Does double glazing pay for itself? Part 1

Over the summer of 2022 one of our doubling glazing units ‘failed’, the dried air has gradually leaked out of the gap between the sealed panes. The symptoms of this are that moisture appears in the gap and the glass looks dirty, but of course cleaning it has no effect. Today this unit was replaced twenty-seven years after it was put in. All this got me thinking – does doubling glazing pay for itself in monetary terms in its life time? My suspicion has always been that it wouldn’t. First a bit of background rules and comment.

Most of the double glazing was replaced twenty-seven years ago, but not all. Four windows were replaced with Low E double glazed units in the intervening period. According to the double glazing company that quoted for the current replacement job you can expect a lifetime of 30 years.

Twenty-seven years is a long time and in that time of course things change.

  • We’ve added a lot more insulation and in 2008 a wood-burner.
  • In 2018 we had a new boiler. This cut our consumption massively. This was not due to a massive gain in efficiency per se – although it is a bit more efficient – but because the old boiler heated the water when the central heating was on whether we wanted it to or not.
  • In 2000 we had an extension built. This was heated for a while by an electric heater on the wall but after a few years we extended the gas central heating system and put a radiator in. The unit that failed was in this room. The particular glass was at the end of the kitchen which the extension was built onto. We moved the double glazed unit which failed into the new room and reused it.
  • I’ve also taken no account of inflation which until this year has been low. In any case in my view it cuts both ways since inflation reduces the size of the original sum invested. We didn’t borrow money to do this, but paid out of our own capital.
  • I assumed a 10% heat loss saving on single glazed units. As far as I can gather the U value of a single pane of glass is 5.6W/m2K. This means every metre of glass transmits 5.6W of heat. This doesn’t sound much, but adds up. A double glazed unit of that era is probably half that*. It might be more in our case. The old windows were very bad fitting with lots of drafts. We only had one winter in the house pre doubling glazing, but I can remember the house being very cold and the curtains in the lounge flapping around when the wind blew.

The cost of the original installation was £950 (1995 price).

I have almost all the Q1 and Q4 bills or price and gas usage data with the exception of 1995. This means the % payback is slightly too low (explained in more detail in the next post).

All the above means the calculation is a bit crude. Part two will cover the results of these.

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Upgrading the house heatwise

In January 2005 I had an infrared survey done of the house by a professional whose day job was decommissioning nuclear power stations.  Last year someone at church did an EPC (Energy Performance Certificate) for us.  We were at the bottom end of a C rating. We achieved a C due to our solar panels, an energy efficient boiler and (mostly) old double glazing (see my post on double glazing paying for itself).  The EPC report made three recommendations.

  • Upgrade the windows.
  • Insulate under the floors.
  • Insulate the walls.

At the beginning of the 2023 we upgraded the windows in the coldest room in the house (ironically the newest – built in 2000).  This dramatically improved the situation.  Also we replaced the 1995 era window in the bathroom which is the highest in the house.  This also helped.  In November we replaced all the windows upstairs other than the new bathroom one and the kitchen ones downstairs.

In addition I’ve started on the walls and floor.  We live in a conservation area so insulating the outside stone walls is a non starter (even if I wanted to), but the kitchen is a narrow galley type that pokes out the back of the house.  One side is a party wall with our neighbours and at the end is the 2000 extension used as an office/spare room.  The whole thing is brick covered in render.  My aim is to remove the render, insulate it and cover it with silicon render.  Part of the wall is inside an unheated conservatory and I was going to start with this since the outside will require at least a building warrant – if not that and planning permission.  In October I went on a a day course to learn how to do this since I can’t get anyone to do what is a small area.  The problem is at the moment there’s a leak into the conservatory and until that’s fixed I can’t start.

In September I made a start on the floors.  We want to have the wooden floor in the hall sanded, so this seemed like a good opportunity to insulate under there – something I’d had a half hearted go at some years ago.  This time I was serious.  I’ve done the lot.  I did it myself partly to save costs and partly since I couldn’t find anyone else to do it.

The EPC gives links to general advice on the suggested measures they suggest.  There are two recommended methods to insulate floors.  The first is a robot that sprays a foam onto the underside of the floor boards.  I have concerns about its breathability, but in any case its expensive and requires good access and a level surface.  Under our floor it looks like the surface of Mars with rubble everywhere and there are pipes and wires to obstruct its progress.  In the end I used the other recommended method which is to suspend insulation between the joists.  There is no issue with damp since it’s on the cold side (imagine if you flipped it 180 degrees and it was above lying between the roof joists). 

