A blog post

What makes up the average energy bill? – Save now by going solar

Posted on the 20 January, 2011 at 7:53 pm Written by in Blog, Finance, Fuel prices, Government

According to a report published by Ofgem on 17th January 2011, the average household supplied by the “big six” energy suppliers consumes 3,300 kWh of electricity and 16,500 kWh for gas.

Ofgem also explain how these costs are made up and to what level, for example “wholesale energy, supply costs and profit margin” account for 63% of electricity bills with the rest made up of distribution/transmission charges, 5% VAT, environmental costs and meter provision – read the full Ofgem report.

In money terms this means the average gas bill for a standard direct debit account is £608. For electricity it is £424, making a combined energy bill of £1032 per year.

One way to reduce your reliance on energy bought from the grid is to install a solar photovoltaic (PV) system onto your home or business. “The main incentive for going solar is the introduction of Feed-in Tariffs (FITs), where you are paid an above market rate for the energy that your PV system generates” says David Houston, Managing Director of Chester based MCS solar installers PV FIT Ltd. “A typical PV FIT householder can benefit from a tax free income in excess of £1000+ per year, which will rise with inflation and is Government guaranteed for 25 years”.

An average solar pv system consists of 16 panels with a peak output of 2.96kWp. Here’s how installing solar panels can reduce your energy costs:
  • A 2.96kW pv system installed on a South facing unshaded pitched roof at 30 degrees
  • It will deliver approx. 2162 kWh per year (according to SAP 2009)
  • You will qualify for the top rate of fit at 41.3p/kWh = 2162 x 41.3 = £892.90 FIT income
  • You will use on average 50%, in this case 1081 kWh, of the solar energy you generate in your home. This will save you paying for electricity from the grid, which if you currently pay 14p/kWh will save you £151.34
  • You then sell the surplus energy back to your energy supplier who will pay you 3p/kWh, generating an additional income of £32.43
  • Combined annual income and savings amount to £1076.67, equivalent to 96% of the average household energy bill.

The whole solar installation will cost £11,299 (incl VAT), meaning you can see your money back in *10.5 years, and an additional 14.5 years of profit!

Getting a quote from PV FIT couldn’t be easier…

1. Call us or fill in our solar survey form

2. We will complete a 20 minute survey over the phone to determine if your installation is feasible

3. We email you a fixed price comprehensive quotation open for 30 days, detailing the equipment we will supply, how long it will take to install, and an estimate of how much you will earn through the FIT

4. You read through the information and then contact us with any queries. If you are happy with our price and rest of the information provided you place your order

5. We arrange for an engineer to visit you to check over survey and agree an installation date; as well as agreeing with you where you would like cables will run and equipment is to be located. They then return on the agreed date to complete your installation, after which we complete required forms and liaise with your energy supplier to enable you to claim your FIT.

It couldn’t be simpler! Contact us PV FIT today for your free solar survey.

*Note: The above example is designed to demonstrate basic return as does not take into account inflation, time value of money or savings on tax versus other forms of investment. Performance estimates are calculated using the Governments Standard assessment procedure (SAP) and are for use as guidance only, as it is impossible for us to guarantee the performance of your system due to changes in the weather from year to year.