Anyone for an air source heat pump?

This man would very much like you to have one. His name is Peter Ferguson and he owns and runs Trianco, the Sheffield-based, metal bashing oil-fired boiler maker. I spent a couple of hours with him on Monday, listening to his tale and sharing his dreams and aspirations.

Oil boilers are a mature market. There are perhaps a million of them dotted around the country, mostly in out of the way locations where mains gas can’t reach. Each year, 60,000-odd new ones get installed, mostly as replacements. Trianco have a slug of this market, around 10%, but it’s not growing. Oil boilers, just like solid fuel boilers before them, would seem to be yesterday’s technology. Even with the recent move over to condensing boilers, there doesn’t seem to be much mileage left here for long term growth plans.

The question is what will replace them. The world and their aunt are all harping on about renewables and carbon-free or carbon-lite power systems. With climate change slowly moving centre stage, it’s hard not to conclude that this is where the future lies. But there is still a lot of doubt as to which of the new technologies will succeed and which will fall by the wayside.

Ferguson reckons he’s spotted a market gap here and thinks that Air Source Heat Pumps (ASHP) may just be the next big thing. ASHP are the smaller and lesser known relative of the ground source heat pump (GSHP) which has, in contrast, had quite a lot of attention in recent years. ASHP differs from GSHP in three crucial respects:
• it doesn’t require digging up the garden and rolling out 100s of metres of tubing
• instead it works by taking heat out of the air
• it’s cheap compared to GSHP and to all the other green power systems.

To date, people have thought of heat pumps primarily as space heating devices. Ferguson’s Eureka moment came when he saw that it would be beneficial to position ASHP against solar thermal panels, as an alternative method of delivering hot water for the tap. Instead of spending maybe £3,000 or more installing solar panels on your roof, which, if you were lucky, would deliver just over half your hot water requirements throughout the year, here is a solution which would cost half this price and which would provide all your hot water. Because it’s a heat pump, it delivers around three times the energy it requires to run it, so potentially you could draw off say your 4,000kWh of hot water (typical of a modern household of four) for an outlay of just 1250kWh, cost around £100 a year.

He is particularly interested in the small ASHP units, which are rated at 3kW output. The one in the photo I took is the larger 5kW one, so you can imagine that the 3kW one is almost half this size. Crucially, it is small enough to fit through the average loft hatch, and this in itself opens up a whole new market for heat pumps — small houses without gardens. The unit can get plumbed into the loft where the air temperature will, in any event, be a little higher than outdoors, and in about two hours a day it will be capable of delivering 150lits of hot water, enough for a couple of people. It’s not a renewable power source, as it uses electricity, but because the way heat pumps work, it will use about a third of the electricity an electric immersion heater would use, so it will deliver 6kWh of heat energy for just 2kWh of juice burned.

Will it catch on? Well, it may do. The one thing that makes Ferguson very bullish about his ActivAir heat pumps is that he can sell them for £695 + VAT. Compare that with solar panels (at around £2,500), or indeed any of the other renewable or carbon-lite technologies, and you can see that his ASHP units may well find a new market.

The downsides are that the units are a little on the noisy side to be happily operating indoors. And the recovery rate, the time taken to replenish your hot water cylinder, is rather slow. The 3kW unit would take over two hours to recover, as compared with 30 minutes for a similar-sized cylinder heated by a conventional boiler.

There is also the cost calculation to run through. Although ASHP will deliver three units the heat output for every one unit of electricity required to operate it, that electricity is always going to be more expensive than mains gas. And if the mains gas is a third of the price of mains electricity, then your cost saving vanishes. As it stands, mains gas is rather more expensive than this at the moment, but not by a lot, so the running cost saving is there, but only just. Unless of course you manage to run your ASHP unit on Economy 7, in which case it becomes very cheap to run indeed. But then you’d have it whirring away for a couple of hours every night whilst you slept. If you mounted it correctly, you wouldn’t hear a thing, but it would always be a concern that it could keep you awake.

Trianco’s ASHP units are available in larger sizes. As well as the 3kW output, there are 5kW, 7kW and 12kW. This largest size is capable of taking on GSHP as a whole house space heating solution. Many people feel that it’s got to be less efficient than GSHP because outside air temperatures are habitually lower than winter ground temperatures, but Ferguson’s units work at good efficiencies down to —3°C, which is about as cold as it gets in southern England these days. And at £1895, it is way cheaper than any GSHP unit I have come across.

