The pain and the gain
As regular visitors to this website may know, we have substantially upgraded the Smart Energy installation at our home, to maximise both financial savings and environmental benefits. In ultra-summary, our setup now includes the following major elements:
- 2 Electric Vehicles (EVs) with a combined battery capacity of 130 kWh.
- An Air Source Heat Pump (ASHP) system replacing oil-fired central heating and hot water.
- 32 solar panels giving about 10 kW peak generation under ideal conditions.
- 2 Tesla Powerwall domestic storage batteries with a total capacity of 27.4 kWh, which we charge with the optimum mix of solar and a 100% renewable grid energy supply.
- A smart tariff for that grid supply, enabling us to charge the batteries with cheap off-peak electricity.
There’s more detail on our set up here, for anybody who’s interested. This purpose of this page is to set out the capital cost of our system, and to show how that cost is being paid back by the operating cost savings we are making.
So, we firstly set out below the full scope of our total capital investment in CleanTech: the pain so to speak. That’s because it’s vital to be clear about upfront costs. Basically it essential to know how much pain must be balanced out by the gain which accrues over time in the form of operating cost savings, and which eventually makes the whole thing worthwhile.
Ultimately, it’s all about a pretty simple Pain vs Gain Cost:Benefit equation: ‘if we spend £n thousand on X GreenTech, and that saves us £n a month, how long will it take to pay itself back?’
We are, of course, fully aware that not everybody will be able to make substantial financial investments in ‘going green’ on the scale we have made. We’re only able to due to sheer hard work over the years having allowed us to accumulate some savings. We are most definitely not saying “do it on a big scale, or don’t do it at all”. Absolutely the opposite: you can make a real difference by making just one of the CleanTech changes. It’s perfectly fine to do it step-by-step. A possible incremental approach is set out below.
- Swap your petrol car for an electric model: it’s massively cheaper over time.
- Swap to an off-peak tariff to ‘fuel’ that car with electricity when the grid has got cheap energy to spare.
- Then consider a stationary domestic battery to store that cheap energy for later use when electricity is expensive. With the difference between peak and off-peak electricity costs now over at its highest ever level, an investment in a battery will pay back quicker than ever before.
- Then add some solar panels to charge up your domestic battery with free energy from the sun, further ‘turbocharging’ your savings.
- And finally, when you’re comfortable with it all, you could make the really big move and replace a planet-killing oil or gas boiler with an electrically-powered heat pump.
Every single one of these steps will produce financial savings and will reduce your carbon impact. There’s no ‘right order’ to do things in either, everyone’s circumstances are different. The key thing is to make a start!
Pain Part 1 – Capital Cost of GreenTech at Home
The table below sets out the purchase costs of the GreenTech equipment we have bought over the period 2016 to 2021. We acquired this kit in stages over the six years. We’re setting it out here in a single table for ease of overview. All figures are rounded to the nearest £100 for clarity.
|Pain Part 1: GreenTech works to our home (costs include supply and installation)||Cost|
|32x solar panels for 10 kWp array, including 2x inverters & grid export limiter.||£13,800|
|2x 13.6 kWh Tesla Powerwall batteries, for 27.4 kWh total storage capacity.||£11,700|
|Samsung Air Source Heat Pump system from Evergreen Energy. Produces central heating (CH) & domestic hot water (DHW). Cost includes connection to existing CH radiator plumbing.||£17,900|
|Electrical works: include in-house rewiring & grid upgrade from single to multiphase supply.||£11,600|
|Total cost of GreenTech works to our home||£55,000|
The £55,000 capital cost of all the above equipment and associated works is what we’ve spent to turn our home into a ‘Smart Energy Island’, intelligently storing energy we’ve generated or imported off-peak from our 100% renewable supplier, to power an all-electric heating system, Anne’s pottery kiln, and our general home loads.
Let us be clear: this is significantly more than most people would have to invest. We’re really ‘pushing the boat out’ to radically transform the energy economics of a large, old, house. In a typical, more modern, house you’d probably need only half the solar panels, maybe one storage battery, and a much smaller heat pump would be sufficient to drive the heating and hot water. You’ll almost certainly not need the multiphase grid connection either.
In our case, though, the higher investment is well worth it. We’re getting major savings: so it’s right to transparently record the upfront costs we’ve had to outlay to produce them.
