Game Design, Programming and running a one-man games business…

Doing the maths on a home solar-panel upgrade

My data suggests that the output from my solar array is roughly 1.6MWH per year. This is a 2.1kwp install from over ten years ago, that was recently retrofitted with solar edge optimizers to increase its output during times where some of the panels, or part of a panel was shaded.

I am currently using the octopus go tariff (designed for electric cars for my home electricity consumption. This has 2 different rates, depending on the time of day, and at the time of writing they are:

12.30am to 4.30am: £0.075 / kwh.

4.30am to 12.30am: £0.3061 / kwh.

To add to the complexity, I am on an old ‘feed-in-tariff’ which subsidized my solar install (long since discontinued, but I still luckily get it). This pays me an inflation-linked rate of £0.65/kwh for generation (regardless of what I use) and a ‘deemed export’ additional payment of £0.0185/kwh. Another way to phrase this, is currently I earn £0.67 per unit produced.

Of course, I earn that as a payment from the feed-in-tariff provider, but also this reduces my own consumption. If we assume that roughly a third of the power I produce offsets energy I would have used (as some will be peak daytime summer when I’m outside or not using much power anyway), then I can add a third of the price of a unit bought to each unit produced to reflect this saving.

So that gives me roughly £0.77 per unit produced, or given my production of 1,600 kwh per year, an income from the current solar setup of £1,244 per year. Not bad. Can I do better?

I cannot (due to shading issues) realistically add more solar panels, and I would need planning permission for that anyway, but could swapping out the 10 panels I have make sense? The output from solar panels is now a lot better than when I got mine about 11 years ago. My panels are MPE215 PS05 schuco panels. The ‘module efficiency’ is 14%. AT 12 years, the output guarantee is 90%, so they are already 10% down on the output I would expect. On the plus side, I have solar-edge inverter and optimisers, so I am squeezing the best possible output from each panel right now:

If I upgraded the panels then I would still keep using solar edge, so this benefit is not significant in deciding to upgrade. However, if I *did* upgrade it would finally be time to do the obvious, and get a solar storage battery (lithium-ion). This is something I would love, as it would reduce my electricity bills to almost zero throughout the summer (at least the peak usage…I would still use scheduled charging on the car to fill up its 85kwh battery during off peak hours. Trickle-charging the car during the day manually is just too much messing around…).

So what would the economics look like if I had battery storage and new panels?

Firstly, I would 100% lose the feed-in-tariff, as you cannot change an existing install. On the other hand I would qualify for a smart-export payment, but its trivial, and would require me to export power! whereas with battery storage I’d simply use that power to top up the car and likely export almost nothing. On a peak day, I generate a maximum of about 12kwh (perhaps 18kwh with new panels), and the car battery is 85kwh. its unlikely I would have an option to earn anything at all from exporting energy.

So it comes down to how much extra power I would generate (and thus avoid paying £0.30/kwh on), plus how much I would save by being able to time-shift the power. Actually the economics are not good…

When I generate a unit of power now, I ALWAYS earn £0.77. If it displaces peak power usage, its earning me £1.07. If it only displaces off-peak (car charging) usage, it earns me £0.84. The real problem is that with new panels, all I can ever do is get credit for the energy I would not use, so £0.30. Unless new panels were FREE and also generated 200% more than the current ones, I cannot make the economics work, even assuming that the battery is FREE, and the time-shifting and scheduling of stuff works perfectly.

The real elephant in the room here is the old feed in tariff. It did a fantastic job encouraging demand, in that I was the first person in this village to install solar, and helped encourage others to do so, and enabled the industry to scale up. However, people like me are now effectively trapped in a valley of economics, where we are basically paid too much to generate power on old panels to bother upgrading.

In an ideal world, I would be able to keep the tariff even with new panels, although I understand that might seem cheeky. I do find it pretty frustrating that I am incentivized to keep producing 2.1kwp of power instead of the 3.15kwp I could generate with new panels.

What if you don’t already have solar panels though?

Assume your usage pattern is the same as me, so your consumption of power is roughly 474kwh per month, or 5,688 kwh per year.

If you do no time-shifting of demand, that would cost you £1,706 per year. lets assume you have a suitable roof for a 4mwp installation, and can thus produce double what I do, plus 50% for increased panel efficiency. That means you produce 4,848 kwh per year, but spread in a bell curve. Leta also assume your consumption is constant, and a battery allows you to perfectly demand-shift during a given day, so no generated power is wasted. lets assume an export ‘smart export guarantee’ of £0.05 and a power purchase cost of £0.30. (I’ve assumed a similar curve of solar generation to my own setup):

So in this setup, normally your annual bill would be £1,706 but reduced down to £583.50 by having solar panels. Thats an effective saving of £1,122.90. Is it worth doing?

The energy saving trust assumes an install of this size costs £5,400. The big kicker would be the battery. I think to make best usage of it, you need to be able to store 66% of a peak days generation in the battery for usage later. So thats a 12kwh battery, which costs about £4-5000 extra. This leads to a break even point after 10 years.

However, if you assume no battery, and that you cannot load shift 50% of your usage we get this:

So now we are buying power even in summer, because we use some in the evenings, so our total energy bill is £1,025.40 instead of just £583. We saved £681 a year. Payoff time assuming £5,400 install? 8 years. This assumes unshaded south facing like my example, although your output may be higher, as I have some shading from trees outside of peak months…

So should you install solar panels? *it depends*. There are so many factors at play right now. The energy price cap in the UK is likely to go up another 50% in October. Running that through my spreadsheet means payoff time is in 4 years. WAY better. If energy prices rise even further, its super compelling.

Conclusion: if you live in the UK, Solar panels are a no-brainer investment assuming energy prices DO rise in October (hint:yes) and do not fall. Domestic battery storage remains a hard sell, although if prices of battery units themselves come down, they may become a lot better.

YMMV. Things to take into account:

  • If you have a big roof and can go bigger than 4.2kwp, then do so. A big part of the cost is install & inverter. Panels are cheap
  • The extent to which you can shift demand, using an EV charger, or timed dishwasher/washing machine will depend on if you have a smart meter and a suitable tariff. (get one)