In this model, households pay installers to install solar panels in combination with a heat pump to reduce reliance on grid imported electricity and the amount they spend on energy.
Resource
Business model: Maximising self-consumption
In this model, households pay installers to install solar panels in combination with a heat pump to reduce reliance on grid imported electricity and the amount they spend on energy.
Annual energy savings may be as high as £1,030-
£1,732 *. These savings can be maximised by installing battery storage, which allows the home to use stored energy at night or on cloudy days.Installation costs can be significant, depending on the size of the system and any necessary retrofit works. Some of these costs may be offset by the BUS.
Given the long payback period of this model, households should also consider whether they plan to stay in the property long enough to fully benefit from the savings.
* Aira. (2024). The benefits of combining solar panels and heat pumps.
Primary benefits
- Significant annual energy bill savings (compared to households that have installed heat pumps without solar and battery storage).
- Subject to eligibility, a portion of capital costs can be offset by the BUS grant (£7,500).
- Installers usually offer a free, no obligation quote, allowing customers to shop around to get the best deal.
- Revenue generation opportunity from exporting surplus renewable energy.
- Capital costs could be reduced by installing numerous low-carbon assets together rather than adopting a piecemeal approach.
Key risks and considerations
- Significant upfront capital cost for customers especially if fabric retrofit works are required prior to installation.
- Long pay back time, meaning customers should carefully consider whether they will remain at the property long enough to benefit from this proposition.
- Likely to be better suited to owner occupied properties due to length of payback.
- Unlikely to be many prospective customers due to significant upfront capital costs, meaning this proposition may need to be coupled with an attractive finance offering to increase market size.
- The scalability, equitability and affordability of this proposition could be questioned due to the avoidance of paying policy and network costs for renewable generated electricity (i.e., from solar PV).
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