Part of the hall floor and downstairs toilet completed.

I also did under the floor of the adjoining toilet since we decided we’d go back to bare boards there too.  In doing so I discovered worm and a leak at junction of the waste from the sink and boiler.  This was sorted out by plumber who at the same time replaced the sink down pipe (lead) and toilet waste pipe (rusting cast iron) with plastic. Both were ‘cold bridges’ so this and the insulation have largely sorted out condensation gathering on the toilet cistern.  I’ve treated the worm.

This made a massive difference to the hall temperature.  10-15% is lost through floors – less than walls, but in the hall there is very little external wall (the toilet is tiny).  After I’d finished the floor I cast around for other places to insulate.  The new window in our lounge helped, but it still didn’t warm up quickly in very cold weather.  The lounge is a particular challenge.  Like the rest of the house (other than the kitchen/extension) its formed of solid stone walls.  It’s above our neighbours lounge and extends out from the house with one totally external wall and two others that are about 60% external.  From the inside the window looks almost like it’s a bay window although its not (see images below).  Below it was a wooden panel which when I tapped it sounded hollow and it’s the thinnest bit of wall (approximately half the thickness of the rest).  I reasoned there was considerable amount of space between the wood and the stone and I could insulate behind it.  The panel was two tongue and groove floorboards and took me a couple of hours to remove.  The image below shows the mess behind it (complete with 1917 newspapers and a number of wine corks). 

Below the lounge window. What I found.

I cleaned it out, re-pointed the worst of the mortar with fresh lime and packed insulation in it, then put the wood back and repainted bits of it. 

After re-pointing with lime. I re-pointed some of the outside with lime last summer so it should breathe very well.

This small area heatwise has made the biggest single difference other than the roof insulation.  I’ve monitored the temperature in the room for years and this and the new double glazing has raised the temperature by 2-3 degrees.

Post insulation. I stuck the front page of the Guardian in.

In the last few weeks I’ve stuck reflective insulation behind all the radiators, sorted out drafts using sticky draft excluders, made the homemade conservatory to kitchen cat flap less leaky and added a bit more insulation onto the roof hatch.  The company that put our new windows in replaced a vent in the kitchen window which had broken and was drafty.  Today we put in insulated blind over our front door.

What have I learnt?

  • I was rather overwhelmed by the infrared survey.  Insulating walls and floors seemed both expensive and difficult.  High energy costs and the need to put in a heat pump at some point in the future have made me revisit it.  DIY is relatively cheap however.  I’m intending to insulate under at least one more room downstairs.
  • Everytime I do something major on the heatwise side of things the comfort level in the house moves up a level.  I’m monitoring the gas bills to see how much difference it makes although this is not easy since the use varies from day to day much less month to month.
  • Small things can make a disproportionate difference. 

My aim is to get the house to a B rating.  An A rating is likely unachievable due to its solid walls.  Since the EPC rating we’ve bought an EV which has doubled our electricity use.  Ironically this will lower our EPC rating?!  But that is for a future post.

Neil

 

 

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The Three Stages of climate denial.

Stage 1 was to deny it’s existence at all. This was prominent from the 60’s to the 00’s. When the sceptics came up against the science and the overwhelming agreement of the scientific community they had to drop it.

Stage 2 was put forward by people like Bjorn Lomberg. This line was to accept the science but to argue the problem was not that big and we could adapt. This sceptic view was increasingly undermined by the weather and the 2015 Paris agreement.

Stage 3 – the current one is an extension of the second stage. It’s not to deny (on the face of it) the science but to argue that mitigation measures are too expensive especially at the moment. In the UK the argument is extended to our emissions versus China. Which is not really the point and whilst I’m not a great fan of the Chinese government (to put it mildly), assumes that they aren’t doing anything themselves. Some then move back to stages 1 and 2.

None of these stages are absolute and the boundaries between them are fluid. Nor to do any of them take any account of what is going on in the developing world where the effects of climate change has been obvious for years. Nor of course resource depletion – the advocates of oil and gas seem to think they go for ever.