At the moment, Ferguson is importing his ActivAir units from China, but has high hopes of bringing the metal bashing and assembly functions in house as sales demand rises. It’ll be fascinating to see whether he manages to establish ASHP as a serious contender for the future of home heating. It won’t be for a lack of trying.

Photovoltaic glass

“When a journalist talks about PV cells, we know we are dealing with an amateur.” Jerry Stokes, President of Suntech Europe, drops this little admonition on me as he talks me over their installation at the Kingspan (Code Level 6) Lighthouse at Offsite 2007 (see previous post). As I have already used PV cells several times in the conversation so far, he has already pencilled me in as a numbskull. I reflect on the number of times I have casually written about PV cells over the years. Oh well, you live and learn. Apparently the photovoltaic cells are the tiny little bits that make up the modules, arrays or panels (all of which are OK to refer to) but on their own are not very useful. You need thousands of cells to make a module. I will know next time.

Suntech is an interesting company. It was started in China in 2001 by Shi Zhengrong, a solar engineer. It’s seen explosive growth, mainly supplying the German photovoltaic boom, and is now listed on the NYSE with a valuation of around $5.5billion. How many six-year-old companies have done that in Britain? (Don’t know, but expect answer to be none). Shi, who owns 40% of the company, is now one of the richest men in mainland China. All from making photovoltaics.

At the Offsite exhibition last week, Suntech were showing off a Japanese PV system called Photovol Glass which is the first translucent photovoltaic skin I have seen. It can be used as a substitute for glass in applications like glazed facades and roofs. As well as generating electricity, it cuts out heat transfer and UV radiation, but admits around 10% of daylight, thus making it suitable for large glazed facades or roof panels. Money wasn’t mentioned in my conversation with Stokes, so I can only assume that it costs rather more than traditional PV, which is hardly well-known for being cheap in the first place, but if it rolls out as Suntech hope, it could pave the way for one day becoming a replacement for standard glass. Or maybe not. What does an amateur like me really know about this stuff?

“LCBP SLASH GRANT FUNDING”

You will probably have read in the press that the Chancellor increased grant funding for micro-generation by 50% in March and that the LCBP closed down, also in March, due to over-subscription. It was reported to have run out of monthly funds in the first 90 minutes of March. When it re-launched in early May it was touted as “slashing household funding by 60%”. Peter Wolfe, chief executive of the Renewable Energy Association lead a full scale attack on the LCBP saying, “…this scale-back makes a nonsense of the extra funds from the Chancellor and of the Government’s ambition to bring on-site power to the people.”

But hang on a minute. The LCBP closed down in response to a flood of applications for funds to install wind turbines (largely from a well know DIY shed) that had no possibility of producing any meaningful power. In fact the Chief Executive of that well know DIY shed said in February that “4 out of 5 applications for turbines will fail”. My guess is that the ratio is at best ambitious and even if it was true it meant that 80% of the funds available to the LCBP each month were being allocated to projects that had no possibility of going forward. So far as I can see it made eminent sense to suspend the grant scheme and come up with a plan to exclude the DIY shed retailers.

This “scale-back” will actually only apply to electricity micro-generation - PV and wind turbines. Domestic scale PV has never been a good idea on cost alone. And wind turbines in urban areas just don't work. So why should our taxes go to pay for these technologies. Other technologies - solar thermal, heat pumps, biomass - are unaffected by the change in rules. And bear in mind that 77% of the energy used in the home is in the form of heat. The reality is that there will be more funds available for sensible renewable energy technologies. It is probably unlikey that the Government has really got its act together and I expect the DIY sheds will find a way round the problem, but at least it is a step in the right direction.

Perhaps more interestingly the Government has also shorten the period over which grants will be available and they are now scheduled to end in April 2008. It is difficult to see the justification for this especially in the light of other legislation. Home information Packs, which includes the Energy Performance Certificate, have been put back 8 weeks, but will come; Ecohomes and Code for Sustainable Homes are both due to become mandatory in the next 12 months and both require renewable energy. Am I a cynic or is the thinking that the legislation will force renewable energy to be installed, regardless of grant funding?

