Pay 5.4p/kWh Next 25 Years
Energy price
Do you want to pay 5.4p/kWh over the next 25 years?
How can buying electricity in bulk with solar PV help you save big?
In an era where energy price seems to be on an unstoppable upward trend, homeowners are increasingly searching for ways to protect their wallets from the impact of rising costs. Since 2010, electricity prices in the UK have risen by an average of 6% per year, and with further increases on the horizon, the future looks costly for those relying solely on the grid. But what if there was a way to “bulk buy” your electricity now at a significant discount, securing your energy costs for decades to come? Enter Solar PV—your ticket to long-term savings and energy independence.
The Rising Cost of Electricity: A Troubling Trend
Let’s start with a harsh reality check: the current cost of electricity sits at around £0.24 per kWh. However, if historical trends continue, that figure could rise to a staggering £1.03 per kWh by 2049. That’s more than a fivefold increase! This means that, without intervention, your energy bills could skyrocket, leaving you paying nearly five times more for the same amount of electricity.
Solar PV: Your Path to Fixed, Low-Cost Energy
Now, imagine locking in your electricity costs at just £0.05 per kWh for the next 25 years. That’s the power of Solar PV. Once installed, the cost of the energy your system produces is fixed. It doesn’t matter how much energy prices rise in the future—your solar panels will continue to generate electricity at that same low cost.
This is akin to buying your electricity in bulk at a discount today, and storing it for future use. Just like how shopping at a wholesale club like Costco allows you to stock up on essentials at a lower price, investing in Solar PV enables you to secure your energy at a fraction of the future cost.
Want to know how we get a figure of £0.05 per unit for Solar?
Read right to the end and we explain it there!
The Financial Benefits: Saving 98p Per Unit by 2049
Let’s break down the numbers. If energy prices rise as expected, by 2049, you could be paying £1.03 per kWh if you remain solely dependent on the grid. However, with Solar PV, you’ll still be paying just £0.05 per kWh. That’s a saving of 98p per kWh—a massive reduction when you consider the cumulative effect over years of energy consumption. For example, if your household uses 4,000 kWh of electricity annually, by 2049, this could mean the difference between paying £4,120 a year versus just £200 with Solar PV. The savings add up quickly, making the initial investment in Solar PV one of the smartest financial decisions you can make.
Solar PV: An Investment in Your Future
Solar PV is more than just a tool to reduce your current energy bills; it’s a long-term investment that shields you from the volatility of energy markets. The upfront cost of solar panels might seem daunting, but when you consider the decades of savings they provide, the return on investment is substantial.
Think of it this way: you’re pre-purchasing 25+ years of electricity at a fraction of the future cost. And just like with any good investment, the sooner you act, the greater your potential returns.
Beyond Savings: The Environmental Impact
While the financial benefits are compelling, the environmental impact of Solar PV is equally significant. By generating your own clean, renewable energy, you’re reducing your carbon footprint and contributing to a greener planet. For those who are conscious about their impact on the environment, Solar PV offers a way to align your energy use with your values.
Energy Price: Why Now is the Time to Act
With energy prices on the rise and no signs of slowing down, there’s no better time than now to invest in Solar PV. The latest generation of solar panels is more efficient and reliable than ever, making them a smart choice for any homeowner looking to save money and reduce their environmental impact.
At Boxergy, we specialise in installing the latest solar technologies, and we stand behind the products we install. Our dedicated test facility ensures that every system we offer works as promised, and our comprehensive service packs guarantee that your system will continue to perform for years to come. We don’t just talk the talk; many of our team members have these systems installed in their own homes, so we know firsthand the value they bring.
Secure Your Future with Solar PV
In conclusion, Solar PV isn’t just a way to save on your energy bills today—it’s a way to secure your financial future in an uncertain energy market. By investing in solar now, you can lock in low energy costs, avoid the impact of future price hikes, and contribute to a greener world. Don’t let rising energy prices drain your wallet—buy your electricity in bulk with Solar PV and save big.
Ready to take control of your energy costs? Contact Boxergy today to learn how we can help you make the switch to Solar PV and start saving. With our expertise in solar, heat pumps, and smart tariff integration, we’re here to guide you every step of the way.
Energy Price: Solar PV Cost per Unit Calculation
To calculate the cost per kWh for a 4.3kW solar PV system that costs £4,750 and produces 4,000 kWh in its first year, with a degradation rate that leaves the system producing 80% of its original output after 25 years, we can follow these steps:
Initial Assumptions:
- System Cost: £4,750
- First-Year Production: 4,000 kWh
- Degradation Rate: 0.8% per year, leading to 80% output after 25 years.
Calculating Annual Production:
- Year 1 Production: 4,000 kWh
- Annual Decrease in Production: Each year, the system’s output will decrease by 0.8% of the previous year’s production.