This is all come to head in the UK since a series of bye-elections. One seat (Uxbridge) in outer London the Tories managed to hold onto (just) and the extension of the Low Emission Zone* to it was said to helped them keep the seat. Now both main parties are re-considering their green policies although the Tories seem to be doing it more than Labour.

Stage 3 is getting more prevalent for several reasons. Firstly since we’re getting closer to 2050 and it’s more difficult to kick the issue into the long grass and secondly since the easy to do stuff (the electricity system has been done (or is on an unstoppable course to being done since the main renewables used and now storage are so much cheaper than fossil fuels). (I say easy, but even de-carbonising the electricity supply has caused a degree of angst.) Although its easy for the general public, who use electricity as per usual. The next levels of de-carbonisation which involve heating and transport are much more tricky which is why they’re in the sceptics sights. We’ve seen push back from the people in trials of hydrogen boilers (they were right to be sceptical even if their reasons were wrong). Transport and heat come up against people having to make lifestyle changes and pay something themselves. Hence the problem.

The solution on heat pumps is to do what was done with PV. Have a grant scheme to get the industry and installer base up and running. Then go back to the renewable heat incentive which should be tapered from day one over 10 years to reflect falling costs. (No cliff edges unlike the FIT.) On Low Emission Zones and electric cars the current grants which seem generous on the face of it, need to be increased. The transition to net zero needs to be above all fair. Oh and see off stage 3 and there’s likely nothing left for them to fall back on.

* NOTE. This was a Tory act that has been forced on Labour councils in many cases and in London was kicked off by Boris Johnson when he was mayor. So it’s very hypocritical of them. It has to be said Siddiq Khan is going ahead with the extension and it has to be said that once these are introduced the polling evidence suggests they are quite popular as most motorists find they are unaffected.

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Quick update on commercial rooftop PV capacity

I did a blog on potential PV capacity in the UK here.  There is an article from the Solar Power portal here which suggests the capacity is much lower (but still considerable).  I looked at this again a few months ago and I’m sure I wrote a followup but can’t find it.  The original area seemed to be plucked out of thin air with no basis in fact.  The one given above is more realistic. 

Excuse the lack of posts I’ve had problems with WP and updating it without breaking the site.  More will follow.

 

Neil

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Recyling

One of the most frustrating things in life is recycling (what you can and can’t recycle). I’ve just read an article in the Guardian on difficult to recycle stuff. I’m not going to recycle it (sic) here. It’s well worth a read and I don’t think I can improve on it. I’m just going to throw in a few comments about it.

Firstly of course as it says the best way is not to buy stuff like plastic in the first place – reduce or re-use. But this is expensive, time consuming and and in many cases difficult. It’s really up to the government and big business to make these changes not us. (It’s up to us to make sure they do.) A lot of stuff in the article we simply never buy – so there’s no problem.

Second. We have made a lot of progress. Think about the whole single use plastic bag to put your shopping in – you can still buy a plastic bag if you want. But that’s the point – you have to buy it. Or as the article says plastic has been removed from virtually all teabags (by the way I’m quite happy to compost these.) Yoghurt pots can also now be recycled. All this change – like a lot of change, has been incremental so you don’t recognise it when it’s happening and then suddenly it’s normal.

One area that is still confusing though is the recycling number on your plastic in the middle of the recycling symbol. It’s very hard to find out whether your council takes it and they vary. Yes that’s another frustration – you go on holiday and you find that another council doesn’t take what you can do at home. It can be quite basic when I lived in Glasgow recently there was no kerbside collection of glass (or food waste).

Another thing that is mentioned that’ll highlight in the article is cables and chargers. These maybe difficult to recycle but you can take them to a charity shop. We have one near that takes anything including electricals. Recently I took a load of stuff to the council dump. All of it went in for recycling (apparently) including the failed LED light-bulbs. Our council collects batteries and electricals (defined as small) with the kerbside glass. Larger stuff like bikes? Just bought a second-hand one from somewhere that recycles those and also their components.

Neil

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Does doubling glazing pay for itself? Part2.

So has the double glazing paid for itself in its lifetime taken at 30 years?

