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Prices vary hugely between renewable energy installers

Posted by Cathy Debenham on 27 November 2009 at 11:17 am

Prices for renewable energy installations vary wildly, making buying decisions difficult for homeowners, according to Power from the People, a new study by researchers at Oxford University’s Environmental Change Institute. In addition, there is little correlation between price and the generation capacity of the installation in many technologies.

Researchers Noah Bergman and Christian Jardine analysed the data from the first two years of the Low Carbon Buildings Programme grants scheme for homeowners. The most extreme example of price difference they found is in wood-fuelled boilers where the prices for 14.5-15kW boiler ranged from £3,175 to £16,479 – a more than fivefold difference.

This reflects my experience when we renovated our house in 2005. We were so confused by the conflicting information that we bought an efficient gas boiler instead. It’s depressing to find that it’s still a problem and that the market hasn’t developed. But it does confirm the need for the recommendation service that YouGen offers (if you have installed renewable energy, please help others to choose by rating your installer).

The difference in biomass boiler prices can partly be explained by technical differences of the models and differences in the installation costs. There was no correlation between total cost and the expected thermal output of the boiler.

Solar hot water systems (solar thermal) are also subject to a huge range of prices with most in the study varying between £1,000 and £8,000. The range can partly be explained by the relatively low equipment cost, site differences and scaffolding needs leading to significantly different labour costs. But Jardine and Bergman also found that profit margins are highly variable. They concluded that solar thermal “has poorly reported energy capacity and savings, suggesting many consumers are not getting a good deal and providing some evidence of the notion of ‘cowboy installers’ in the market”.

The cost of ground source heat pump installations varied by a factor of four, although here they did find some correlation between the total cost and the thermal output. The disruption involved in laying the pipe work is likely to contribute to these differences.

Cost and installation size appear much more closely related for the electricity generating technologies of wind and solar. The cost of components is a much greater percentage of the total in solar PV installations. With only a few wholesalers in the UK, there’s little variation between costs of the equipment, and a relatively smaller variability in installation costs and profit margins.

By showing price trends and setting benchmarks Bergman and Jardine hope to make it easier for buyers to know what sort of price to expect. Bergman also suggests getting a few estimates; asking for recommendations; and asking the installer to break down the price, so you can identify and compare the different costs involved.

The average prices they identified are as follows:

Solar PV
Fixed costs £2,000
Equipment £5,000 per kWp installed
Example:  1kWp installation should therefore cost around £7,000, and a 2kWp installation around £12,000 (although there are signs of a 10% price drop over the two years analysed.

Solar thermal
Fixed costs: average of nearly £3,000, but varied considerably
Equipment: £500 per 1,000kWh/year
Example: a 2,000kWh/year system should cost an average of £4,000.

Ground source heat
Fixed costs: average £4,400, but variable
Equipment: £460 per kW thermal output.
Example: a 10kW GSHP should cost an average of £9,000.

Wood-fuelled boiler system
Average cost: £8,900, with high variability and no correlation to thermal output of the system.

Wind turbines
The mast-based 5kWp Iskra AT5-1 cost an average £18,425 (£3,650 per kWp).
The mast-based 6kWp Proven Engineering WT6000 cost an average £19,170 (3,200 per kWp).

Photo by Sean Pants

More information about Energy Saving and Renewable Energy on YouGen.

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Comments

7 comments - read them below or add one

Peter Wilcock

Peter WilcockComment left on: 26 May 2010 at 8:35 pm

Thanks Barry, I will follow this up.  He does have MCS registration.

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Barry Nutley

Barry Nutley from Viridis Energie ConsultantsComment left on: 26 May 2010 at 10:28 am

In reply to Peter's solar themal question.. Not sure why you're installer would suggest an E/W configuration if a suitable S facing roof is available (other than ease of installation for himself, and a more expensive system, as I'm guessing he would have suggested a larger system??). My suggestion is to ask him to give you a quote, with predicted output, for the south facing roof. You can then work out what the most cost effective system is? As for the boiler management system?? What benefit is it going to give you??

As an aside, I'm sure you've checked, but does you're installer have MCS accreditation??  As you know, without this you will not be eligible for the RHI payments in 2011.

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Peter Wilcock

Peter WilcockComment left on: 25 May 2010 at 9:29 pm

I am intending to install a solar thermal energy system on my roof. I have a south facing roof and also East-West facing extension. An installer has suggested using the East-West facing extension with split panels since it offers shorter pipe runs to the hot water cylinder. The predicted output is 1237kWh per year ( for £4886 which feels expensive). Writers talk about 2Kw systems being typical. Does our predicted output match this aim please? I do not understand the units of measurement. Your website does not mention using E/W split panels systems. Is it possible to use E/W roofs successfully? Finally they talk about installing a boiler management system (included in the estimate) which costs about £750, is this worth it?