Total Energy Production Over 25 Years:
To find the total energy production over 25 years, we calculate the sum of the annual production as it decreases each year:
- Year 1 Production=4,000 kWh\text{Year 1 Production} = 4,000 \text{ kWh}Year 1 Production=4,000 kWh Year 2 Production=4,000×(1−0.008)=3,968 kWh\text{Year 2 Production} = 4,000 \times (1 – 0.008) = 3,968 \text{ kWh}Year 2 Production=4,000×(1−0.008)=3,968 kWh Year 3 Production=3,968×(1−0.008)≈3,936 kWh\text{Year 3 Production} = 3,968 \times (1 – 0.008) \approx 3,936 \text{ kWh}Year 3 Production=3,968×(1−0.008)≈3,936 kWh
Continue this calculation for 25 years to determine the total production.
However, we can simplify this by using the formula for the sum of a geometric series:
- Total Production=P×(1−rn)1−r\text{Total Production} = \frac{P \times (1 – r^n)}{1 – r}Total Production=1−rP×(1−rn)
where:- PPP is the initial production (4,000 kWh)
- rrr is the rate of degradation (0.992 or 1 – 0.008)
- nnn is the number of years (25)
Plugging in the numbers:
- Total Production=4,000×(1−0.99225)1−0.992≈88,250 kWh\text{Total Production} = \frac{4,000 \times (1 – 0.992^{25})}{1 – 0.992} \approx 88,250 \text{ kWh}Total Production=1−0.9924,000×(1−0.99225)≈88,250 kWh
Calculating the Cost per kWh:
- Total Cost of System: £4,750
- Total Production Over 25 Years: 88,250 kWh
Now, divide the total cost by the total energy production:
- Cost per kWh=£4,75088,250 kWh≈£0.054 or 5.4p/kWh\text{Cost per kWh} = \frac{£4,750}{88,250 \text{ kWh}} \approx £0.054 \text{ or 5.4p/kWh}Cost per kWh=88,250 kWh£4,750≈£0.054 or 5.4p/kWh
After factoring in the panel degradation, the cost per kWh of electricity generated by the system over 25 years is approximately 5.4p/kWh. This figure illustrates the long-term value of solar PV, as it remains significantly lower than current and projected future grid electricity prices.
This 5.4p/kWh cost accounts for the reduced efficiency of solar panels over time, ensuring that even as the system ages, you’re still getting a fantastic deal on your energy costs.
Author: Jim Laidlaw, CEO & Founder at Boxergy
Visit Jim’s LinkedIn profile.
4 Comments. Leave new
These figures are inconsistent. At the start you say 0.8% degradation over 25 years will result in an end efficiency of 80% compared with the start. That would be true if it were a linear degradation rate of 0.8% of the initial 4kWh every year (ie 32Wh less each year), but in your calculations you use geometric progression (ie losing 0.8% of the previous year each year) – but still get the wrong answer! You also appear to apply the reduction to the first year, rather than leaving that at 4,000.
A geometric reduction of 0.8% year on year would bring the efficiency down to 82.5% in year 25 (actually better than your result). You can see this clearly from a simple table, with the end result of 4.9p/kWh:
Year Energy Production as
generated %ge of 4kWhr
1 4000.0 100.0%
2 3968.0 99.2%
3 3936.3 98.4%
4 3904.8 97.6%
5 3873.5 96.8%
6 3842.5 96.1%
7 3811.8 95.3%
8 3781.3 94.5%
9 3751.1 93.8%
10 3721.0 93.0%
11 3691.3 92.3%
12 3661.7 91.5%
13 3632.5 90.8%
14 3603.4 90.1%
15 3574.6 89.4%
16 3546.0 88.6%
17 3517.6 87.9%
18 3489.5 87.2%
19 3461.5 86.5%
20 3433.9 85.8%
21 3406.4 85.2%
22 3379.1 84.5%
23 3352.1 83.8%
24 3325.3 83.1%
25 3298.7 82.5%
——————————
Total 90964 kWh
Cost/unit £0.049
So you have undersold yourselves.
If it is 0.8% reduction year-on-year, the equivalent rate is 4.9p/kWh. On the other hand, if it is 0.8% of the original 4kWh each year (ie 32Wh less each year) then the equivalent rate would be 5p/kWh.
Dear Alex, Thank you for taking the time to provide such a thorough analysis! You’re absolutely right—using a geometric degradation model results in a slightly higher end efficiency than our simplified figure. We intentionally used a more conservative approach to keep our estimates on the safe side, but your calculations highlight that the savings could potentially be even better than what we outlined.
Your breakdown of the numbers is spot-on, and it’s great to see that even with these adjustments, the overall value of Solar PV remains very compelling. We’re grateful for your contribution, and your detailed response will help us communicate these benefits even more effectively. Regards, Jim Laidlaw, CEO & Founder at Boxergy
Oops, a slip of my own now. I had misread the initial coast at £4,500 not £4,750, so the effective unit costs are 5.2p and 5.3p respectively. Still lower than your claim, whichever degradation calculation is correct!
Dear Alex, Thank you for the follow-up and for the clarification on the initial cost! Your recalculated figures show that, even with minor variations in degradation methods or cost assumptions, Solar PV still offers excellent value over the long term. We’ve opted for a slightly more conservative estimate to set realistic expectations, but your numbers reinforce that the potential savings could be even higher!
We appreciate your engagement and thoughtful input—it’s always rewarding to have informed readers add to the discussion! Regards, Jim Laidlaw, CEO & Founder at Boxergy