Sort of – probably. The graphs below show the total payback, bills for Q1/4 and return on the investment in very simple crude terms. By my reckoning its paid for 98% of itself up to Q1 this year. However if you look at the graph there are two outliers (three if you include this year where the bill so far was unusually low, although part of this explained by a big drop in the rate I paid for gas).

The outliers are 1995 and 1997 where the bills are very low and quite out of keeping with the years around them. 1996 was genuinely high, it was one of the coldest winters I can remember (<-20°C). At one point we left the central heating on for 24/7. The bills for 1995 are incomplete i.e. I don’t have one quarter. 1997 are, it must have been very mild. It has to be said that the price of gas was low (somewhere between 1-2p/KWh) so you got quite a lot of gas for your money. If the 1995 cost was at that of some of the years around it then yes our doubling glazing has just about 100% paid for itself. Its a pity the unit failed this spring since the cost of gas has doubled in April, then tripled (October) compared with the spring – so Q4 this year it would start moving into profit with certainty. The payback has been very slow though and not as good as the PV systems (still thinking about the solar hot water). Finally this takes no account of savings from not switching the heating on since we had double glazing. I can’t prove it but this would definitely put us in profit by now if I could have measured these.

All this raises some interesting questions. First of course why do people put in double glazing? Like us – if your glazing needs replacing – it seems crazy not to. Now (but not then) you have no choice unless you live in a listed building. Lots of people put it in to stop noise at that time. Again less relevant now with quieter traffic. So economic payback with this energy saving product is not the primary driver (I would say uniquely and probably fortunately).

The second question is would double glazing pay for itself now?

Taking inflation into account (https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator) the cost was £1950 in today’s money. Looking for indicative costs on line suggest for a similar sized house its £3000-5000. Two things need to be said here. First double glazing technology has moved on. Its now all low E glass A rated. So you’re getting something that potentially will save you more money. Second energy prices are much higher. Peter Smith in the 2002 book “Eco-refurbishment” suggests 15 years as payback. As you can see from my graph the trend in our bills is ever upwards, something that the new boiler has not arrested. The trend is not uniform as gas prices have gone up and down and the winters have varied. I’ll leave you to make up your own mind. Fortunately for us as the glass fails we can simply replace the units without needing to have new frames which mitigates a large part of the cost. This is true for anyone out there who is looking to replace double glazing. You can be far more confident about that paying for itself sooner.

There is a wider point about energy saving measures concerning heat. All but the most basic (lagging, roof insulation, draft exclusion), take many years to pay for themselves and notionally never will or only in decades. This is true even today with the high natural gas bills. Yet all this needs doing to reach net zero and if you have heat pumps installed. I’ll leave you with that happy thought. Happy new year.

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Does double glazing pay for itself?

Over the summer one of our doubling glazing units ‘failed’, the dried air has gradually leaked out of the gap between the sealed panes. The symptoms of this are that moisture appears in the gap and the glass looks dirty, but of course cleaning it has no effect. Today this unit was replaced twenty-seven years after it was put in. All this got me thinking – does doubling glazing pay for itself in monetary terms in its life time? My suspicion has always been that it wouldn’t. First a bit of background rules and comment.

Most of the double glazing was replaced twenty-seven years ago, but not all. Twenty-seven years is a long time and in that time and things change. According to the double glazing company that quoted for the job you can expect a lifetime of 30 years. We’ve had two glass doors replaced with double glazing since. Like the single glazed window they open up onto the conservatory – so not directly onto the outdoors unlike the other double glazing. One of these in particular has made the dining room warmer. However this was done more than 10 years after the initial tranche of doubling glazing.

Two smaller windows were also double glazed at a later date. One of these is in the down stairs toilet and is so small a child couldn’t get through it (thieves note despite this it still has bars on the outside). Another is above the main door and is also small.

We’ve also added a lot more insulation and in 2008 a wood-burner.

In 2018 we had a new boiler. This cut our consumption massively. This was not due to a massive gain in efficiency per se – although it is a bit more efficient – but because the old boiler heated the water when the central heating was on whether we wanted it to or not.

In 2000 we had an extension built. This was heated for a while by an electric heater on the wall but after a few years we extended the gas central heating system and put a radiator in. The unit that failed was in this room. The window was at the end of the kitchen which the extension was built onto. We moved the double glazed unit which h has failed into the new room and reused it.

