Monday 26 October 2015

Self-Consumption of Solar PV Generated Electricity

The Amount Customers can use Themselves now Matters More than Ever

When the UK Feed in Tariff (FIT) launched, people investing in solar were paid the equivalent of 48p/kWh in today’s money for solar energy they generated (irrespective of whether they used it themselves or exported to the grid).  With electricity savings worth around 15p/kWh and export paid at 4.8p/kWh in today’s money the only number that really mattered was how much energy you would generate with your solar panels. Fortunately, solar professionals have accurate tools to forecast the annual yield for a solar, even relatively simplistic approaches such as the MCS calculation get pretty close.

As solar costs have fallen since the start of the FIT, the generation tariff has fallen too.  Now the generation tariff is worth about a quarter of the starting value - 12.47p.  If the government presses ahead with its reckless cutbacks on the FIT, then the generation tariff would be only 1.63p for domestic customers.

As these changes have occurred, the economic basis for installation of solar panels has become more and more driven by the value of the energy savings the system produces.  With the generation tariff at only 1.63p, the energy savings dominate (see the graph below).

Most solar companies have been using a value of 50% to estimate the amount of energy generated by the solar that would be used in the property (and therefore offset energy bills), so called self-consumption.  The justification for doing so is that this is a ‘government figure’ because the amount the FIT pays for export has to be deemed rather than metered, and government set the value of export at 50%.  So logic says that if the export is 50%, then the self-consumption must be 50% too, right?


Just because the government says it is willing to pay the export tariff on 50% of the energy generated, this is not the same as saying that all houses will use 50%, irrespective of the size of the array and energy consumption patterns of the house during the day.

In the past, errors in the estimate of self-consumption have not really mattered to the presentation of the economics.  Right now they are starting to matter.  As the generation tariff is reduced further, they will really matter.

The industry is going to have to develop ways to more accurately assess and predict self-consumption.

So let’s start by having a look at a few examples of real homes with solar.  Thanks to RBeeSolar and 4Eco for allowing me access to anonymised data on their systems.

Each graph shows a full 24 hour period running from midnight to midnight, with mid-day in the centre.  The day is divided into 10 minute sections and the energy flows are shown in watt-hours per 10 minutes.

Blue is electricity pulled from the grid for consumption in the house.  Orange is energy consumed in the house and provided by the solar panels.  Yellow is energy that cannot be used in the house and that is therefore exported to the grid for others to use.  The electricity consumption of the house is the sum of the blue and the orange.

House One

House 1 has relatively low total annualised energy use 2,250 kWh per year.  This figure represents about three quarters of the electricity use of a typical UK home (often taken to be 3,100kWh/year).    The use pattern shows a small morning peak and a larger evening peak.  There is little use above the baseload during the daytime on week-days, but additional electricity use at weekends, indicating a household where occupants are out during the working week.

Data was only available for July, August and September for this house, but the self-consumption rate during this period was only 22%, with 78% of generated energy exported.  The solar system is not especially large at 2.5kWp.

House 1 Self Consumption: 22%

House 2

By contrast, house 2 shows a consistent pattern of electricity use during the working week and weekend, indicating a household that is occupied during daylight hours all week.    The base load is a little higher than for house 1, and there are regular peaks of electricity consumption throughout the day.  

The pattern of electricity use is similar in winter, perhaps with a higher evening consumption.  The graphs clearly illustrate how on a gloomy winter day (Thursday), most of the solar is used in the house, but that there are still sunny days in winter and plenty of export going on. 

Total electricity consumption over the year was 2664kWh, so still a little lower than typical (86%).  The solar system on this house is 4kWp.

House 2 Self Consumption: 24%

House 3

House three has an annual electricity demand of 5,030kWh, comfortably higher than the typical UK house.  It also has a use pattern that indicates people are at home during the working week. When coupled with a  4kWp solar system, this results in a higher self-consumption level, but still only 37%.

House 3 Self Consumption: 37%


The withdrawal of Feed in Tariffs (whether sudden or gradual) is the clear direction of travel.  The result of this trend is that self-consumption of solar electricity becomes the dominant economic justification for installing solar PV.  Any error in the predicted level of self-consumption will have a larger impact on the overall financial returns than has previously been the case.

Based on the small sample considered above, the industry-standard use of a value of 50% for self-consumption of solar generated electricity in domestic installations looks generous.  With increasing availability of monitoring equipment householders will be able to check the accuracy of figures that were used in the sales process. 

