Tariff Calculations: Octopus GO versus Octopus FLUX

Friends, I have struggled to write this article. As you may have noticed, it has taken weeks.

I started writing after I was asked on Twitter about a new electricity tariff called ‘FLUX’ offered by Octopus Energy. Would it be cheaper or more expensive than their ‘GO’ tariff?

It’s a simple question and one that is worth asking. But it is very hard to answer because it involves both hourly details, but also seasonal changes.

I could see how to get at an answer but I have struggled with my waning technical skills. Imagine if you will, an old boxer going in for one fight too many. Finding themselves on the ropes, they face the unavoidable and inevitable reality of their own decline. But bravely they struggle and finish the fight bruised and defeated, but with their dignity in tact. Similarly I have found my prowess with Excel and Visual Basic to be much diminished, but I have somehow battled through.

GO and FLUX

The Octopus GO tariff which I currently use offers 4 hours of electricity for 7.5p/kWh between 00:30 and 04:30 each day. The rest of the time the cost is 40.75p/kWh. Exports of electricity are paid for at 4.1 p/kWh.

During winter, I buy electricity cheaply at night, and then use it during the day. For most of December and January, the battery could not supply the house for the whole day and I had to purchase electricity at full price for a few hours on those days. Overall, the average price I paid was around 12p/kWh in those two months.

Click on Image for a larger version. Illustration of the variation in price through the day for electricity imports (left) and exports (right) on the Octopus Go and Octopus FLUX tariffs.

The Octopus FLUX tariff is more complicated. It has a cheap rate in the night, but only for 3 hours 02:00 to 05:00 and not so very cheap (20.4 p/kWh). But it also has a more expensive rate (47.5 p/kWh) during peak demand hours from 16:00 to 19:00 each day. The rest of the time the cost is 34 p/kWh.

Initially FLUX looks much worse than GO, but the twist is that FLUX offers much higher rates for exporting electricity: 9.4 p/kWh, 22 p/kWh, 36.5 p/kWh for the cheap medium and high rates respectively. These figures should be compared with the miserly 4.1 p/kWh on the GO tariff.

There are so many variable quantities that I really had no idea which tariff would be cheaper. The results of my calculations appear obvious in retrospect, but that didn’t make the calculations any easier! My conclusions are that:

• For small solar PV installations (<~4,000 kWh/year), the big savings from using the night time electricity on GO outweigh the gains from exporting electricity at a good price.
• For large solar PV installations (>~6,000 kWh/year), this situation is reversed: The savings from using the night time electricity on GO are outweighed by the gains from exporting electricity on the FLUX tariff.
• For medium-sized solar PV installations, the two tariffs have similar costs.

Click on Image for a larger version. Estimates of the annual cost of electricity on the Octopus Go and Octopus FLUX tariffs as a function of the amount of solar generation. This applies to my household – see text for details – and assumes a 13.5 kWh storage battery. 

It turns out that, if you have the capability to export lots of solar PV, then the FLUX tariff could result in very low – and even negative – electricity bills. In retrospect, this is sort of obvious, but it was not obvious at all to me when I began.

But the spreadsheet I developed for the calculation allowed me to do the calculations for different sizes of battery and different amounts of solar PV generation, so I’ve investigated the matter a little more deeply below.

Sadly, because the spreadsheet is Macro-enabled, for security reasons I can’t link to it from this blog and many users wouldn’t be able to download it anyway. But if you really want a copy, please ask for a copy in the comments and I will send it to you somehow. But be warned that the spreadsheet is complicated and slooooow. On my computer it takes around 1 minute to evaluate the yearly calculation.

[Update: I think you can download the spreadsheet from this Dropbox Link]

Let me explain how I made the calculation and then I’ll discuss a few more details.

How to work out which tariff is cheaper

To answer this question I wrote a spreadsheet which modelled the electricity use in a household hour-by-hour for an entire year i.e. the spreadsheet has 365 x 24 = 8,760 rows.

For each hour of the year I estimated:

• The household demand: I modelled this as being the sum of a fixed amount each day (10 kWh/day) plus an amount used for heating that peaked in winter at 25 kWh/day.
• Solar PV: Using the EU sunshine database, I downloaded hour-by-hour sunshine data for my house location from 2005 to 2016, and then averaged this to give a typical solar generation year.
• I then worked out how to supply the household demand.
  • If Solar Power exceeded demand, then the excess was used to charge the battery, and if the battery was full, the excess was exported.
  • If Solar Power was less than demand, then the solar power offset the imported electricity.
  • During winter, the battery was fully charged during the cheap hours.
  • I estimated the battery to have a round-trip storage efficiency of 90%.

The spreadsheet and associated VB Macros took days to debug, but here are the results.

Household Demand

The modelled daily demand is shown below along with the EU sunshine database estimate of PV generation amounting to ~ 4,000 kWh/year. Basic electricity demand is ~ 10 kWh/day but peaks at 25 kWh/day in mid-winter due the heat pump, and amounts to ~ 5,000 kWh/year.

Click on Image for a larger version. Graph showing the modelled daily household demand throughout the year, and the 3-day average of solar generation. The solar data is the average of the years 2005 to 2012 estimated for my location and array size in Teddington.

The relationship between Solar PV supply and household demand is such that one needs to use two different strategies depending on the time of the year.

