When you generate your own clean electricity, you pull less electricity from the grid, so you start saving immediately on your bills – but how much?
For a clear picture of the amount of savings you can make, it is important to know how much you are spending on electricity currently.
According the SEAI statistics, the national average electricity consumption is 4,200 units (kilowatt hours or kWh) per year. According to the latest CRU report on retail electricity prices, the average cost of a unit of electricity is €0.191 (inc. VAT).
Using the example of a typical family in Ireland consuming 5,500 kilowatt-hours (kWh), when factors such as standing charges, the PSO levy and VAT are taken into consideration, this results in an annual electricity spend of € 1,245 or an average bill of €207.50 every two months.
Basis for estimating current usage
Formula: 0.168cent/kWh x 5500kWh + € 0.43 (365) + € 41.76 + € 122.1 = € 1,245
How We Did the Calculation
- kWh of electricity consumed in the year
- price paid per kWh
- calculate current spend
- forecast forward 20 years at estimated inflation rate
- total cumulative cost over 20 years
- forecast of electricity generated from solar
- savings from avoided purchase of electricity
Taking the annual bill as stated above at €1,245 and inflating it using an average historical inflation rate for electricity from SEAI statistics (3.5%), and the cumulative cost over 20 years is forecast to be significant! €33,284
Domestic Electricity Cost in Ireland
The domestic electricity market in Ireland contains many players who are consistently competing to acquire you as a customer. This results in price fluctuations throughout the year as energy companies attempt to outdo one another. However, this does not result in a stable market. In fact, despite these fluctuations, the domestic electricity cost in Ireland has generally been trending upwards over the last ten years. It also sits above both the EU and EA weighted average electricity prices.
The chart below illustrates an increase in standard domestic estimated annual bills across all suppliers in Ireland, from December 2016 to December 2019. The steady upward trend has levelled off in the past year, however the fluctuation in the electricity market does not guarantee that this rate will remain at a plateau.
Standard Domestic Estimated Annual Bills per Supplier
Furthermore, this chart on domestic electricity shows that the weighted average price of electricity to domestic customers in Ireland was mainly above the EU weighted average for the period. In the second half of 2019 it was above both the EU weighted average and the Euro Area weighted average. The fluctuating nature of the domestic electricity market in Ireland is a key driving factor in purchasing a Solar PV system. In 2008, the price per kWh was roughly 18 cents. Eleven years later in 2019 this had risen to 24cent/kWh. This gives an average yearly inflation rate of approximately 3.5%. Solar PV allows for the self-generation of a large percentage of your required electricity, rather than relying wholly on the unpredictable prices of the Irish electricity market for your needs.
Solar PV – Lifetime Savings on Your Energy Bills
Based on the size and specific yield* of your Solar PV system you could save nearly €25,000 over 20 years. These calculations take into account the use of a storage battery as well as PV panels to reach a self-consumption level of 85%. This allows you to save money as you are not importing this electricity from the grid. The additional 15% not used can be stored and sold back to the grid. For further information on how these calculations were made, go to SolarSavings Calculation.
*Specific yield refers to how much electricity (kWh) is produced for every kWp of system capacity over the course of a typical year. The value is driven by the location or your roof and the direction it faces.
If you are interested in saving on your electricity, contact us today for your free quote and start your journey to zero carbon living.