I’ve taken no account of inflation which until this year has been low. In any case in my view it cuts both ways since inflation reduces the size of the original sum invested. We didn’t borrow money to do this, but paid out of our own capital.

I assumed a 10% heat loss saving on single glazed units. As far as I can gather the U value of a single pane of glass is 5.6W/m2K. This means every metre of glass transmits 5.6W of heat. This doesn’t sound much, but adds up. A double glazed unit of that era is probably half that*. It might be more in our case. The old windows were very bad fitting with lots of drafts. We only had one winter in the house pre doubling glazing, but I can remember the house being very cold and the curtains in the lounge flapping around when the wind blew.

The cost of the installation was £950 (1995 price).

I have almost all the Q1 and Q4 bills or price and gas usage data with the exception of 1995. This means the % payback is slightly too low.

All this means the calculation is a bit crude. Part two will cover the results.

* In the UK the part L of the building regulations cover energy use in England. Scotland or Wales. These are not available on-line so far back but the amendments to the 1991 building regulation act barely mention energy, which shows how much things have changed. Nor does any of the literature we have from the doubling glazing that fitted the windows company mention U values. Some people (https://great-home.co.uk/building-regulations-u-values-how-have-they-changed/) put it at 3.1 for double glazing of that era, but I’m sticking to a 10% saving partly because as I say the drafts were horrendous and partly due to the fact that most double glazing companies put the saving at that.

What a difference double glazing makes. The bottom windows were single glazed the up ones double glazed.
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Energy crisis

This is the follow-up post to my previous one a few weeks ago. The reason for the delay is that I’ve been waiting for the details on the package and that had to wait for the mourning period to finish for the Queen.

So for any of you interested in how it works in the UK this is it. A bit of background first.

In the UK the price of domestic energy is determined by a price cap. The price cap mechanism determines the maximum price that can be set by the energy suppliers. It was an idea cooked up by the labour party in opposition, rubbished by the Tories as socialism, then nicked and adapted. It was introduced after a chorus of complaints that the companies were very quick to raise prices when the wholesale price of gas (and it was gas basically) went up, but slow to lower prices when the gas price fell. Until recently this was set every six months by the regulator (OFGEM). There was still a suspicion until last winter they were soft on the energy companies and it was working against customers, but there’s no doubt since the beginning of the year (if not before) its worked in the customers favour.

Clearly as outlined in the last blog there were a number of options as far as limiting prices were concerned. The one that the government has chosen is to cap the prices that can be charged (sort of). So the cap has been raised by about 25%. However we’re getting a £400 payment this winter which limits the rise with the £50 loan we got (to be paid through future bills) it just about fixes the cap for this winter to the last cap from the spring (£1972). The money to do all this (£89 billion) is being borrowed. Those on low incomes get additional support.

The plus points;

  • Its simple since its not targeted. You just get credit on your bill.
  • It limits prices.
  • There is a price signal since the unit prices have risen by about 25% (gas), slightly less for electricity, which should aid saving and energy efficiency measures.
  • The green levy is being paid by the taxpayer.
  • VAT is still paid on energy at 5%.

The problems;

  • The cap doesn’t account for the price rise in the spring. This was 30%.
  • The cap lasts two years for domestic users but six months for business users (this includes charities and community groups). This has a number of implications. First; what happens to get us off the government subsidising bills? The problem is other countries have found withdrawing subsidy in these situations is not so easy. The second big problem is what happens if the gas price soars? It’ll cost more. So the taxpayer will end up with more debt. Every time the price drops Putin blows something up and even if the war ends its unlikely he’ll turn the taps on.
  • What happens for businesses at the end of the end of the six months? At the moment this is unclear. It should be noted that the energy consumption of businesses is about the same as households.
  • Another problem is what if you choose to, or have to use lots of energy? Remember how this works is the government is paying the difference between the cap and the real price of energy (a considerable sum). My calculations suggest that particularly for gas £400 is not going to go very far – especially if this is a cold winter. This has two paradoxical implications. If you are rich and don’t care then you’ll be bumping up the national debt. If you are poor or have an underlying health condition you’ll also have to use loads, but then find £400 is not that much, with gas at 10.3p/unit and increase the national debt.
  • A whole series of scams are taking place. The credit will be added to your bill automatically you do not need to send your bank details to anyone.