Microgeneration: the real costs

Bit by bit, without really planning ahead or indeed any planning at all, I seem to be becoming a strident critic of microgeneration, i.e home-baked renewable power. I criticise the government, always an easy target, for their barmy zero carbon homes scheme and their mean stamp duty tax break for zero carbon homes. Then I turn my guns on Bill Dunster, a far less comfortable target for me as I am otherwise well-disposed towards him. I spend a couple of days worrying about whether I am just being spiteful for the sake of it. Maybe I am developing blogger syndrome where everything exists merely to be shot down in flames by cynics.

So I turn to Wikipedia and to trusty Excel and I start crunching some numbers. How do all the green and not-so-green methods of generating electricity stack up?

Turns out the UK is currently consuming 350 terawatt hours of electricity per annum. That’s 350,000,000,000 kWh. If you divide it by the 65 million people in the UK, it works out at a more manageable 5,300 kWh/annum each, round about average for Europe. In comparison, the USA consumes 12,000 kWh per annum each, India just 480 kWh per annum each.

Now, just suppose you were to try to make this amount of electricity using zero or low carbon sources. How would you go about it? Ignore for the moment all the arguments about practicalities and intermittent supply and everything like that.

350 terawatt hours per annum would require either
• 14,000 giant 10MW off shore wind turbines, operating at around 30% efficiency or
• 260 million 1kW micro wind turbines, operating at 15% efficiency, (that’s roughly ten mounted on every building in the land) or
• 4,000 sq km of PV cells. That’s pretty much the size of a county like Suffolk or Hampshire. Or enough to cover the south facing roofs of around 100 million homes — there are just 25 million in the UK or
• how about 25 European Pressurised Nuclear reactors (EPRs), as being built today in Finland? Each one is designed to have an output of 1600MW.

And what about comparitive costs?






Nuclear power plants cost around £1 billion each, so 25 No. would require £25 billion to supply UK’s 350TWh/a electricity needs. What is harder to factor in is the running costs and the clean-up costs at the end of the lifespan: nuclear power is notoriously difficult to cost because of this.

Giant off shore wind turbines. Around £5 million a piece, so 14,000 would cost £70 billion in total.

Micro-wind turbines. Around £1,500 each from B&Q, so 260 million would cost £525 billion in total.

PV arrays, around £1,000 per m2. A county-full would cost around £3,500 billion.

I think my case rests. Microgeneration is ridiculously expensive, just as I thought.

Payback Time

There is an interesting letter in the May edition of Homebuilding & Renovating from Jonathan Belsey, taking me to task for an article I wrote about solar panels, which appeared in the March edition.

He writes: Although the article gave a nice summary of the available technologies, my heart sank when I saw that, as usual, the author (that’s me he’s talking about) was going to focus on return on investment as the major issue of the article. Yes, even with government grants, solar water heating and power generation are expensive and it will take you many years to recoup the money that you have spent. Why is it, though, that only alternative technologies come in for this treatment from the selfbuild press? Why doesn’t your buyers guide on showers in the same issue of Homebuilding & Renovating tell me how long it would take me to earn my money back? Well, of course, for the simple reason that I will never recoup my investment on a new shower. The same can be said of most other items we build into our houses.

It’s not the first time I have heard this criticism levied. And, in truth, I have a certain amount of sympathy with it. But ultimately, it really doesn’t stack up as an argument, because everything you fit into a house serves some purpose. A shower, for instance, is designed to get you clean: there might be cheaper ways of getting yourself clean — a bowl of water, for instance — but they aren’t as good and most people would choose a shower every time. Same with doors, lights, floor covers, kitchen units and stairs: they are all there because they serve some useful purpose.

But what is the point of a solar panel if not to produce hot water or electricity? Solar hot water panels should be looked at together with boilers. When you choose a boiler, you look for something that is reasonably priced and reasonably efficient at what it does. Looks and size may come into it, just, but the choice is largely down to cost effectiveness, with a hopeful look at comparitive environmental credentials as well. Why should you judge solar hot water panels any differently? They are a supplemental heating source, not a piece of environmental sculpture. If you are rich enough to be able to ignore the commercial realities of fitting solar panels, all well and good, but the great majority of selfbuilders aren’t and they have to weigh up the costs very carefully.

So, in my book, payback time remains a critical tool with which to judge all the renewable technologies. Without such an analysis, we have no way of judging which technologies represent good value.

Zero carbon: just another stupid target

I have been arguing for a little while now that the zero carbon home is not a sensible policy goal. The twin aims of low-energy housing and renewable power generation are both worthy in themselves but it make little sense for developers to be forced into providing both on each and every site, which by current reckoning will be the case after 2016.

