We live in an old terraced house on a cloudy, rainy island. Yet the solar photovoltaic (PV) panels on our roof, put up two years ago, are supplying around 90% of all the electricity used by my family.
The initial cost is high, but don't let that put you off. Two key developments in recent months have made it worth considering solar PV panels.
One is that a government incentive for PV doubled on 1 April and the other is that interest rates on many savings accounts have dropped to about 0.1%, meaning it is time your money worked harder.
And don't be deterred by the idea Britain doesn't get enough sunshine. In fact, solar radiation here is remarkably consistent and only around one third less than southern Italy or Spain. I have just come to the end of my second year with a solar PV system on my roof and it has been a great success.
We have a 3kW peak system (about 4m by 3m) on the roof. It produced 2,703kW hours (kWh) in its second full year (to 5 April), only 1% lower than the 2,730 kWh it produced in the first year, and that in spite of a lousy 2008 summer.
That was about 80% of the 3,500 kWh we used, and our usage was up because we had builders do some underpinning, which meant lots of kettles and cement mixers on.
The previous year we – a family of four – used 3,000 kWh, so the solar system produced 92% of our needs, a figure we expect to return to in the coming 12 months.
The panels, made by Kyocera of Japan, come with a 25-year guarantee and should last a lot longer than that. What you effectively do when you buy a solar PV system is pre-buy decades of electricity at today's price, thus shielding you from price rises. One great thing about a PV system is that it is "fit and forget" with little or no maintenance or noise. And they don't have to go on a directly south-facing roof – ours points south-east and works very well.
So how do the figures work out? Well, buying 3,000 kWh of electricity normally would cost around £420, based on 14 pence/kWh with npower, our supplier. We end up saving almost £400 of that by producing nearly all our own.
On top of that, we were getting payments under the government's Renewable Obligation Certification (ROC) scheme of around £35 per megawatt/hour, rounded to the nearest whole one. So that is £105, putting us about £70 in the black for the year.
Since 1 April, that ROC payment has doubled to £210, putting us about £175 in the black. That compares with £420 in the red without the panels – a gain of almost £600 a year.
Indeed, the system means that, with a condensing boiler, we are now down to only about £30 a month to heat and light our property while our carbon emissions are very low. So what about the investment yield? The system cost £17,000, for which we got a 50% grant, making £8,500. With a return of £600, that's around 7%. It's not taxed, so is equivalent of about 9% for a basic-rate taxpayer and 11% for a higher-rate taxpayer. You'd struggle to do better buying junk bonds and this stuff is certainly not junk!
Moreover, that gives you a crude payback period of only 10 years, not the 100 years that some critics have claimed.
Ah, you say, but that 50% grant is no longer available, the maximum is £2,500. True, but systems have come down in price since we installed ours, so your post-grant price for a system like ours would be around £12,000 now. The £600 saving gives a return of 5% (or 7% or 8.5% gross – not bad when compared with just about any other kind of investment these days).
And, if you are lucky enough to be on a tracker mortgage that is close to 0%, you could add on to your mortgage and it would really pay to invest in a PV system.
That 5% yield is likely to improve – next April, the government plans to introduce a so-called feed-in tariff (FIT) when you get paid an above-market price for every unit of electricity fed into the grid.
The ROC system gives you the equivalent of about 27p-28p per exported unit, but the FIT could well be higher than that. It is not clear how the FIT will work but it will probably replace the ROCs and the £2,500 grant.
And the yield will likely improve further as electricity prices are almost certain to increase faster than inflation over the next three decades.
Some critics say PV is an expensive way to save carbon, but system costs are plummeting as world supplies of silicon, from which PV is made, have shot up. Moreover, global panel production has rocketed in response to FITs in other countries. A PV system in Germany, for example, is about half the UK price – no wonder the Germans have 300 times as many PV systems installed as we do. But even with the higher UK prices, it is worth investing in a PV set-up.
Ah, but what if I move house, you ask? Well, I am convinced that a system that saves you £600 a year and protects you against future rises in electricity costs will add to the value of your house. How could it not?
First, cut your consumption
Fitting solar PV panels has made our family focus on not wasting the energy we are producing from our roof – and with just a few simple measures we have managed to cut our electricity usage by 25%.
The obvious thing we did was install low energy light bulbs. Ignore what the critics say – they are really good as long as you choose them carefully, and the prices have collapsed recently.
There are exciting developments in LED technology. I recently fitted some down-lighters. They give the same light as a 35W halogen bulb but consume only 4W. They are still expensive (we paid around £16) but pay back in about three years. Prices are already dropping.
Whenever we have purchased any new white goods, we haven't gone for A-rated items but the ones at the very top of the scale with an A++ rating.
I have also just fitted one of those "aerating" shower heads that, it is claimed, cut your water and energy use in the shower by 40% by mixing the water with air. My wife has dubbed it the "Schweppes shower" but it works fine and, given how long our daughters seem to spend in there, can only be a good thing. It cost £22.
I have also been trying to encourage my wife and daughters to use the hair-dryer less, but I just get those sort of "get a life" looks.
Undeterred, I am going to get an "Owl" meter which monitors usage, and cost, all the time. They are available for around £40.
If you have an old gas boiler that is coming towards the end of its life, it is not worth doing repairs to try and keep it going. Our old boiler packed up a couple of years ago and the new condensing boiler we installed has cut our gas use by about a quarter.
Most houses in Britain are terribly "leaky" of heat. There are lots of practical measures which can prevent this. Fitting extra loft insulation is a no-brainer, and using wool-based insulation or the stuff made from recycled plastic bottles, has a much lower carbon footprint than buying the fibreglass stuff. We have the standard amount in our loft but I will be up there doubling it this autumn.
There are lots of grants to be had for this and for cavity wall insulation – another no-brainer but only on houses built after about the 1920s. Victorian houses, such as mine, have solid walls.
Worn-out sliding sash windows can be replaced with double-glazed, draughtproofed ones. You can even retrofit the draughtproofing yourself – see www.reddiseals.com – and it is very effective and inexpensive.
We had to have some walls replastered in the Victorian wreck we bought 12 years ago. We fitted some thermal plasterboard which has really prevented heat loss and means the radiators run cooler than before.
All of these measures cost little and have a rapid payback because of the energy they save. A double whammy!