Pain Part 2 – Capital Costs of two Electric Cars
A large chunk of our savings occur because we own two Electric Vehicles (EVs), a Tesla Model X and a Nissan Leaf. We trundle about in them in the normal manner, but we simply don’t pay the insane costs of filling cars up with petrol. Between them, these two cars have 130 kWh of battery capacity, which we fill with our ‘home brew’ solar when it’s sunny and Octopus super-cheapo off peak grid energy when it’s not. The savings amount to several thousand pounds a year. Again, those are the benefits, so it’s right and proper to transparently record the capital costs associated with purchasing these two EVs. The table below sets it out.
|Pain Part 2: Electric Vehicle Purchase and offsetting capital incentives||Cost|
|Purchase price of Tesla Model X 100D Performance (with Ludicrous Mode)||£141,100|
|Tax break: 100% Writing Down Allowance reduced tax payable in Year 1 of ownership||-£63,500|
|Tax break: benefit of 6 years zero road tax to date vs comparable top-end petrol car||-£4,500|
|Net capital cost of Tesla EV after tax breaks||£73,100|
|Purchase price of Nissan Leaf 30 kWh||£38,000|
|Tax break: 100% Writing Down Allowance reduced tax payable in Year 1 of ownership||-£17,100|
|Tax break: benefit of 5 years zero road tax to date vs comparable mid-market petrol car||-£1,000|
|Net capital cost of Nissan EV after tax breaks||£19,900|
|TOTAL NET CAPITAL COSTS OF EV PURCHASE AFTER TAX BREAKS||£93,000|
Note that the gross capital cost of the two cars was substantially reduced by UK Government tax breaks encouraging businesses to own EVs. As we purchased the two cars through our businesses, these very generous incentives were available to us. So the table subtracts these offsetting benefits from the gross cost to arrive at the true net capital cost of the vehicles. We recognise that not everybody owns a business and that these tax breaks may therefore not be applicable. However, employees who receive a company car as part of the remuneration can also benefit from a massive reduction in Benefit in Kind income tax. That’s the main way for EV drivers on PAYE to pocket tens of thousands in hard cash by reducing their tax bills. We explore EV tax incentives etc in more depth here.
Disclaimer: car taxation is a complex field and benefits are highly dependent on the business and/or income taxation bands applicable to any given individual in any given tax year(s). Tax rates can change and incentives can be withdrawn by Government without notice. References to potentially achievable tax benefits in this website are for information and illustrative purposes only and not intended as financial advice. Persons considering the potential tax benefits of EVs are advised to take appropriate professional financial advice. Likewise, incentives supporting the installation of green energy technologies such as renewable microgeneration or heat pumps can (and do) change. Again, thorough research should be undertaken and appropriate professional advice should be sought before entering into any commitment.
Totting it all up, we’ve invested capital of £148,000 in our domestic GreenTech and our EVs over the period from 2016 to date. That’s the net spend, taking into account the tax breaks we got on the electric cars. Happily, that’s all the pain out of the way. Now for the gain!
First off, there’s a slightly quirky benefit for which we need to account. As Tesla early adopters, we got Elon Musk’s canny incentive of “free Supercharging for life” (by which he cleverly partly disguised the high prices charged for early cars). From taking delivery of the Model X in February 2017 through to 31 December 2021, the ‘free miles’ we have charged have saved us £9,700 compared to cost of the fuel we would have needed to travel the same distance in a comparable luxury petrol car. For convenience, we’ve simply treated this as an averaged saving of £167.25 per month in our records to date. However, from 01 January 2022, we are now able to log this benefit precisely and present it to the kWh each month in the savings tables.
To keep the payback calculations accurate, we’ve rolled up the Free Supercharging savings-vs-petrol for the February 2017 to December 2021 period and subtracted them from the capital cost. Stripping out the rounding of all the capital cost inputs, the precise figure we use for calculating payback is £138,331
Before we installed the heat pump, when we had only one Powerwall battery, and only 24 of the full 32 solar panels were in service, we were saving around £5,000 a year, compared to paying standard rates for grid electricity and fuelling petrol cars. This blog post has the detailed report for a 12 month period with this ‘interim’ setup, which also saw us saving around 6 tonnes of CO2 emissions a year.
With our upgraded system now fully in service, we can now go whole hog on the Cost : Benefit calculations, reflecting all the elements listed below.
- All 32 solar panels are now generating electricity.
- We have two Tesla Powerwall batteries which we load up with solar and cheap off-peak grid electricity and discharge to power our home when electricity is expensive.
- We’re still driving the two EVs, completely eliminating the cost of petrol/diesel – which is now a much larger saving than before the energy crisis engendered by the war in Ukraine.