Many low energy houses will be built at locations unsuitable for renewable power plant and, conversely, there is absolutely no reason why renewables shouldn’t be employed in all manner of places which have very little to do with low-energy buildings. By asking for both elements to be incorporated into new housing schemes, the government is once again making a target which will end up distorting common sense and ultimately wasting energy and resources.

Nevertheless, I have been surprised just how quickly the deceit that is the zero carbon home has started to unravel. A report in last week’s Building magazine states that two independent reports, both commissioned by housebuilders, have concluded that the best way that housebuilders can meet the zero carbon target on their forthcoming developments will be to switch from selling to leasing the finished product.

What possible difference can this make to energy consumption? Absolutely none at all. But, by so doing, the developers can enter into contracts with the leaseholders to force them to purchase electricity from a renewable power supplier, and that way the developers can claim the houses are zero carbon. Apparently, EU energy rules insist that homeowners must be able to choose any power supplier on the market and the only way of ensuring that the householders don’t switch to non-renewable supplies is to remove the rights that go with property ownership.

Talk about the tail wagging the dog. This really is a ridiculous situation. But this is what happens when you have government by soundbite. Silly targets get set and then clever people find ways of meeting these targets, without the underlying problems being properly addressed.

Eco Bollocks Award: The Windsave WS1000

It is now two and a half months since I tried to buy a Windsave WS1000 wall mounted wind turbine from my local B&Q. Their surveyor turned me down because our house walls are timber, which isn’t regarded as a suitable material to take the strain.

One of the interesting things to emerge from me blogging about the experience was that Windsave themselves saw what I was writing and approached me with their comments. Firstly, Nathan Briggs, who describes himself as a consultant to Windsave, commented on my second blog piece (Oct 12th) that “I'm glad we didn't try to fit a windmill (to your house) and I hope you see the sense that we didn't. With just 5.1metres/second (m/s) I doubt you would have seen anything close to 1000kWh per annum so payback would have been terrible anyway.”

I replied to Nathan with the following observation. “My question back to you is this. My average wind speed, 5.1m/s at 10m height, according to the DTI windspeed database, is pretty typical of southern England and in fact is rather higher than most large urban areas. You are candidly admitting that at this windspeed my payback would be "terrible". So why are Windsaves being sold through B&Q across the country with the oft-stated suggestion that they could generate a third of your household electricity?”

But I never heard from Nathan again so the question was left unanswered. But a few weeks later, I received an email from Anya Gordon who is a sales manager at Windsave in Glasgow. She wrote: “As I am sure you can appreciate, being a new company launching an innovative product such as the WS1000 system into the UK market has not been without its trials. The product has been designed and launched on the basis that it will meet the requirements of the majority. As previously mentioned, we appreciate that it will not be suitable for every application.” Later in the same email, she added: “We have also noted your comments regarding windspeeds and effectiveness of the systems and we are currently upgrading our website and literature to further clarify some of the points you’re raised on your blog.”

There have been some changes to Windsave’s website. In particular a page has appeared called “Assessing Performance.” It says that the average wind speed across the UK is 5.6m/s at 10m above ground level. They also recommend “having our system installed in areas benefiting from wind speeds above 5.0 m/s.”

It’s hard to say what exactly this means. All places will get wind speeds about 5.0m/s at some point during a year but that is a very different thing to an average wind speed of 5.0m/s. Another critical factor that is often overlooked is the fact that the average wind speed data is given for a height of 10m above ground level. The typical Windsave will be mounted at less than half this height, in a location that is almost certainly going to prove to be turbulent. The projected power outputs are in reality amazingly low. They themselves are indicating that a WS1000 located on my house would have generated around 175kWh per annum.

Reports arriving from other sources suggest that even this sort of output is fanciful.
• The St Albans Eco House has a Windsave fitted. It’s first two weeks of operation produced just 500watts of electricity.
• Bill Dunster, the Bedzed architect and big wind turbine fan, has lived with a competitor to the Windsave, the Swift, for over a year and has yet to get any power out of it at all!
• The well-known green activist Donnachadh McCarthy found that his roof mounted turbine in London generated just 1.3kWh in two months. His comment to me: "It is a beautiful machine, it is silent but it vibrates and the output is miserably low. My view is that they are still experimental and have serious technical obstacles still to overcome. Buy them if you wish to support the research but not if you wish to save CO2.”

