wood stove/heatbank solution to be delivered to your door. £152 a month (£1,824 a year) for 5 years gives you a delightful system that will run for around €1,200 a year. This is deluxe kit. The best stove, the best heat bank and a huge 3 panel solar array. You’ll be warm as toast and there will be masses of hot water. The heating even works in a power cut so you will be safe and even able to cook if disaster strikes. Sorry to keep flipping currencies, but this means that if your heating bills exceed £3,000 a year then it’s time to have a think about a makeover. So many owners of Italian houses spend double this but there is no need to be one of them. If you need a hand to figure out if a makeover would work for you, just get in touch on the contact form below.
A plug for Italian eco-heating.
Word is getting round about eco-heating in Italy. See The Daily Telegraph article here.
In praise of the Casio solar watch.
This story started at the clock museum in Greenwich. I was admiring John Harrison’s (he of the Longitude prize) sea going clock, with all the elaborate pendulums and springs, and realised that his strange machine was more accurate, even at sea, than my £1,000 Breitling Aerospace titanium watch. Now I loved that watch but this was too much to bear so it was sold straight away to someone in the office and five of us there did a deal to get some Casio Waveceptor Toughsolar watches at £130 each.
These watches tune in to the atomic clock at Rugby each night so they are absolutely accurate. The expression ‘What do you make the time?’ is redundant, the time is what it is, period. The first pip goes exactly when the second hand hits the top, even when the clocks change twice a year the hands wind an hour on or off during the night. There is no knob on the right to adjust the time (obviously) and this facilitates the sport of asking owners of expensive watches why they have a knob on their watches. ‘To adjust the time – really?’
The face of the watch hides a solar panel and the metal strap lasts without wear so there are no tedious battery and strap replacements (£30 and £70 respectively on the Breitling).
All this was 10 years ago and the watch, being waterproof, has almost never been off my wrist. It just ticks away faithfully and relentlessly, over 315 million ticks so far, a number of tiny mechanical jolts that beggars belief.
So after the first ten year stint old watch, I salute you.