In my view this scheme is only viable for the next two years if things go well (i.e. gas prices drop quite a long way). It would be better to have a more targeted scheme where people who can afford it take the hit and everyone else gets help of some type.

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Energy Crisis

At the moment most if not all Western countries are facing an energy crisis. (The exception seems to be the US which is big enough to have its isolated market and Russia, who is largely but not totally responsible for it in the first place.)

Certainly in Europe governments and companies are scrabbling around desperately trying to find some answers before the heating season hits in a few weeks time. To give three examples. In Germany they’ve made the mistake of being over reliant on Russian gas. In France they’ve capped price increases across the energy board to 4%, but technical problems with large numbers of their reactors plus warm water and low water levels in rivers have meant they’ve had to shut down their nuclear and rely on imported electricity. There is talk of rises in prices and power cuts this winter. In the UK as we’ve almost stopped using coal, closed nuclear, massively increased our wind power and solar capacity we’ve become more dependent on gas. The graph below shows the issue. Most of our (leaky) homes are also heated by it. Prices of electricity and gas are going to increase by another 80% after 50% this spring. Along with huge increases in food prices and general inflation, millions of people won’t be able to afford to heat and eat. Perhaps 44 million people will technically be in fuel poverty in the UK (defined as paying more than 10% of your income on energy). At the moment with a leadership race to become prime minister no decisions are being taken and they need to be – fast. This blog will cover some of the solutions suggested in the UK to the energy crisis – although many of them are relevant and touted in other countries.

1) Tradeable energy quotas – the so called carbon ration. If the last labour government had introduced these we’d be in a very much better place. They thought about it (a bit) and chickened out. However whilst I mention this as a solution as a matter of principle, we literally have weeks to put something in place so sadly this is not going to happen. I’ve written about how this works before.

Pros – pretty fair and simple in principle, ticks lots of boxes and sorts out lots of problems. Cons – difficult to set up.

2) Increase supply of gas from the North Sea and fracking. Whilst not at all compatible with net zero of course, this is being talked about and some action on the North Sea is taking place. About 40% of our gas is produced here (exact percentages quoted varies slightly). Whilst we’re a lot less dependent than Germany on imported gas, the price here is still driven by international market prices. This would apply to fracked prices too. Fracking was very unpopular in the areas where it was trialed and most Tory MP’s don’t want it back. There’s talk of giving people near it reduced gas prices, but the cut-off point geographically would cause issues even if overcame objections.

Pros – not many. Cons – Neither of these solutions will make any difference this winter. Most people think even if fracking could be made to work here there, there would be little if any gas for 10 years. Small increases in supply will trade at whatever the going rate is internationally. Its also like giving an addict more drugs, we need to kick the gas habit, not add to it. So what other solutions are there?

3) A cap on prices. Labour/Liberal democrats/SNP suggest simply not allowing the increase on the 1st of October. This is basically what the French have done. The problem is, even if your energy companies are nationalised (the French government is trying to fully nationalise EDF), it still has to be paid for. Labour suggests a windfall tax on the energy producers who are making huge profits (unlike the supply companies – loads of whom went bust last winter (30!)) and using the cut in inflation that would result as an accounting trick, since it would result in lower government borrowing. This is great politics, but terrible practically. The energy crisis looks set to last years and the sums even for 6 months like eye watering. There are other objections covered below in 4).

Pros – covers everyone at a stroke and easy to administer. Would cut inflation or at least stop it rising. Cons – see 4)

4) A variation on 3) but this time the energy suppliers borrow the money and we pay it back over 10 – 20 years either in higher bills or through general taxation. The government would guarantee the loans. This has been done in a very small way for part of the April increase. To me this idea raises a number of objections. The main drawback is its licence to pollute. We need to cut consumption especially as we might actually be facing power cuts this winter. The higher prices make energy efficiency and micro-renewables very cost effective. It also raises issues of moral hazard. I’ve no objection to borrowing for Covid or wars, but this to me feels different. In 20 years time I may be dead. Plenty of other people certainly will be. Is the debt on a supply basis? Or a personal basis? How much you owe depends on how much you use, or does it? I’ve no objection to covering the usage debts of those whose who have to heat their houses for health or other valid reasons – but what about those who just waste energy?

