Prices vary hugely between renewable energy installers
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.
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 kWh/year
Example: a 2kWh/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).
Barry Nutley, partner at Viridis Energie Consultants, independent renewable energy consultants, commented “whilst marginal variances in costs are to be expected, this level of difference doesn’t help the industry. My advice to anyone looking to install renewable energy technologies, would be to seek independent advice”.