When Guy Hargreaves purchased his mid-terrace house at the northern tip of Oxford in 2019, he wanted to completely revamp it. The retired banker and engineer from New Zealand had planned to extend the home and renovate it, but it also changed energy efficiency.
Six years later, according to Hargreaves, the formerly devastated property not only became a “joy to live in”, but also became a net exporter of electricity from rooftop solar panels for about six months a year.
The project is an impressive example of the potential for investment in real estate that cuts energy bills. According to the National Bureau of Statistics, such bills are increasingly concerning after a 61% increase in the five years leading up to the first quarter of this year, following a surge in prices that have boosted domestic energy costs. Ofgem, the UK energy price regulator, has set a price cap of limiting the cost of electricity and gas to an average household, limiting it to £1,720 a year.
Energy saving experts say there are a huge number of adjustments that can affect home energy bills, from completely costless to rebuilding wholesale like the Hargreaves project. But Katy King, assistant director of Sustainable Futures Mission at Nesta, an innovation think tank, says he is generally confused as to which measures are the most cost-effective.
“Many people don’t know which energy-saving actions save the most money,” she says.
In the case of Hargreaves, he spent a total of 50-75% of the property’s purchase price in all aspects of renovations, including converting the extension and basement into separate Lettable flats. Much of the spending was on factors that were not related to home energy use or that influenced both energy consumption and other aspects.
Nevertheless, Hargreaves says modelling by the installer suggests that his final spending on the property (£12,500 spent on rooftop solar panels and installed batteries) can pay himself within seven years. He estimates that solar panels should provide about 95% of the electricity used in the main house all year round, except for flats. The House of Representatives’ energy use is primarily due to renovations quarantining the buildings to demanding enfit standards. That means, among other things, there is very little air leakage.
“For example, you can now charge your batteries off-peak (rate) and then charge your grid at peak times at higher export rates,” says Hargreaves. “It’s generating income.”
Potential energy saving measures for your home fit into three broad categories: those that prevent energy from leaking, those that increase the efficiency of your home appliances, and those that generate electricity.
Alan Budden, director of Eco Design Consultants, who oversaw the transformation of Hargreaves’ wealth, highlights even small changes to cut bills. He suggests that the head of the household enter the loft and check if the roof insulation is not disturbed or moved in a way that is not effective.
He also suggests placing a simple insulation around the hot water pipe to stop the draft.
“Draftproofing is one of the biggest heat loss areas you can do,” says Budden.
King says that a typical household head can save around 65 pounds a year by dismissing a thermostat that controls the internal heat of a house boiler to a more efficient working temperature of 60c.
“We often encourage people to do cheap and free things,” King says. “Some of them are low in cost and have great value for money.”
Like Budden, King is keen on loft insulation. She says it costs around 1,000 pounds to fit a 300mm thick loft insulation in a typical home that currently doesn’t have anything. This measure saves up to £470 a year on a typical bill.
“If you’re nothing, if you go for a fair amount, there’s very little to pay back in two years,” King says of loft insulation. “So it’s really worth considering.”
However, the problem quickly becomes complicated and goes beyond the most basic and effective measures.
For example, King points out that is far more expensive to isolate the exterior walls of a building than to do the same in a loft. In a typical detached house, solid wall insulation costs £11,000. However, this work usually generates savings on annual energy bills of up to £550.
She acknowledges that people have different views on whether that 20-year payback period is worth it.
If cheap, low-performance products make energy savings a little less, there are equally complicated questions about whether it is worth paying the highest standard of insulation, draft prevention and glazing extra costs.
“Everyone has an appetite for what kind of payback period they are interested in,” King says.
Anastasiya Ostrovnaya, a senior researcher at the Imperial College Business School in London, says that in the UK, the calculations are ridiculous when it comes to installing heat pumps instead of traditional gas central heating boilers.
While grants can reduce costs for many homeowners, heat pumps with electric, air sources cost around £10,000 for a typical home. This is much higher than the typical £4,000 cost of installing a new gas central heating boiler. However, heat pumps usually use about a third of the energy that is as high as a gas boiler, but the higher power costs means they can be higher than running than gas boilers.
“The most ridiculous fact is that it costs money to operate because the UK has the highest electricity prices,” says Ostrovnaya.
There are several power providers, including octopus, offering cheap off-peak rates for customers with heat pumps. This changes the cost calculation. Heat pump users are incentivized under such customs duties to turn off the device during peak times.
Rooftop Solar Panel Cost Guy Hargreaves £12,500©Tom Pilston/ft
King says the high cost of running a heat pump with electricity from the grid will make Hargleve a particularly attractive combination of solar panels, batteries and heat pumps.
“When you collect the energy from a solar panel and use it for heating, it becomes much better,” King says. “The combination of solar panels and batteries is a really great idea.”
However, Hargreaves’ project emphasizes how adjustments to the home are rarely a financial problem.
He says that the transformation of his fortune was a “passion project.”
“The truth is that it’s a challenge and it really matches the values of both me and my wife,” says Hargreaves.
Budden says that the feelings of the house and people about them are far beyond questions about their running costs. He says that the mental and physical health of homeowners can help them live in a comfortable home with few drafts, knowing they are causing minimal damage to the environment.
“It’s hard to number it when it comes to what you pay for it,” he says.
He recommends homeowners develop long-term energy saving plans and renovate aspects of their property as needed.
“You exercise, ‘This is what I can ultimately do at my home – probably reduce that usage by 80%,” he says. “We do it within our maintenance schedule, so that’s the cheapest way to do it.”
For Hargreaves, the joy of living in his home is that the insulated property feels very comfortable and there is no draft that plagues most old English property.
“I never feel like I’m in a game of fever chasing around the house,” he says.
He also expresses his deep satisfaction that the energy use of real estate puts little strain on the environment.
“I don’t regret it for a moment,” he says.
