Non, Je ne regrette rien: update

Friends, last week I wrote about my embarrassingly low energy bills, and compared them with the shockingly high energy bills I would be facing if I had spent my pension lump sum on a world cruise and a car: Non, je ne regrette rien.

But after writing that article, I quickly realised that it needed updating.

  • Firstly,  although I have agreed an electricity contract for the year to September 2023, I underestimated how much I would have had to pay for gas. These new ‘energy cap’ prices were estimated early this week and confirmed today.

Energy Cap Prices (Source: Cornwall Insight)

  • Secondly, several people were puzzled about how I did the calculations for both my actual gas and electricity use, and the counterfactual estimate.

In this article I hope to clarify both of these issues.

Modelling Consumption Patterns

Since November 2018 I have read my gas and electricity meters each Saturday morning and so I know my weekly gas and electricity consumption for the last 4 years or so.

This allowed me to get a characteristic consumption pattern from June 2019 to May 2020 before the External Wall Insulation, Solar Panels, Battery and Air Source Heat Pump were installed.

To model the alternative counterfactual reality I have imagined that the 2019/20 pattern of consumption simply repeated indefinitely. I could then compare that with what has actually happened.

Modelling Costs

I have then assumed different costs for different periods as summarised in the table below.

Click for larger version. These are the prices per unit and daily charges that I have assumed. See text for details.

Working out these costs has been tricky.

Historically, I don’t recall the price of either electricity or gas changing much for the many years we have been in the house. It was not until EDF increased the price of cheap electricity by 73% that I thought to look elsewhere, and I switched to Octopus energy a year ago in August 2021.

I signed a fixed-price 1 year deal for electricity that gave me 4 hours of electricity at 5p/kWh and a peak rate of 16p/kWh.

I recently renewed that deal at increased rates of 7.5p/kWh off-peak and 46p/kWh peak.

The gas charge changes with the market and has increased from around 3p/kWh to around 7.3p/kWh but I expect that to increase

Looking ahead I have assumed that in a year’s time I will renew the electricity contract with a similar deal that will be more expensive.

Regarding future gas prices, I have assumed ‘Energy Price Cap Prices‘ for October 2022 that have recently been published. I have made conservative guesses for how these prices will vary in future – but I expect them to increase throughout the whole of 2023.

I have not included any government interventions.

Actual Costs 

The graphs below show my actual electricity and gas costs over the last three and half years, and my projected costs for the next year and a half.

Click on image for a larger version. My weekly gas and electricity costs for the last three and a half years. Also shown in red is my projection for my bills based on currently signed contracts. The figures in boxes show yearly costs. Note the vertical scale is £120/week – much larger than the scale I used in my previous article.


Prior to 2021 electricity usage was pretty constant at around 10 kWh/day costing around £15/week.

But after the installation of solar panels and a battery, the pattern of consumption of grid electricity changed significantly, with the house being almost off-grid for three to four months a year, and with electricity consumption usage peaking in winter.

The winter costs of this are low – peaking at £15/week – because we buy most of our electricity ‘off-peak’ and store it in the battery and then run the household from the battery for most of the next day.

Looking ahead, (red) if I assume that the coming winter is similar to last winter, then these projected costs will increase in the year ahead.

Regarding gas usage, one can see the winter consumption declining year-on-year as a result of first triple-glazing and then External Wall Insulation.

And then in 2021 gas usage flatlines after the installation of the Air Source Heat Pump. The residual gas usage is just for cooking – roughly 1 kWh/day – which I hope to stop in the next few months by switching to an induction hob – that’s why the projected gas costs for 2023 are zero.

If I had done nothing 

The graphs below show my estimates for gas and electricity costs assuming I had not installed External Wall Insulation, Solar PV, a battery and an Air Source Heat Pump.

Click on image for a larger version. Estimated weekly gas and electricity costs for the last three and a half years assuming that I had not installed External Wall Insulation, Solar PV, a battery and an Air Source Heat Pump. Also shown in red is my projection for the coming year. The figures in boxes show yearly costs. Notice that the vertical scale of this graph is £120/week – much larger than the scale I used in my previous article.

The same patterns of electricity and gas usage are repeated year after year.

The effect of forthcoming price rises for 2023 are estimates based on Octopus Energy prices.

I have assumed that the electricity price is fixed and so not affected by energy price cap rises. I have not assumed any increase in September 2023 after the fixed deal comes to an end, but there will probably be a rise of some kind.

However gas costs are extremely high and subject to whatever the market demands.

The small reduction in 2023 electricity costs (£1,447) versus 2022 (£1,475)  is because the calculation is based on weekly consumption and one year has a nominal 53 weeks versus a nominal 52 in the other year.


Finally, the graph below compares the actual bills I have paid with my estimate for what I would have paid if I had not improved the house. The graph combines gas and electricity costs.

Click on image for a larger version. Comparison of the actual annual combined gas and electricity bills with the counterfactual scenario in which I had not installed External Wall Insulation, Solar PV, a battery and an Air Source Heat Pump. Figures for 2023 are – obviously – projections. Notice that the project costs that I would have incurred are much larger than I estimated in my previous article.

I have stared at this graph over and over and thought: Michael: you have made a mistake. And that may be true. But if I have, I can’t find it.

The models have many assumptions and some may be not quite right. But I don’t think the figures are wrong by more than about 10%.

Payback Calculation

The difference between the two realities in the graph above is – in round terms – currently around £2,000/year and will likely grow to around £4,000 year in 2023 – much larger than I calculated in my previous article.

The difference in expenditure between the two realities is External Wall Insulation (£27k), Solar PV(£4k), a battery (£10k) and an Air Source Heat Pump (£8k) which comes to around £50k.

So the return on my investment is currently 4% and might rise to 8% – which is much better (for me) than I had thought.

Something must be done

The impact of forthcoming price rises is hard to comprehend. The consequences for people with low incomes are dire – and the consequences for hospitals, schools, libraries and business are also frightening.

Clearly ‘something must be done, but I have no confidence that any measures will be well-targeted. Obviously giving people like me more money is bonkers!

But whatever financial steps are taken, I hope the that one lesson will be learned: we need a renewable energy initiative on a wartime scale to build more wind and solar farms as rapidly as possible. If done at scale this could transform our energy infrastructure within a decade.

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