Category: Uncategorized

  • “insulation”

    The insulation component achieves a percentage reduction in space heating energy demand:

    "insulation": {
      "include": true,
      "cost": {
        "gbp": 2500.0,
        "gbp_per_year": 0.0 
      },
      "energy_saving_percent": 20
    }

    The above example is for adding cavity insulation to a typical 5 bedroom house: initial costs only of £2,500 and achieves a 20% reduction to its space heating energy demand.

    Insulation investments should be your first until they result in diminishing returns.

    It pays to stop at some point, and your house doesn’t have to be a passive house for adding more not to make sense. For example, after adding a little extra loft insulation to our wall cavity filled 1960s house, there was relatively little we could do to improve it further beyond paying another £30k to clad it, inside or out: far less financially attractive compared to installing solar PV with a heat pump and battery.

  • “storage_hot_water”

    Describe your renewable hot water cylinder according to the example below:

      "storage_hot_water": {
    "name": "hot water tank",
    "volume_m3": 0.19,
    "immersion_kw": 3.0,
    "target_temperature_c": 55.0,
    "half_life_days": 2.5,
    "one_way_storage_efficiency": 0.95,
    "cost_install_gbp": 0,
    "cost_maintenance_pa_gbp": 0
  },

    Set “volume_m3” to the cylinder’s capacity (1,000 litres = 1 m3) or, if you don’t have one, use a low value (e.g. 0.010).

    The simulator takes energy from the cylinder according to your hot water demand. To estimate energy loss use “half_life_days”: the time for the hot water temperature to fall from “target_temperature” to fall midway to the internal ambient temperature (e.g. 37.5oC if the ambient temperature is 20.0oC). Use “one_way_storage_efficiency” to estimate lost hot water due to long or poorly insulated pipe.

    The simulator maintains the cylinder at “target_temperature_c”. If a heating component does not have sufficient capacity, the next on the list is used to top up any deficit in the following order:

    • solar thermal panels when active (i.e. during daylight), then;
    • heat pump, if installed, then;
    • boiler, if installed, then,
    • immersion heater.

    If the cylinder is part of your project, provision for its cost “cost_install_gbp” and annual maintenance if any in “cost_maintenance_pa_gbp”.

  • “boiler”

    The simulator always assumes that your existing central heating system has a conventional oil or gas boiler.

    To describe your boiler:

    • use the “include” flag to include it, otherwise the simulator assumes your house has no boiler and is heated with electricity;
    • include in “tariff” the name of the energy tariff it is using;
    • give the heating capacity of your boiler in “output_kw”;
    • give the boiler’s efficiency in “efficiency”;
    • in “cost” include only any additional costs that will be incurred when using in “install_gbp”: normally it is zero. Also include its annual maintenance cost in “maintenance_pa_gbp”.

  • Net present value (NPV)

    Renewable systems can have great engineering performance but, unless you check carefully, it’s easy to choose a system:

    • whose costs outweigh its benefits, or is;
    • not optimally sized for your home.

    As a result, each system should be appraised and compared financially.

    There are several ways to do this, such as choosing the one with the shortest payback period, or the one with the highest internal rate of return (IRR) or highest net present value (NPV).

    When comparing renewable systems, NPV is best because payback and IRR do not consider size of investment. For example, adding a tiny PV system with just a few panels to Windsor Castle castle might pay for itself quickly and show a great IRR … but it would make little difference. Payback and IRR won’t tell you how much better you off you would be compared to doing nothing.

    Payback and IRR also ignore opportunites foregone. For example, does a £50,000 ground source heat pump that saves £2,500 a year in electricity costs make sense if we have to fund it by selling stocks that average a 10 percent return? Payback has nothing to say on this, but IRR does. If the project’s IRR, in this example case 5 percent = £2,500 divided by £50,000 (assuming the heat pump lasts forever), is less than the 10 percent expected elsewhere … we shouldn’t go for it.

    NPV estimates each system’s absolute financial value and compares this to doing nothing or investing elsewhere.

    The NPV formula:

    \text{NPV} = \sum_{t=0}^{n} \frac{I_t}{(1 + r)^t}

    estimates how much a project is worth today if you go ahead with it.

    It divides all incomes and costs (negative), associated with the project by a discount factor and adds them all together.

    Consider for example a heat pump + solar PV system. This has a bunch of initial (t=0) planning, purchase and install costs. Then it has a series of costs such as electricity and maintenance charges throughout the project’s life and, hopefully, also positive incomes from solar exports.

    Each income amount is divided by a factor (1+r)t to reflect that monies at an expected time, t, in the future is less interesting than money in the bank today. r is the discount rate and varies widely according to market factors (i.e. interest and inflation) and your own personal attitude to risk and investment.

    NPV is only as good as the assumptions made when using it so that, while its formula is conceptually simple, the process of calculating each term, even with a spreadsheet, can be tedious and slow due to the complexity of most renewable components.

    While the NPV formula is simple large formulae, typicallly using many parameters, are required to acurately describe each renewable component.

    Calculation complexity increases further when components are combined. For example, a heat pump with multiple solar PV arrays and a storage battery.

    Another complication is electricity cost. Gone are the days when electricity had a single price. These days tariffs, especially the ones for homes with renewables, fluctuate throughout the day in ways that defy estimating intuitive averages.

    For these reasons and more besides, rigorous NPV calculation appears seldom used when appraising domestic renewable designs. It has simply been too difficult.

    For me that is a pity, because the investment required from me was large, running into several £10ks, and I wanted to be confident that I was getting the best system our money could buy.

    While you may not want to be ruled by financial measures when saving the planet, the counter argument is that NPV allows you, where desired, to favour investments that maximise CO2 saving per investment. To achieve this just price its cost saving and add it to the NPV formula.