Which leads us to the big question that Nathan Briggs failed to answer back in October. It’s all very well Windsave selling a product of questionable provenance. But why, oh why, is B&Q pushing them out of its stores all over lowland England where they just will not work? Here is what it says on the B&Q website today: the Windsave wind turbine “could contribute to a potential saving of up to 30% for the average home if there is optimum wind speed at the site.”

It’s a very short step from that to “it can save around 30% of your electricity bill” which is what I was told in B&Q by an impressionable sales assistant. And an impressionable customer will of course hear exactly what they want to hear.

But it’s time they heard the real story. Unless you live in a very windy spot, a Windsave (or any other similar wall or roof mounted product) will not generate any meaningful power output at all. Come on, it’s time to admit that the roof-mounted wind turbine industry is a complete fiasco. Good money is being thrown at an invention that doesn’t work. This is the Sinclair C5 of the Noughties. As such, the Windsave WS100 becomes the second winner of my coveted Eco-Bollocks award.

Renewable Energy Subsidies

The Low Carbon Buildings Programme (LCBP) has been running since April this year. It’s a DTI funded grant scheme to encourage people to fit renewable energy technologies into their homes. It replaced an earlier scheme called the Blue Skies Grant.

It’s been heavily oversubscribed. It was anticipated that the funding for the scheme would be £3million over three years but this figure has already been surpassed and they have had to raise monies from other kitties to keep it going. Renewables are fashionable, as never before.

This table is drawn from the LCBP website. It shows just how the money is being distributed. It is interesting because it shows which technologies are the most popular (the No of Projects) and which are attracting the most money (Money Committed). They are not one and the same.

Quite why PV cells should be so heavily subsidised is a good question. In terms of bang per buck, they are easily the most expensive of the options. They account for just 11% of grant-aided installations and yet account for 55% of the grant money. Even with these large grants, they are still a hell of a long way from having a sensible payback.

I have ignored the UK outside England. This is because both Scotland and Northern Ireland have separate— and more generous — schemes that are available for some technologies but not all of them, so their inclusion would tend to skew the figures.

Contacts

• Low Carbon Buildings programme for all UK

• Action Renewables for grants in Northern Ireland

• Scotland has a grant programme called the Scottish Community and Householder Renewables Initiative (SCHRI). They like snappy names in Scotland. It handles grants for everything except solar PV. They don’t appear to have a website, or at least I can’t find it, but there is a very helpful lassie on 0800 138 8858.

• VAT position on renewables: On new builds, solar panels are zero-rated, as are the great bulk of fixtures and fittings. If fitting solar panels onto an existing house, the VAT rate is 5%.

• Subsidies: the government pays a subsidy to all generators of renewable electricity, whether grid connected or not. This is known as the Renewables Obligation Certificate or ROC. The value is driven by market forces but is currently around 4.5p per kWh or unit of electricity, equivalent to £45 for a megawatt hour.

Rejected by Windsave

Following on from my last post, the Windsave surveyor came today, took one look around the house and said “Sorry, no can do.” The reason our house fails the Windsave test is that the upper storey is covered in timber clapboarding and that isn’t felt to be strong enough to hold onto a wind turbine. I can get a full refund but I have to go back into B&Q in person to collect.

There were lots of questions I wanted to ask this guy but there didn’t seem to be a lot of point. “Will it be noisy?” or “Will it attract lightning?” seem a bit pointless if you aren’t going to have one. And, to be honest, I am not sure this guy would have known the answer in any event. He was just there to make an assessment. I don’t think he had been working for them for too long and I suspect he wouldn’t have known the answers.

But I did manage a couple of questions. One was “Do they need planning permission?” He reckoned not, unless the house was listed or in a conservation area. This conflicts with my local council: I phoned them earlier in the week and they didn’t sound very sure but advised me that it would fall outside the normal permitted development rights and would therefore require a planning application.

I also asked him how busy he was. The answer was very busy. He has done 30 visits in the last two weeks. He also said there have been 28,000 enquiries logged via the Windsave website.

Finally, I asked him how much electricity I could hope to generate. “They reckon that you could save up to a third of your electricity bill with one of these.”

Now I haven’t been entirely somnolent since my visit to B&Q last week. And I expect that this casual claim is the reason that Windsave is attracting so much attention. The payback suddenly looks pretty attractive, especially when installation grants are taken into account. But is it accurate? Just how much power can something like this produce?