• In the Winter: the battery is charged using cheap rate electricity and discharges during the day – sometimes running out at night.
• In the Summer: there is no night time charging and the battery charges during the day and discharges during the night.

These two modes are illustrated in the graphs below.

The first graph shows a week in winter under the two different tariffs. The four hours of cheap electricity under the GO tariff allows the battery to charge to full, but the FLUX tariff only has three hours of cheap electricity so the battery only charges to around 10 kWh. The battery then discharges to run the household, and is partially supported by the weak solar generation, but typically runs out well before the end of the day.

Click on Image for a larger version. The state of charge of the battery through 7 days in winter. The upper graph shows the Octopus GO tariff which allows the battery to be fully re-charged each night. The lower graph shows the Octopus FLUX tariff which only has enough cheap hours to enable partial filling of the battery. The solar generation is also shown in yellow.

The second graph shows a week in summer. At this time of year, solar generation is enough to run the household and charge the battery during the day, with enough left over for export.

Click on Image for a larger version. The state of charge of the battery through 7 days in summer. Also shown is the solar generation is also in yellow and electricity exports in grey.

The switch between the summer and winter strategies is made on day 90 and day 270 – an arbitrary choice but one which corresponds roughly to the point where the 3-day average of solar exceeds the average household demand. The graph below shows the state of charge of the battery throughout the entire year on both tariffs.

Click on Image for a larger version. The state of charge of the battery through the entire year. The top graph shows the estimate for the GO tariff and the lower graph shows the estimate for the FLUX tariff.

Costs

The simulation runs hour-by-hour through the entire simulated year. For each hour, I estimated how much electricity was imported and exported, and then applied the appropriate tariff rate. This allowed me to summarise the situation for my home as below.

Click on Image for a larger version. Results of calculations of cost of running my household on (top) the GO tariff and (bottom) the FLUX tariff.

Both tariffs offer the possibility of running a home very cheaply: with annualised energy bills in the range £30/month to £50/month. However the GO tariff appears to be cheaper in this simulation £34/month compared with £50/month for FLUX.

The analysis shows why: being able to fill up with electricity at 7.5 p/kWh reduces the cost the electricity dramatically – £298/year versus £648/year. The improved rates for export on the FLUX tariff (£209/year versus £38/year) aren’t enough to make up for that.

Discussion#1: The effect of extra solar generation 

My conclusion is that for me, with my existing 3,800 kWh/year PV installation, the GO tariff is more economical.

But having recently had extra panels installed, this conclusion may not hold. The difference in annual cost between the two tariffs is ~£193 and the typical difference between the FLUX and GO export tariffs is ~ £0.18. So if the new system could export ~1,000 kWh more in summer, then the balance could easily shift.

And indeed, that is what the simulations show. Notice that for 8,000 kWh of generation the annual cost of electricity would be negative i.e. the house would be a bona fide power station!

Click on Image for a larger version. Lower graph: estimates of the annual cost of electricity on the Octopus GO and Octopus FLUX tariffs as a function of the amount of solar generation. Upper graphs: Details of how the the import costs and export and rewards vary on the FLUX tariff (left) and GO tariff (right). [NOTE: The original graph had an erroneous curve plotted. This was updated at 23:27 on 23/2/2023]

If the newly installed panels generate as much as I hope, then the annual generation may approach 6,000 kWh and in this case, the FLUX tariff would be marginally cheaper.

Discussion#2: The effect of battery size 

Whilst I was making these calculations, I thought it would also be interesting to look at the effect of battery size. For my home – with solar PV generation of ~3,800 kWh/year – the simulations suggest that bigger batteries are better – no news there – but that above roughly 10 kWh the additional savings are minimal.

Click on Image for a larger version. Lower graph: estimates of the annual cost of electricity on the Octopus GO and Octopus FLUX tariffs as a function of battery size with ~ 3,800 kWh of solar generation. Upper graph: Details of how the the import costs and export and rewards vary on the FLUX tariff (left) and GO tariff (right).

This is a relief to me. It means that as the batteries degrade, the system itself is likely to continue to perform well for many years.

Discussion#3: Strategy 

Friends, life is complicated enough without having to consider battery management strategy. Nonetheless, this is where we are!

Observant readers may have noticed that I made no specific efforts to avoid consuming energy at peak hours because it doesn’t happen very often. But if it could be done, then on the FLUX tariff, there would be a reduction in both costs and carbon emissions during these dirtiest hours of the day.

The problem for me is that I am not sure whether the occult Tesla logic which controls my battery, is smart enough to avoid using electricity at peak times. If it could achieve this, then on days when the battery might be expected to run out early, the system might preemptively charge in the middle of the day (at 34p/kWh) and so avoid consuming grid electricity during the peak hours when the equivalent electricity would cost 47.5p/kWh.

For a load of around 1 kW for 3 hours the potential saving would be around 45p/day which over 60 days of winter might amount to ~£27/year.

Errors and Mistakes

Friends, writing this article has been very difficult, and I must warn you although I have carried out many checks, I might easily have made some errors. Sorry. Please feel free to point them out to me when you spot them. The results appear to be about right for my own situation and so I have modest confidence that the errors are not too major.

But overall, despite the fact there are errors and mistakes, I think this spreadsheet offers a tool for evaluating the complex interaction of solar generation, battery storage, and time-of-use tariffs. I hope it helps.