Pros – as 3) above. Cons – The more I think about this the more complicated it seems. Both and 3 and 4 would allow people to waste energy. Another big drawback of 3/4) is the prices are likely to rise further anyway next year. Then what? Will cost £100 billion at the moment – how much then? Government would be desperate to keep it off the books. Can this be done? Also time would be need to get it set up. I have fundamental concern about the government subsiding peoples energy costs.

5) Social tariffs. Allow those on low incomes to pay less. Those who can afford to pay more. This exists in other countries such as Belgium and is easier to administer than you’d think. This was a suggestion floating around a month or so ago. The advantages are its targeted on those those need it most. The problem is this could be quite a lot of people including much of the middle class. There was talk of two rates – a low income rate and a middle class rate, then a top rate. This starts to get very complicated. Pro’s – potentially targets those who need it most. Cons – means the government has to share some social security information with the energy companies and may not meet all needs. Could mean people on middle incomes, or even above are in trouble still. Allows those on low incomes to waste energy in theory, though most probably won’t because of other cost of living pressures.

6) Another variant on 5) floated by one energy supplier recently. You get (an as yet unspecified number of units) for a low cost (also unspecified) then you pay more (also unspecified). This idea has some merit. It does incentivise consumers to save and invest in modest energy efficiency measures. It would need more though. People at the bottom of the income literally can’t afford to put anything on at all. Quite a good idea in the long term though, as is the social tariff,

Pros – very simple to set up to administer and quick (which we need). Cons – not enough on its own.

7) Increase benefits. This was the original solution touted over the summer. Most of his it proponents now think its not enough. Plus we have a government that doesn’t like them.

Pros – would target those most in need. Cons – but not those who don’t get them. The computer systems believe it or not, would have needed adjusting months ago.

8) Tax cuts. Liz Trusses solution (to everything). Most people who really need help don’t pay tax and for those on middle incomes the cuts would have to be significant. Cutting VAT on energy bills would help a bit. The treasuries said not to be keen since they don’t think it would ever go back on. Cutting green levies would only knock £150 off and would be a disaster if not paid for out of general taxation. These pay for all sorts of things – such as help those on low income pay their bills, energy efficiency measures and the Feed in Tariff. This last one is interesting. Is she really going to upset 3% of UK households plus a whole heap of business’s, farmers etc. with PV/microwind/micro-hydro by cutting this?

Pros – can’t think of any. Cons – to many to mention. Best summed up as it doesn’t add up to much help except for the very rich.

9) Decouple the energy market from gas. At the moment the electricity market is set by the price of gas. Renewables (even offshore wind) have been cheaper than gas for years. With high prices renewable generators on the old renewable obligation certificate (ROC) system are coining it in. If you could diminish the effect of gas on the system you’d lower prices. Its more complicated than that though. First gas still accounts for rather too much of our electricity generation as I I’ve said, so how much effect can you have? Second you’d have to bail out the gas generators since in an open market the suppliers would choose renewables and nuclear. Lastly the contracts are multi-layered and would take time to prise apart. There is also mention of a wind-fall tax on the ROC generators. To be fair as someone who was in receipt of ROC’s they weren’t very generous and some of these systems will have taken a long time to pay for themselves. All the recent stuff has gone in under ‘contract for difference’ so we’re not talking about the majority of capacity here – about 40%. In my view this would not harm the renewable sector in the long term since renewables are the cheapest energy source and is worth considering as a reform.

Pros. Could cut between £150 -£600 off bills. The higher figure does require everyone being forced into contract for difference. Cons -complicated and not a short term fix.

To conclude a very long post (but its a very large problem we face). There is no catch all solution. There are losers all round. One last point all the above is focused on households, not businesses. To bail them out (and charities which have business rates of energy pricing) we are taking a very large amount of money indeed. The figure bandied around is £280 billion for 2 years, but could well be more.

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The Lamp is re-lighting

The lamp is re-lighting. After two years when I was focused on Covid-19 and working half the time away from home in a Covid testing lab I didn’t have the energy to write the blog and the world’s attention was on other things. Now we are beset by multiple crises. Political crises – in many of the world’s democracies. Economic crises. A major European war. Environmental crisis and and an energy crises. The time therefore seems right to re-light the lamp.

The blog will attempt to comment on some of the above, hopefully make some sense of it all and hopefully propose some useful solutions at the micro and macro levels.

Neil

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