- We’ve changed our electricity supply tariff from Octopus Go (which has a four hour off-peak window for cheap grid imports) to the Octopus Go Faster package. This is slightly more expensive per kWh, but has a five hour off-peak window which is great for charging the cars and the domestic batteries. Luckily, we’re still on a pre-Ukraine version of the Go Faster tariff, which is delivering very substantial savings versus “standard rate” electricity at the UK price cap cost per kWh. We know the economics will change at tariff renewal.
- Most importantly, we’ve made the really big move: scrapping oil-fired central heating in favour of an Air Source Heat Pump system, entirely running on electricity.
In short, we’re now answering the harshest possible payback question. Essentially, “how long will it take to payback the full £138,331 capital investment (net of the ElonFreebie), taking into account all the savings we can now make with the GreenTech kit and cars we now own?”
The answer is basically, far quicker than you’d think!
Over the full year from 01 January 2022 to 31 December 2022, net financial benefit was
Average: £52.44 per day.
Payback in under eight years is projected.
The images below link to monthly and Year To Date summaries of the financial and carbon benefit our Smart Energy setup has delivered from 01 January 2022 onwards. Click the roundel for a full report for each month. Each report is presented as a 5 – 8 page PDF and can be freely downloaded. Please credit this website if you republish, post or otherwise distribute this material. Kindly link back to https://electrifylife.co.uk/financials#PerformanceReports (this page).
We are delighted to be reporting truly exceptional financial and carbon savings performance. The key enablers of this performance are our Air Source Heat Pump from Evergreen Energy and the Go Faster smart tariff from our Octopus Energy. Click the links here for more information.
2022 Full Year
Full Year 2022
The final results are in from 01 January to 31 December 2022. We drove 21,221 miles in EVs. We used electricity for all our home’s consumption, including heating, lighting, hot water, all the usual appliances, and even an energy-hungry electric pottery kiln.
In total, we paid £2,784 for all that energy. We received £2,200 in ‘green incentive’ payments from Government. So, at the end of the year, our overall energy bill for all our driving, all our heating and hot water, and all our other domestic and ceramics business consumption was a net total £584 for the full year.
For the full year, our investment in GreenTech enabled us to capture a Net Financial Benefit of £19,089.70, or £52.44 per day, compared to the costs we would have paid if we had been using OldTech heating oil and petrol, and if we had simply consumed ‘standard rate’ electricity, rather than using batteries to store solar power and maximise cheap off-peak grid imports.
But the biggest news of all is that…
by shifting from petrol to electric cars…
by replacing a oil-fired central heating boiler with an electrically-powered Air Source Heat Pump; and…
by using batteries to store only 100% renewably-generated energy…
we were able to slash our CO2 emissions by an amazing 25.484 tonnes.
We will publish an eBook in early 2023 with all the detail. We’ll post an alert when it’s available.
January Performance Report
£1,795.92 Net Financial Benefit in Month
3.603 tonnes CO2 emissions avoided
February Performance Report
£1,381.26 Net Financial Benefit in Month
2.862 tonnes CO2 emissions avoided
March Performance Report
£2,008.87 Net Financial Benefit in Month
2.532 tonnes CO2 emissions avoided
April Performance Report
£1,734.12 Net Financial Benefit in Month
2.353 tonnes CO2 emissions avoided
May Performance Report
£1,436.86 Net Financial Benefit in Month
1.571 tonnes CO2 emissions avoided
June Performance Report
£1,534.58 Net Financial Benefit in Month
1.401 tonnes CO2 emissions avoided
July Performance Report
£858.6 Net Financial Benefit in Month
0.749 tonnes CO2 emissions avoided
Holiday for 50% of month, so lower EV mileage. Also very low heating demand during hottest July on record, all contributing to lower overall energy use and hence lower financial and carbon benefits compared to energy-intensive months.
August Performance Report
£1,149.30 Net Financial Benefit in Month
1.038 tonnes CO2 emissions avoided
September Performance Report
£1,262.97 Net Financial Benefit in Month
1.341 tonnes CO2 emissions avoided
October Performance Report
£1,545.89 Net Financial Benefit in Month
1.899 tonnes CO2 emissions avoided
November Performance Report
£2,055.01 Net Financial Benefit in Month
2,548 tonnes CO2 emissions avoided
December Performance Report
£2.854.13 Net Financial Benefit in Month
3.758 tonnes CO2 emissions avoided