There doesn’t seem to be a simple answer to this. The biggest factor affecting it is the amount of wind you get. The power output increases exponentially with windspeed:
• at a windspeed below 3metres/second, it doesn’t produce any output at all
• at a windspeed of 6m/s, you get about 100 watts
• at a windspeed of 12m/s, you get 1,000 watts

So you go scurrying around looking for average wind speed data. It’s there, on the DTI website, if you can handle converting a postcode into a Landranger co-ordinate. Ours is just 5.1m/s, on the low side but pretty typical for lowland England. The likely output is calculated from the average wind speed — Windsave seem to suggest you get a little bit more than you might expect. Their website is fairly helpful in this respect. But there can be no guarantee that you will get what it says on the tin and thus, even with the most sophisticated calcs, you can really only make a rough approximation of likely output.

Nevertheless, you can see that at an average windspeed of just 5.1m/s, we were never going to get that much power out. Possibly 1,000kWh per annum, if we were lucky. Probably rather less. Enough to power the proverbial 60w light bulb but not much more. Having said that, if we lived somewhere where the windspeed was higher, even by just 1m/s, we could be getting three or even five times more power out of it over the course of a year. But I suspect that such locations are few and far between. I hadn't realised just how crucial the average windspeed data is in analysing the cost effectiveness of a wind turbine, but it is the No 1 critical factor. It's something that Windsave don't highlight, but arguably should.

God help me, I've gone and bought a rooftop wind turbine!

Well I was in B&Q last week looking for a curtain rail and I saw this
Windsave roof mounted wind turbine on display. I got talking to a bloke called Malcolm, who was sort of in charge (it was the first day of this promotion) and the next thing I knew, I had bought one. It's only £1498, inc VAT and installation. I figured there wasn't that much to lose. I mean, what are credit cards for if not the odd spontaneous splurge?

I got home. Then the doubts really started to kick in. How can it possibly generate any sensible amount of electricity? Will the neighbours think I am being a poser? Or a Tory? Will it make a noise and keep us awake at night? Will it attract lightning and blow all the power out? Will it pull the gable wall down? What will the insurance company make of it? Have I gone stark raving bonkers? The Mrs was not best pleased.

D-Day is this Thursday when "an assessor" comes along to take a look at our house. I am rather hoping that he says we are not a suitable case for treatment and that I can have my money back and that I can write the whole thing off to experience. But another part of me is secretly hoping that it works as advertised. Wouldn't it be brilliant if it does? Then I can leave the computer in sleep mode all night long and not feel guilty.

I am none too happy about paying in advance for anything. Paying in advance for a wind turbine that may be unsuitable and, even if it is, will probably require planning permission seems pretty outrageous. But on the other hand, it is so cheap, I can't quite see how Windsave could possibly make any money out of it without taking cash upfront. And I feel much happier about trying to get a refund from B&Q than I do from a small business in Scotland.

Will report more after our Thursday feasibility study.

On solar panels

Leaving aside any green feelings you might have about saving the planet, the brutal economic reality is that roof-mounted hot water solar panels have not been a good investment. At a typical installed cost of between £2,000 and £3,000, and rather more than this for the more efficient evacuated tube systems (pictured), you would need to save £300 a year on your fuel bills to get a ten-year return, and this was never going to happen. The harsh reality has always been that your roof panels would be defunct before your investment could ever be repaid.

But, and it’s a big but, times change.

• 1. There are newly announced government grants, available in England & Wales, to reduce the installation costs of solar panels. It’s only £400 but it’s a start.

• 2. We are now living with much higher fuel charges, which increase the savings brought about by installing solar panels.

•3. We are using more hot water than ever. The more we use, the more useful solar panels become, for they are quite capable of producing bucket loads of hot water when the sun shines. In fact, during the summer months, they produce far more hot water than you could realistically use. In the winter, things are rather different, but even if you assume that solar panels only contribute meaningful supplies of hot water for six months of the year, the economic calculus is turning in their favour.

So what do the calculations currently look like?

Roof mounted solar panels can supply you with an average of 300 litres of hot water each a day for maybe six months of the year, provided you have a big enough cylinder to store the hot water.

That 300litres requires 25kWh of heat to lift the temperature through 50°C.
• via a gas-fired boiler, this would cost 70p a day, potential saving £125/annum
• via an oil-fired boiler, this would cost £1.00p, potential saving £175/annum
• via an electric heat pump, this would cost 80p per day, potential saving £150/annum

This assumes that you would actually use 300litres of hot water every day during the summer. It’s a lot but it’s more or less what our family of five consumes so it’s not inconceivable.

