Suppliers

I've started looking around for a company to whom I'll sell my microgenerated units. I still have to determine whether the company I sell to has to be the same as the company I buy from. In fact, I still have to determine the exact nature of the finances involved.

From the various solar power sites I've read, I'm getting the impression that exported electricity not only gains a 3p (or is it 5p?) per unit payment above the 41.3p FiT payment, but that some companies might choose to give more to attract people like me. Certainly it seems that if they don't, my decision would surely be based on who sells the cheapest leccy. That would likely be the big boys. I do hope the smaller operators have something up their sleeve to tempt me to go to them.

Funny thing is that with the FiT arrangements just 10 days away, few companies seem to be rushing to gain my business. I trawled through some of the websites of large and small energy suppliers. The small companies sometimes mentioned FiTs but didn't have a policy towards them. The big boys just didn't seem to care. I'll keep an eye on this.

Spreadsheet Heaven

Ever since my Dad demonstrated a computer spreadsheet to me, I've been in love with them. They are so damn useful, though I'm sure they frighten a lot of folks. Their more advanced abilities frighten me but with my basic knowledge of how they work, I've generated many spreadsheets for a huge range of tasks. I have one for work that I enter my start and finish hours into and it calculates total hours, overtime, pay, tax and a lot of other cool stuff. At home, we use spreadsheets to keep track of our family finances. I religiously note my book's Amazon sales rank (and the rank of some of my friends' books) to watch the trends and I keep a close eye on the sales of my photography on a plethora of microstock websites; all using spreadsheets.

It therefore should not come as a surprise that I have a sheet where I keep a note of the meter readings for my gas and electricity supply. I have this spreadsheet calculate the daily cost for both and I watch how the spend rises and falls with the seasons. One interesting aspect of this is to note how this year's consumption of gas compares to last year's. We had our walls and loft insulated during the summer and I'm happy to say that, despite us having one of the coldest winters in decades, we used 100 cubic metres less gas than we did last winter.

I just know that the arrival of a solar PV system is going to be spreadsheet heaven. Not only will I be able to count the units of electricity we use, I'll eventually be able to count what we generate, how much of our own power we use and how much is exported to the grid. I'll then be able to apply monetary values to the results and see if the system is costing more or less than expected, and even if it has started to turn a profit of any sort.

And just because I haven't got my beloved panels installed on the roof yet, don't think I haven't already created a solar PV spreadsheet because I have. I was real keen to try to model the overall costings of the system. I had accurate figures for how much power our house used in a year and at what cost. I had been told how much power my PV system was expected to generate and I knew how much it was going to cost to install. I put all this into a simple sheet and had it work out the costs and benefits over 25 years, the expected lifetime of the panels and the term of the FiT arrangement. So did it teach me anything? Well...

It seems the most crucial aspect is how much the panels will generate annually, followed by what proportion of that is exported and how efficient we can become. The matter of export is clouded by something I read today. It seems that until the introduction of smart meters, the powers-that-be are going to deem that I will use 50% of my generated power and export the rest. OK, so I can plug that into the sheet. Only smart meters are going to be able to tell when I use power and whether there was power available from the panels at that time. Assuming all goes well with the grant and the loan, the cost to me to install the system will be £10,300. Well it turns out (given that this model will include some relatively simplistic assumptions) that over 25 years, the panels will pay for all my electricity and net me £10,273 - the same as what they cost me! There's a coincidence.

OK, so what improves things? The government tables say that I will generate on average 8 units a day. What if it's 9? It's for questions like this that I almost dribble with excitement at the thought of the spreadsheet I'm going to create to find out for real. Meanwhile, my predictive model has its own answer. Now my 25-year income jumps to £14,817, a clear profit of £4,500 and my electricity paid for quarter of a century.

Now instead, let's imagine that I'm only getting my 8 per day, but that we're managing to use the vast majority of it. I suspect this will be the case. This house's electricity consumption is heavier than most. So instead of 50% exported, let's assume 10%. The income rises to £12,317, mainly because we're having to pay for less electricity from the grid. This yields a £2,000 profit over 25 years and the leccy bills covered.

I'll do one last illustration with the starting point restored to 50% exported and 8 units per day generated on average. This time, we'll see the effect of cutting our annual consumption by 2 units a day, something that ought to be easily realised, mostly by simply replacing our fridge. (Old, noisy, power hungry beast whose efficiency I've been watching with a power meter to prove my suspicions about it.) The income figure is now £12,463, a £2,100 return after 25 years for the sake of a better fridge.

I can't control how much my panels will generate though I suspect they might deliver somewhat more than the government says. But I do have some control over how much power we consume and when we consume it. The lesson is that it will pay to use less power, and that, once the smart meter is installed, we should try to use power when the Sun is out. Whether or not reality follows these predictions will only be learned when I get to grow a nice, shiny, new spreadsheet.

Trading power

It's now a waiting game as the bureaucrats deal with my application for funds for the solar installation. In the meantime, I can start to think about how I'll go about buying and selling electricity.

There seems to be an arrangement that current generators have whereby some companies will buy green power at very good rates because they can sell that power at a premium to people who want use only green power. The owner of the system I've seen buys and sells with a company called Green Energy who give him 28 pence for every unit he exports. I don't know what he buys his power for. However, on 1 April, everything changes when the Feed in Tariff (FiT) system begins.

FiT is a government system where microgenerators are guaranteed a fixed payment from the power company not just for every unit of power they export, but for every unit they generate. In my case, it will be 41.3 pence. It is the concept that makes a solar PV installation worthwhile. However, if I understand it correctly, it has interesting consequences. It no longer matters which company I go with because I will get 41.3 pence with all of them. However, I will still have to buy a large portion of my power and it is obviously in my favour to find a supplier who is as cheap as possible. This might be to the detriment of the smaller companies as I can imagine that Scottish Power, my current supplier, or Scottish Hydro will clean up this market. 

Perhaps, as the FiT system beds in, we'll find that companies will try to offer an extra few pennies per unit over the 41.3 p offered for power from the microgenerators. So far, it's not been easy to see what companies' policies are on FiT.

Time to start looking again.

Application time

A substantial part of today was spent filling out forms because in the middle of the afternoon, I got an email from the Energy Saving Trust. Attached to it were three PDFs; a list of accredited installers, a pack for applying for a grant and a report on my home's energy efficiency measures including recommendations for renewable energy systems that might be installed. This latter PDF is the important one. It allows me to make my applications for a grant and a loan for my solar power system.

[Later note: The grants were discontinued and the loans were reduced to a max on £4,000 - all before I could get to take advantage of them.]

There's a tiny bit of silliness in these applications. Both forms are going to two different departments in the same building. However, the grant application only requires me to include a reference number to their report. The loan application wants a copy of it, and it's 27 pages long. So where one form goes in a small envelope with a printout of my quote, the other has had to go in a large A4 envelope and we'll need to go to the post office to get the appropriate postage. So much for saving carbon.

I have to wait for up to 15 working days - call it three weeks - to hear whether I'm going to be awarded either the grant or the loan. As soon as I know, I can give the installer the go-ahead.

One other thing I looked into today was planning permission. I phoned the local planning department in the afternoon but it seems the appropriate person was not there. I'll phone them again tomorrow morning. I am pretty sure I won't need permission (or so I'm told) because I'm not in a conservation area and my panels won't go more than 200 mm from my roof. I'll know more tomorrow.