Why we should spend on Renewable Energy

There is a kind of unreasoned hysteria which affects some people when it comes to measures to control climate change. Those who do not think climate change a threat are doomsayers; they hold that if we spend our money on solar panels and wind turbines it will bring economic ruin, as these devices are far too expensive to be justified. They argue that such expenditure will make our lives unduly expensive and make our industries and services uncompetitive. In fact the doom and gloom spread by these ideas is at least as doomy and gloomy as the doom and gloom spread by environmentalist who want to control climate change and have nations invest in clean renewable energy. Continue reading

Why should anyone buy a solar system? The Value Propositions

Why should anyone buy a solar system?

For most people this is the critical question that the solar thermal industry needs to answer. We have the product, we have the technology, but why should anyone part with their hard earned cash – for a solar heating or a solar water heating system?A good solar system costs around £4000 to install. In addition there might be some costs which you need to incur but here I am asking to focus focus on the solar related costs and not any additional plumbing upgrades that you need.

What then is the value for you to have a solar water heating system?

You spend more than you think on heating water

How much do you spend on your water heating bill? It is hard to know because your bill will not show you the money divided between all the energy applications in your home. If you look at government statistics around 24% of your household energy is spent on water heating. Water heating uses more energy than all your lighting and appliances put together. If you use gas or oil or LPG for water and central heating statistics show around a third of their bills are spent on water heating.

If you live in a well insulated double glazed home the proportion of heat energy used for water heating will be higher because however much energy you can save by home measures such as draught proofing and cavity wall insulation you need to use actual generated energy to heat water.

 If your lifestyle is such that you shower every day or twice a day you will also be spending a greater proportion of your energy on water heating.

 You will spend the money on energy anyway.

I assume that you are not going stop washing and showering so wherever you live you are going to spend the money anyway. A good solar system will cover 50% to 70% of your hot water. If you do the basic maths you will see that for oil, LPG and electric heating systems solar will save you at least £280 a year from day one. The savings are less with gas, but they will still be significant.

You are not just buying an appliance that heats water with a solar system you are buying future energy that you will need

A solar water heating system uses a fuel that is free – daylight – and daylight is not in short or diminishing supply and it is not taxed. Once you have bought the system you will reduce your energy utility bills. To the extent that the solar system displaces your fossil fuel, you are completely protected against future fuel price rises.

 The more hot water you use the greater your savings.

How often do you or your family bathe or shower or wash clothes? Do you have a heated pool? The more energy you use on these things the greater your savings will be. If you live alone and bathe once a week, a solar system will not provide you with great financial savings.

Unlike buying a boiler and paying for fuel you do get a payback with a solar system.

One day, usually somewhere between eight and twelve years from when you purchase your solar system, the system (unlike any other household appliance) will pay for itself. The precise day when it does this will depend in part on what happens to fossil fuel energy prices in the future.

You are getting some energy security

A war, a hurricane or bad weather event or the ever increasing energy demands of China and India may in the future cause problems with our nations’ energy security as the North Sea oil and gas has already peaked. A solar system provides you with some security that whatever happens elsewhere, your hot water supply will be secure.

You will help in the fight against climate change and pollution

You will significantly reduce your own carbon footprint. If you are using electricity or gas the carbon dioxide savings for a solar water heating system will be over a tonne a year and if you are using natural gas it will be around two fifths of a tonne a year, but again the precise carbon savings depends on your hot water usage.

You will add to the value of your home.

I cannot give you any detailed research to back this up, but Genersys customer feedback seems to suggest that if you fit a high quality in roof Genersys solar system you will put more on the value of your home than the system cost you.

A solar system is not just about a lifestyle choice – there is good value to be had and for most people it is a wise and profitable investment especially for large families and those off the gas network.

Investment turmoil and solar systems – the true return on capital

The financial markets are in turmoil. Some banks are going through difficult times, as recent happenings at the Northern Rock and Bear Sterns demonstrate. Some analysts fear that the worse is yet to come as US dollar rates fall and interest rates throughout the world are turning down, producing lower returns on investment.