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Cathy Debenham

Cathy DebenhamComment left on: 22 February 2010 at 5:22 pm

First, may I apologise for not putting notes in the above article to explain what all the various measures mean. One of our aims at YouGen is to keep this site clear and easy to understand, and avoid jargon, and we've failed to do that here. If you spot any other areas, do let us know and we'll add them to the jargon buster.

kWh – kilowatt hour – is a unit used to measure energy. Electricity bills are charged in kilowatt hours, and on my gas bill the units are converted to kWh too. It is also the unit used to measure the energy generated by wind turbines or photovoltaic solar panels

kWh/year does, as you guess, mean kilowatt hour per year. This can be used in terms of heat output, or the amount of energy needed to heat a house. For example, my solar thermal system was predicted to generate 2517kWh of heat per year. The Department of Energy and Climate Change (DECC) calculates that the average household requires 3,742 kWh/year of energy to heat its hot water.

The figure above of £500 per kWh/year came from the Power from the People press release, and now you ask about it, I realise that I'm not clear what it means (sorry about that), but I will email the authors to find out. 

kWp – kilowatt peak is the measure of how much power a photovoltaic system produces from the sun under test conditions. It measures the power produced under 1kW per m2 of light. The more efficient the system, the smaller the area of panels needed.

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gnnmartin

gnnmartinComment left on: 21 February 2010 at 1:38 am

I notice you use the term kWh/year in this blog, and on page http://www.yougen.co.uk/renewable-energy/Heat+Pumps/, and that the Guardian uses the same unit, presumably copying from you.  What does this mean?  It appears to mean kilowatt hour per year, but that is obviously wrong.  Do you simply mean kW (ie kilowatts), and is that killowatts of energy consumption, or killowatts of heat output?  I assume the latter, but would like to be sure.  Finally, I notice you also talk about kWp in two or three places above.  What does this mean?  Kilowatts peak?

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Cathy Debenham

Cathy DebenhamComment left on: 15 December 2009 at 10:49 am

I completely agree with you - and I didn't mean to imply that expensive necessarily means it's a rip off. Quality is, of course, very important. Where I think this study is useful is that it creates a price benchmark. That gives people a starting point from which to ask questions - including the expected output, and longevity of the product.

What was also interesting about the study is the lack of correlation between cost and thermal output. I would expect a top quality boiler to have a better heat output than a rubbish one, so this is surprising, and indicates that some may be overpriced.

The other thing I found useful is that it separates out the cost of the kit from the cost of installing it. This is helpful, as every installation is going to be different, and if you've got what seems a very simple installation, yet the installation costs appear much bigger than average, you can ask why.

But, still it's only a start. In many ways it just confirms what a complex, difficult market it is. I hope that by going back to people who've made a recommendation on this site after a year or so, and asking them again, whether their expectations have been met and whether they are happy with the product, we can begin to build up more of a picture of which products people are happy with, and which they aren't.

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Glenfender

GlenfenderComment left on: 10 December 2009 at 11:28 pm

I think that while this study has its uses - in giving people an idea of the range of costs of renewable installations - it ignores one important factor - quality.  I know that for example the quality of solar thermal kit varies enormously..  I once was at a training course for an Austrian manufacturer's kit - It seemed very good to me but not beiing very experienced I asked some other attendees - who had been in the solar business for some time (genuine guys who thought they had been doing the right thing) - they said, when asked what they thought of the Austrian stuff, 'we realise that we have been fitting rubbish!'.  So the real issue is how do people know the quality of what they are being offered?  Similarly with biomass boilers. I have a Palazzetti stove which heats the whole house. it cost around £7,000 for the whole installation - however I know it is not a patch on an Okofen boiler system - which is likely at the moment to cost another £10,000.  As someone said a while ago - there are folk knocking up biomass boilers in every next garage in Italy - but would you really want to rely on this for your heating - when it is minus 5 outside?  Like cars - you can get a cheap car for £6,000 - or you can pay for a volvo (not sure how much they cost - can't afford them) but you know what I mean.  Quality costs - so it is perhaps unhelpful to imply that anyone quoting a higher price is necessarily ripping the customer off.  I think a useful study into the range of quality of system out there would assist people enormously.

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