Solar Sourced Electricity Generation

There are around 350 Solar installation in Orkney. Most of these are domestic (less than 4kw). These may be roof or ground mounted. Most of these installations were done when the Feed in Tariff (FiT) rates were very generous and economic payback times quite short. Now that FiT tariffs are very low and due to end this year the payback time is much longer. This has drastically reduced the level of new installations which are now mostly in ‘new builds’.

Why would you want to install solar now?

You may wish to do it solely for environmental reasons. It is clean electricity and helps reduce your carbon footprint. However for most people the drive for Solar is one both for cost and environmental reasons. The section below lays out the economic case and how you can make it work. 

The economics of solar generation

Early (2011/3) installations – In Orkney a typical 4kw installation can produce 3000kwh of electricity in a year. At the highest rate of FiT tariff this can produce around £1800 of income per year. The early installations cost around £10k. This gives a payback of around 7 years. If some of the electricity can be used in the home rather than exported to the grid then the payback is further reduced.

Post March 2019 installations – The good news is that the cost of installing a 4kw system is now down to around £7-8k. The bad news is that the FiT tariff is ending in March 2019. So how can the economic case still stack up? The key to this is to maximise the use of the electricity that is generated in your home. The problem is that 80% of the generation is in summer during the day when home usage is low.

If the best case is taken where 100% of the electricity generated is consumed in the home then that saves paying for the usage from the grid.

If we assume the cost of grid electricity is 32p/kwh then the annual saving is £0.32 x 3000kwh = £960. Against an installation cost of £8k that gives a payback of 8.3 years. The usual life of a system is around 25 years.

So how can you ensure that you use all the electricity that you generate? Typically a system will generate 20kwh of electricity on a sunny day in summer. How can you use that all – below is a list of potential ways to do this:

  • Heat your hot water during the day – this will use around 3-4kwh
  • Do your washing / drying / ironing during the day – this will use 1-2kwh
  • Install a storage heater that runs off your solar and charge it up during the day – this could be useful in the spring and autumn – this will use 10-15kwh

The above are free or low cost things to do to help use the electricity. The list below shows other Renewable investments that could be used in conjunction with Solar to make it work for you:

  • Invest in an EV. If you are able to charge at home during the day this would use 10kwh to 20kwh depending on battery size and state of charge.
  • Invest in a Home Heat battery. This allows you to convert the electricity generated into heat which is stored in the battery. These batteries can have a capacity of up to 14kwh and the heat stored can be used to heat your hot water or provide some heating for your home.

Note – Any cost / benefit calculations contained in this article are for illustration only and must not be assumed as accurate for any physical installation. Each individual installation should be assessed for costs and benefits as part of its financial justification.