If you have money on the stock exchange you will find that although most stocks are still producing income, the capital value of them is declining as markets fear that the financial turmoil will hit equities. Property values are falling. Turmoil in the world financial markets causes turmoil in the economies of individuals. Your savings, with which you hoped to provide for your old age, are growing less valuable, your house is getting less valuable, and your income from your savings is declining and in some cases moving into negative areas.  It can be hard to figure out what you should do.  Continue reading

What you should expect from your solar thermal system

There are still various misleading pieces of advice that you get about solar thermal systems – some of them from organisations and people who should know better. If you are laying out four or more thousand pounds for a solar thermal system – usually for water heating – what should you expect from it? I set out below what all good systems should offer.  Continue reading

Gordon Brown’s solar panels and David Cameron’s turbine

Hilary Benn has been quiet this week because he has been very busy saving us all from global warming in Bali, although I do not think he has any takers for his Climate Change Bill, except of course the lemmings who always vote for their party, right or wrong, at Westminster.    

It looks like Bali will end up with non- binding targets as a compromise. Binding targets are not being adhered to in any event so I don’t see that non binding targets will make any difference. Compromises are all very fine in some fields but unfortunately the laws of physics do not compromise.  

Meanwhile our leader, Gordon Brown, has solar thermal panels up on his house in Fife while David Cameron has a small wind turbine on his house in London. Some people have been trying to assess which is the greenest in the press.

It has been reported that Cameron’s wind turbine has a pay back of 60 years and Brown’s has a pay back of 100 years.  Both figures are complete nonsense and seemed to be based on a simpleton’s view of physics and a pre-school child’s view of economics.

Savings have to depend on the energy use by the household where the renewable technology is installed. Actual payback has to take account of all the financial benefits; these long wrong payback figures are based on energy prices several years ago and assume that energy prices will remain constant forever. 

If payback is important (and why do journalists imply that renewable energy installations should have payback when fossil fuel installations have none?) you have to do the figures properly. If you believe that no fossil fuel prices will increase during the next 100 years, you cannot be living in this world. 

Of course, it should be apparent even to the most ignorant that payback is nothing to do with being green. Payback is an economic concept under which you can calculate how long it takes to get your money back on an investment from savings that the investment generates. 

I will deal with Mr Cameron’s wind turbine first. It is located in a city, where there is doubtless a great deal of wind shelter and it is small; the smaller the turbine the less efficient it is. It probably produces around 20% of its rating but calculating wind energy savings is a complex and difficult task; I would expect Mr Cameron to get a payback in less than 25 years although I am not sure. 

Of course Mr Cameron will never get his money back from the utility company that will continue to supply most of his electricity, despite his wind turbine, so offering a payback is a bonus to be green, not the rationale for being green.  The real payback for Mr Cameron and for the planet will be the carbon dioxide reduction, which will last as long as the turbine lasts – probably around 15 years. 

Mr Brown seems to be unfairly dealt with; I have not visited his home but from the photographs that appeared in the newspapers some time ago I gather that he had solar thermal panels installed; the 100 year payback was probably calculated on the basis of the much more expensive photovoltaic electricity producing panels, and even then 100 years is a gross exaggeration. 

A typical householder installing a solar thermal system will usually get his or her money back in eight to twelve years, when you take into account future fuel costs, lower boiler servicing, and longer boiler life and allow for inflation and loss of use of capital. Much depends on which fossil fuel is being displaced. 

Much longer payback figures apply if you are unfortunate enough to be sold a system by a “cowboy” operator that charges double or treble the normal price, but there are very few of them around these days and Mr Brown does not seem to be the kind of chap to buy from one of these companies. 

His personal payback will be lower than that of a typical family because he rarely lives in his house in Fife, for obvious reasons. The solar system will be generating free energy that no one will use. Again the real savings will be the carbon savings – at least half a tonne a year of carbon dioxide if the system displaces gas, nearly a tonne if it displaces oil and one and a quarter tonnes if it displaces electricity. The savings will last (if Mr Brown has high quality panels) for somewhere between 20 and 40 years.

Everyone who reads my writings knows that I am not reluctant to criticise politicians, to designate them and scoundrels, rogues and incompetents when it comes to their shabby governance of the environment; but when they do something right then it is equally important to point it out in the hope that they will do the right thing more often. 

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