Zero energy bills?

Our energy demand varies at different times of the year (higher in the winter) and throughout the day (higher from 16:00 to 19:00). Some energy suppliers charge lower rates for non peak usage. If you can switch the times at which electricity is consumed you can reduce the price of electricity and incidentally reduce the percentage of energy production that requires gas supply.

We are starting to see more electricity tariffs that reflect this. These tariffs are a more sophisticated version of the old Economy 7 tariff. They offer cheaper power during the day and weekday nights but you pay a higher rate for any consumption at peak times.  In order to get on one of these tariffs you would usually need a smart meter and typically you would be billed on a half hourly billing system. The problem with these tariffs is that most people are not organised enough to constantly monitor their usage.

The use of solar panels combined with batteries is starting to supplement this model. When it is sunny, the solar panels provide power for your home. If excess energy is created the battery can store the energy for use at a later time. In this model the individual house is now a generator of electricity with the ability to flex when the power is consumed. This gives a lot more opportunity to manage your energy costs especially combined with some kind of flexible tariff.

If you live in a well insulated house, have a lot of solar panels, a battery and an air source heat pump (as opposed to an oil boiler) you can significantly reduce the overall energy costs. In fact you can reach a situation where the amount of electricity you produce overall easily exceeds the amount that you are consuming. Unfortunately, at the moment you still pay a bill because you need power at times when the sun isn’t shining.

However, if an energy supplier took all the excess power you created throughout the year and sold it at a profit this might be large enough to cover your energy costs as well as providing a profit for the company. An example of this is the new Octopus Zero Bills tariff. This scheme gives you 5 years of zero bills providing you have the right specification of insulation, solar, battery and a heat pump. This of course could just be a short term gimmick but it shows how the energy market is likely to be changing over the next few years.