What this means is that for the first time there is a payback on solar panels that is shorter than their lifespan, generally agreed at between 20 and 25 years. It’s still above that magic ten-year payback period at which financiers tend to get interested but, in the case of oil-fired systems, it’s not that far off. It would take another 25% hike in oil prices to make solar panels a gilt-edged investment, without any grant aid. You’d still need to be a fairly big water consumer and you’d need to have your hot water storage optimised, so it wouldn’t suit every household for sure. But it still represents a major sea change for the solar panel industry. If you take a view that energy prices will, say, double within the next twenty years — and oil has trebled in the past six — then solar panels are already a very solid investment.

PS The payback time on installing photovoltaic panels — the ones which produce electricity, rather than hot water — is still way longer than their anticipated lifespan.

Heat pumps: just how good are they?

Over the past few weeks, the Independent has been carrying what it calls an Advertisement Promotion for Ice Energy heat pumps. It’s a full page and it appears in their Wednesday property supplement. The key feature of this promotion is a green boxed-out section which contains some data which is entitled Typical cost savings of a ground source heat pump (GSHP) against oil and gas. Here’s what it contains:

• House type: 230m2 detached property in a rural location comprising 2 bathrooms, 4 bedrooms and 3 reception rooms, underfloor heating installed throughout

• Annual energy consumption: 32,400kWh, based on a heat requirement of 45W/m2 for central heating and domestic hot water

• Annual energy costs:
Oil 32,400 x 0.0357 x 1.25 = £1,446
Gas 32,400 x 0.02 x 1.25 = £810
GSHP: 8,120 x 0.07 = £568

Assumptions: heating oil costing 3.57p/kWh and boiler efficiency 75%, gas costing 2p/kWh and boiler efficiency 75%, electricity costing 7p/kWh and GSHP efficiency being 400%

There is some more stuff about how boilers only last 12 years and would need replacing before a GSHP system, which will last 25 years, but this is essentially a side issue. The central claim is that it is much cheaper to run a GSHP system than either oil or gas. It looks too good to be true. Is it?

First assumption. Will a 230m2 detached house really take 32,400kWh per annum to provide space heating and hot water? It could but if it was a newly built house and it took that much, you’d be very disappointed. We live in a 200m2 house with oil-fired heating: the house was built in 1992 to slightly above thermal envelope standards, which are much lower than those currently operating. We burn 27,700kWh/annum. Now this theoretical house is larger than ours by 15% - that makes 27,700 into 31,855kWh, very similar to Ice Energy’s figure. But, and it’s a BIG BUT, this is our consumption of oil, not our heating requirements. Ice Energy multiply this 32,400 by 1.25 to take account of a boiler running at 75% efficiency. I have an idea that our 14-year-old (and still going strong) Boulter boiler burns at around 75% efficiency, so our actual heating requirement is much less than our consumption figure.

Coupled to which, our energy bills could have been much lower still if we had built to 2002 standards. So, Ice Energy, you are over egging this particular pudding. A newish 230m2 house really shouldn’t need anything like 32,400kWh to keep warm. 20,000kWh would be much closer to the mark, and it could be much less if built green.

Second assumption. Energy costs. I think Ice Energy’s take on energy costs is pretty accurate as a snapshot of what is happening in the market as of now. What it will be like over a 25-year period is anyone’s guess but 2005 was marked by much higher oil prices, slightly higher gas prices and no change as yet in electricity prices. Logic would seem to suggest that the price ratios are currently out of equilibrium and that either oil will fall or electricity will rise.

Third assumption: the efficiencies of boilers v GSHP. They have suggested that boilers operate at around 75% efficiency. The new generation of condensing boilers are designed to operate at around 90%. They have also suggested that the efficiency of GSHP is 400% - i.e. that every unit of electricity fed into the system produces four units heat output. I think that’s high, at the top end of what we expect from GSHP. It might get to that sort of figure in spring or autumn when it’s not doing much work, but in the depths of winter it’s not going to get there. And as for heating domestic hot water, it’s never going to get there. In fact as regards hot water, GSHP is hardly any more efficient than using an immersion heater. I would have thought a more realistic assessment of GSHP efficiency would put it at between 2.5 and 3.0, say 2.8 for arguments sake.

