Supply Vs. Demand
UK energy prices are determined by the factors that influence supply and demand; fuel cost, power plant costs, transmission and distribution costs and weather conditions all cause some fluctuation. British energy production is also experiencing a period of unprecedented change, according to recent updates to the UKs energy consumption projections , the continued “phasing out” of the coal fired power stations and the reduction of Nuclear power capability is causing a steady reduction in supply between now and 2024. This is good for the environment and is to be applauded, but the solution to fill the energy “black hole” is an increase of imported electrical power mainly from France and Netherlands. At present we import 6.3% of our national consumption, this will rise to 26% of our national consumption by 2024.
The additional distribution and infrastructure costs to support this will drive up prices. With levels of uncertainty growing regarding our future relationship with the EU is it any wonder why our household bills have increased and are likely to increase further?
For Homeowners and Landlords alike, increases in utility bills just add another “squeeze” when you are trying to make ends meet or achieve a balanced investment especially in student or HMO lettings where utilities are often included. This can either lead to sacrifices or efficiencies made elsewhere or an increase in rents, which is bad for everyone.
With the green deal scheme abandoned by the government and the Solar Panel scheme to FIT (Feed in Tariff) subsidies slashed from 12.03p/kWh to the current rate of 4.14p/kWh the future may look bleak. However the falling cost of installations from 10K to 5 – 8K and an increase in energy bills, people are looking again at the FIT scheme. The attractiveness of utility bill savings, the reducing cost of installing and the current subsidies provided in combination with the export tariff (where you feed power back into the grid) mean that for some property owners the time taken to make back the initial investment in Photovoltaic panels (Solar panels) is significantly less and increasingly cost effective.
New technologies are also improving efficiencies and adding to the mix and with energy costs likely to increase further as we become more dependent on imports, this is definitely something to consider. The energy trust provides an estimate calculator which is useful.
So the short answer is; options are poorly supported by HMG at the moment but as pressure grows on the government to meet their renewable targets there maybe some further incentives, but for now you’ll have to add up the numbers and watch this space.
The really exciting part of this is that new technologies, efficiencies and combinations of both solar and wind renewable technologies are closing this cost gap, this means that independence from the grid and continued dependency on the ever more expensive and volatile energy market is no longer a certainty.
Some of the future tech is really exciting and innovative and available now.
V3Solar’s spinning photovoltaic cones have been able to generate 20 times more energy than traditional static, flat solar panels
This tech is increasingly affordable and capable of providing significant energy efficiencies, giving homeowners options in achieving independence from the grid, minimizing costs and providing isolation from volatile markets that can make the difference between a profitable property and a costly one, every landlords top priority.