Green tech made my home more comfortable and cheaper to live in

Three years ago, I used a hefty chunk of my savings to make my home as green as possible and fully net zero-compatible. Solar panels, a battery, a heat pump, and a chunk of additional insulation all went in, gas for heating and cooking went out.

TLDR: much of what you read about green tech in places like the Daily Telegraph and the Daily Mail is sensationalised nonsense. Last year my total energy bill was £500, while the energy price cap for a standard home was around £1,700. Green tech works, very well. We just haven’t yet seen the political will to get those benefits to those who need them most.

My household is slightly smaller than the UK average (2 people, compared to an average of about 2.4). So, let’s say about £1,500 per year would be a fairer bill for the purposes of comparison. This means my house costs at least £1,000 less to power every year than would be normal, a reduction of around two-thirds.

At the autumn budget, the government made changes that will cut all of our energy bills. Unfortunately, as so often seems to be the case, those on higher incomes will benefit more, primarily because they consume more. The other group that will benefit is households that have electrified their heating, eating, or driving. Of the average £150 annual savings government plans to deliver, around £120 comes from cuts to the price of electricity. All things being equal, my energy bills next year should drop to about £400.

Figure: My household energy bill in 2024 compared with UK benchmarks

So how did I do it? To maximise my savings I needed to sign up to a ​‘time-of-use’ tariff offering cheaper electricity during ​‘off-peak’ periods of the day. Once that was sorted, here is where the returns came from:

1. I am no longer required to pay the gas standing charge.
2. My house consumed less energy because I had improved my insulation
3. My solar panels produced energy that I either used or got paid to export to the grid
4. My battery enabled me to capture energy during cheaper off-peak periods and use it during expensive peak periods
5. My heat pump and induction hob meant I could consume the energy I was cheaply producing and storing rather than importing gas
6. My heat pump produced heat so much more efficiently than a gas boiler that I saved money (even though the price of gas is much cheaper than electricity, per kilowatt-hour)

An added benefit of my project is that my house now spends all of the time at a comfortable ambient temperature. Wild swings between parts of the house and times of the day are a thing of the past and, over summer, the house also handles extreme heat much better too.

To achieve my savings I had to invest – about £17,000 all told. My boiler needed replacing anyway, so if you deduct the £3 – 4,000 that would have cost, you might argue my ​‘new’ investment was about £13 – 14,000. My rate of return was in the order of 6 – 7% per year, but has risen to 8% following the budget announcements. My payback time is around 13 – 14 years. This return is much better than my money would have got in a standard savings account. But it did all take a fair bit of time and effort to do (another investment). My project was contracted back when the government was offering a £5,000 grant towards heat pumps, it’s now at £7,500, so the rates of return today could be quite a bit higher (say 10% per year).

So what’s the catch? Well the main catch is, obviously, that most households don’t have £15,000 sitting around. Many also don’t have the time to research and manage the upgrades. Many won’t have a rooftop suitable for solar panels – which is a major contributor to my gains – and some won’t have space for the water tank. Good installers can also be hard to find.

These obstacles are surmountable. But government still has a lot more work to do if it wants to take real action on tackling the cost-of-living crisis.

First, government must scale-up and speed-up its warm homes plan. Cutting the ECO scheme, without a replacement at the recent budget was an own goal. We must get comfortable with major public spending on upgrading low-income housing. It’s good for householders, good for the climate, good for jobs… and it’s also good for growth. Crucially, if done well it can also cut the spiralling social and economic costs of damp and mould which are blighting so many communities (done badly, it can make these worse).

Second, government should switch to billing energy under our National Energy Guarantee system. At the recent budget, government cut the unit rate of energy on all consumption. While useful to all, the biggest winners will be the wealthiest households. Under our NEG, an initial block of energy consumption would be cut much further, ensuring every household has access to the essentials. Then, higher levels of consumption would face a higher price. This would incentivise energy efficiency, and much faster uptake of home insulation and solar panels.

Third, to make sure households can access those upgrades, government must introduce new low-cost financing mechanisms. In this high-interest rate era, a green loan or mortgage top-up scheme, at a discounted interest rate, is an easy win.

Other important issues include dealing with rental housing: government must require landlords to deliver upgrades to their rented properties – and at their own expense, not their tenants’; and scaling up the workforce. The constant chopping and changing of retrofit schemes, with ECO the latest victim, is seriously hindering the development of reliable, skilled, labour and service standards.

Image: Alex Chapman