Products that divert excess solar electricity to water heating may have a role to play in increasing self-consumption, but the economic savings will depend on the replaced energy that would have been used to heat the water.  The government’s announced intention to retrospectively pay only metered export once smart meters are installed means that if the house has gas-heating, the value of the gas use avoided is similar to the income from exporting the electricity. 

Diversion of excess solar electricity to charge electric vehicles or to battery systems that can store energy for evening use will become more possible as the price point of these technologies continues to fall.  In the meantime it could be that the economic optimum moves away from the current goal of maximising subsidy yield (aiming for 4kWp or as much as will fit) and we begin to offer slightly smaller solar PV systems that produce less excess on sunny days and a higher proportion of self-consumption. 

This maturing market could involve the solar installer fitting monitoring equipment in the house for a short period before making a recommendation about a right-sized solar installation.  From my experience of looking through data on these houses and others, the good news is that people appear to be real creatures of habit.  One or two weeks' worth of monitoring should be enough to give a good indication of the timing of people's energy use.

The industry needs to do more work to understand the relationship between the proportion of self-consumption and the size of the solar installation relative to the size of the annual electricity demand.  It may be that predictive tools, or at least rules of thumb can be developed to allow solar installers to size the solar system to achieve a level of self-consumption knowing the annual energy use of the household.

Thursday 22 October 2015

Scotland Shows the Way on UK Building Regulations

New Rules will Boost Deployment of Solar on New Homes

Ideal for New Build - Roof Integrated PV.  Image:  Viridian Solar

This month, new building regulations came into force in Scotland.  Let’s have a look at what they might mean for solar.

The way the building regulations for energy performance of houses work is that the designers have to keep the calculated carbon dioxide emissions associated with heating the house, providing hot water to occupants and running lights and pumps (but not electrical appliances) below a certain set level.  
The calculated carbon dioxide emissions are assessed using a government approved method (SAP2012), which is available in software form.

The level the designer has to keep below is arrived at by calculating the emissions from a house of the same shape, but with energy performance features defined in the regulations, a so-called ‘notional dwelling’.  The thermal insulation performance (U-value ) for the walls, floor, roof and openings is defined for this notional dwelling as well as other features such as values for air-tightness, the type of heating system and other energy saving measures such as use of low energy light fittings.

The reason for taking this approach is that it is not prescriptive.  It allows the building industry to experiment with combinations of measures that achieve the overall goal (carbon emissions) in the best way for them (which almost always means the cheapest way).

The table below shows a few key features of the notional dwelling for the new Scottish regulations and compares them with the same requirements for the previous regulations and also the current regulations in England.

Regulators also worry that cold, leaky homes might be built with low levels of thermal insulation and lots of bolt-on electricity generation, so they also set minimum levels of performance beyond which it is not possible to go.  These are called backstop values.

Comparing the notional values for 2013 with those for 2015, you can see that the thermal insulation has been tightened up somewhat, but not excessively.  You can also see that Scotland 2015 is not significantly better than England 2013 in this regard.

Where the two countries diverge massively is that the notional house in Scotland includes a PV system on the roof for homes heated with gas, LPG or oil, whereas the English regulations include no renewables at all in the notional dwelling.

The Scottish regulations call for the notional house to have a PV system sized as follows:

kWp = smaller of total floor area x 0.01  --- or---   30% of the roof area based on 0.12kWp/m2

If we take an average semi-detached house as an example, with total floor area of 85 m2 over two floors and a roof pitch of 35 degrees, this equates to a total roof area of 49m2

So the solar installation on the notional house would be the smaller of 0.85kWp or 1.8kWp
But solar installations on notional houses don’t help the solar industry.  What does this mean for real houses that are going to be built in Scotland from now on?

A developer in Scotland seeking to build this 85m2 semi could aim for any of the following:

1. Match the insulation levels in the notional values and install a 0.85kWp solar system
2. Exceed the insulation levels in the notional values and have no solar
3. Relax the insulation levels below the notional values and put a larger solar system on

As I discussed in a previous blog, insulation suffers from a diminishing return which means you need to pay for ever more insulation to make the next improvement.

By contrast, solar PV benefits from a falling marginal cost as you increase the size of the installation.  If you’re going to use solar, it’s more cost effective to use a larger system.  

The feedback I am hearing from housebuilders in Scotland is that they are embracing solar as a big part of their strategy for delivering homes to the new regulations.   Schemes we have seen so far indicate that the solar systems will be closer in size to those installed by householders when retrofitting, perhaps in the range of 2-3 kWp.  This is great news for the solar industry and also for the energy bills of people buying these homes.

If only England and Wales would implement such ambitious targets for new homes too.