So let’s replay the annual energy costs with my assumptions, rather than Ice Energy’s.

• House type: 230m2 detached property in a rural location comprising 2 bathrooms, 4 bedrooms and 3 reception rooms, underfloor heating installed throughout

• Annual energy consumption: 20,000kWh, based on a heat requirement of 25W/m2 for central heating and domestic hot water

• Annual energy costs:
Oil 20,000 x 0.0357 x 1.1 = £785
Gas 20,000 x 0.02 x 1.1 = £440
GSHP: 7,150 x 0.07 = £500

Assumptions: heating oil costing 3.57p/kWh and boiler efficiency 90%, gas costing 2p/kWh and boiler efficiency 90%, electricity costing 7p/kWh and GSHP efficiency being 280%

I think that’s a far more realistic appraisal of what Ice Energy and the whole GSHP industry are offering. It is cheap to run, but not phenomenally cheap. I am familiar with an Ice Energy installation where the fuel bills have been monitored and the outcome is around 36kWh/m2/annum, which would make their notional 230m2 house come in at 8,500kWh/annum. And you have to set against that much higher installation costs, typically around twice as much as an oil-fired boiler and maybe three times as much as a gas-fired one.

In short, GSHP is currently, at today’s fuel prices, a compelling option for home heating in a newly built house. But not nearly as compelling as Ice Energy would have us believe.

Ground source heat pumps

The ten-year payback is here

One of the things 2005 will be remembered for is oil prices. We’ve seen the biggest hike in prices since the 1970s and the signs are that it’s not about to come back down anytime soon, if ever. Oil is the key in determining all energy prices and if the oil price heads north, then sure enough, gas and electricity will follow along in due course. But how soon, and by how much?

It’s a subject I turned my attention to last week as I sought to update my now hopelessly inadequate table on comparative heating costs, on p208 of the 6th edition. This is a key table in my book, the one that is designed to be used to make that all-important decision about how a new house should be heated. The one currently in print is based on an oil cost of 19.5p/lt (equivalent to 1.9p/kWh), a mains gas cost of 1.5p/kWh and an electricity cost of 6.5p/kWh. Yet my last tank of oil cost 34p/lt, a 75% increase.

LPG, which tracks the oil price quite closely, is up by a similar percentage, so it remains about 30% more expensive than oil. But price rises in gas and electricity are much more muted. Making direct comparisons is not easy because of the opening up of the market to dozens of suppliers, each with their own tariffs and payment terms, but the basic drift is that gas is up to around 1.8p/kWh, a 20% rise, whilst electricity still seems to be widely available for under 7p/kWh. Energy analysts seem to think that significant price rises are about to come through in these markets but they haven’t happened yet.

So what effect will this have on comparative heating costs? Mains gas will continue to be a no-brainer for home heating, if you have access to it. But a large proportion of selfbuilds don’t and here the equations are changing. In my last edition, published late 2004, oil only narrowly beat electric ground source heat pumps (GSHP) over a 20-year timespan.

The equation isn’t difficult. The GSHP costs around twice as much to install as an oil boiler plus tank but is cheaper to run because it creates around three to four units of heat for every unit of electricity burned. With oil prices at 2004 levels, it took around 20 years to recover your investment in GSHP: but with current oil prices, this payback time has fallen to less than ten years. In addition to this, the installation prices of oil boilers and tanks is set to get more expensive (though admittedly more efficient) as new legislation takes effect, whilst the market for GSHP is expanding so rapidly that prices seem to be becoming keener. Plus GSHP is still eligible for the Clear Skies grant, worth £1200.

GSHP comes with a couple of other plus points. You don’t have an unsightly oil tank in your garden and the equipment is silent and has no flue. On the minus side, it works most efficiently at heating water to relatively low temperatures, such as you would use with underfloor heating (usually 55°C). It does therefore require a good-sized hot water tank to have a decent buffer of hot water on site. And it requires garden space of at least three times the heated footprint: thus if you are hoping to heat a 150m2 house, you will need 450m2 of garden in which to run the pipe.

Currently domestic heating oil is around half the price of electricity in the UK market. If this ratio holds, then GSHP will be the heating system of choice for all new off-mains gas homes. Oil heating systems will only regain their competitive advantage if the price differential returns to its historical 1:3 ratio (oil:electricity). For that, we would need to see electricity prices rising to around 10p/kWh, or oil prices falling back to 2004 levels.