Sometimes you have to spend money to save money

Paying for something that improves your life in the future is okay! (credit)

I forgot to check my blog’s email until recently and was very surprised to see that a couple of people had contacted me – thank you readers! This post is dedicated to one of them asking a pretty good question regarding the electric moped article’s conclusion.

“Instead of reducing your friend’s outgoings by switching to the moped instead of his car, haven’t you actually massively increased his outgoings for the next 3 years?”

Anonymous reader

I should point out that a couple of assumptions have been made here by our anonymous reader. Presumably we are assuming that my friend did not outright buy the moped with cash and has financed it or otherwise gotten a loan to pay for it. Also in the original post I think we determined the payback was roughly 2 years as well, but in fairness I hadn’t factored in him taking the CBT, getting a helmet and adequate riding clothing so maybe that would be nearer the mark.

So I thought it would be interesting to explore how my friend could potentially buy said moped with a couple of different options and then we’ll get into the meat of what this blog post is about – yes, sometimes you do indeed need to spend money to save money – as paradoxical as that sounds!

Moped financing options

Scenario #1: Person has enough cash on hand to buy moped outright.

In this instance the person gets immediate benefit from the new shiny electric moped and their monthly running costs are immediately reduced. Here they are looking just at what amount of time it would take for the moped to pay for itself (fuel costs vs price of moped and electricity costs) which was covered in the original article.

Scenario #2: Person finances on a 0% spending credit card and pays minimum.

The person applies for a 0% spending credit card, slaps the moped on that and then just pays the minimum balance (assumed to be 2.25% a month of the outstanding balance).

Scenario #3: Person finances on a 0% spending credit card and pays off in equal chunks.

The person applies for a 0% spending credit card, slaps the moped on that and then pays the amount off in equal chunks spread over the 0% months offered. I will assume 24 months based on a similar credit card I own.

Scenario #4: Person has poor credit and finances at 9.9% APR from seller over 2 years.

Perhaps your credit score is not good enough for one of those 0% cards and you don’t have the money on hand to buy it outright. Then in the worst case, a loan from the seller of the moped may be available, usually at a fairly high rate. Based on one of the sites where you can actually buy this moped, they offer a 9.9% APR loan so we’ll use that.

Let’s chart out these options and compare in how my friend has several options that could leave him better off or worse in the near term but better in the long term.

Graphing out the scenarios

Scenario #1Bought outright with cash.
Scenario #2aBought on 0% card, paid minimum
Scenario #2bBought on 0% card, paid minimum + fuel savings
Scenario #3aBought on 0% card, paid 1/24th back
Scenario #3bBought on 0% card, paid 1/24th back + fuel savings
Scenario #4aBought on 9.9% APR loan over 2 years
Scenario #4bBought on 9.9% APR loan over 2 years + fuel savings
A table summarising the scenarios outlined in the graph below
Chart comparing the scenarios (click to enlarge)

Taking the same scenario from the original article, my friend would be doing roughly 660 miles a month commuting to his office and back. We worked out his monthly savings from not driving his car would be about £110.52. He could either keep those savings to himself every month or he could put it towards the debt he took out to buy the moped (assuming he didn’t just use cash to buy it). Below is how much extra money he would have each month with each option (or less) at the beginning.

Scenario #1+ £110.52 a month (but bought moped with existing savings)
Scenario #2a+ £54.48 a month on average (but still has £1,851 to pay off)
Scenario #2b– £34.64 a month on average (but owns moped at the end of ~2 years)
Scenario #3a– £22.65 a month (but owns moped at the end of 2 years)
Scenario #3b– £169.65 a month (but owns moped after ~1 year)
Scenario #4a– £36.77 a month (but owns moped at the end of 2 years)
Scenario #4b– £147.29 a month (but owns moped after ~14 months)
A table showing the savings per month for each scenario

The wonderful thing about money is there’s generally several options to how to buy something. If you happen to have the savings upfront, you are basically getting a £1,326 return on your money every year as you immediately get to enjoy the fuel savings, equal to roughly a 41% return on investment.

If you’re stuck for cash but have a good credit score, you could borrow the ‘free’ money and stretch the payments out and you could still enjoy savings of over £50 a month in Scenario #2a! You of course do need to find the additional £1851 to pay off your 0% loan after the 2 years are up but I’d hope that’s not a struggle if you’re being smart with your money (you should have at least £1,300 from your fuel savings over 2 years *ahem*).

Where the debt is 0% I would try to stretch out the repayments to the maximum length of that period and no more so that I’m maximising the loan, thus Scenario #3a makes the most sense to me personally. Paying £22.65 a month for 2 years seems pretty reasonable. That’s less than one restaurant meal a month! And at the end of the 2 year period the moped would be owned by me and immediately I can ratchet up to saving £110.52 a month.

Whereas if the loan had a high APR I would be killing it ASAP, putting all my fuel savings into killing the debt such as in Scenario #4b. Yes, the moped is actually costing you an extra £150 a month, but the short term pain would mean that the moped would be owned by you faster and you’re paying that horrible interest rate for the minimum period possible. From month 15 onwards you can start enjoying those sweet sweet fuel savings properly though.

Of course these options exist for many aspects of life

This kind of thinking can apply to multiple areas of life. I mean there’s a reason people buy season tickets for trains – they work out cheaper over the longer term. I know I was never particularly happy about having to buy a season ticket into London in my old job but financially it made sense and my work offered 0% loans specifically for this so I took advantage of the scheme.

Bulk buying in supermarkets is another common example. A 10 kg bag of rice when compared to 10x 1 kg bags of rice is likely to be substantially cheaper (if a pain to get home without a car). Of course a 1 kg bag is much cheaper than a 10 kg bag on it’s own, but if you get through enough rice in a year it can make obvious sense.

Trading in your low MPG car for a higher MPG one? Same thinking.

Moving closer to your work place so the commute is shorter and less costly? Same thinking.

Higher upfront cost but lower ongoing expenses. Just make sure what you’re buying will actually be used as much as you expect, else it could have been cheaper to keep paying the ‘non-discount’ price. A good example is my wife and the local swimming pool. She likes to go once a week and they offered her a year membership (paid monthly). However, it worked out cheaper for her to just pay as you go once a week than bother with the hassle of the yearly payment. If she moved up to twice a week I think it would be marginally cheaper to take the membership but I imagine she’d still avoid it as some gym memberships are just an absolute pain to cancel (speaking from personal experience).

Have you made any purchases or decisions with a higher upfront cost that leads to lower ongoing costs? Let me know in the comments below!

Just £20,000 to save the world

Fling a light into the future, your children and grand-children will thank you (credit)

The timing of this post is probably not the best, but I wanted to write it anyway just so I can link to it in the future. It also became more relevant to me after a couple of conversations I had with my my Dad and one of my Uncles. Get comfy, this is going to be a long one.

We were discussing things like the quarantine, how a couple of my cousins were on furlough, what do you think the future will look like afterwards and we also got on the topic of solar panels and how more cars in the future will probably be electric. As you may know if you read this blog, I am very keen to get as many people as possible to buy into these technologies and accelerate the UK’s reduction on oil, gas and coal. The window to make this change is short and the sooner we start the better.

“You could install solar panels and buy a used electric car you know? I’ve done it and it works really well!”, I said.

“Nah, nothing I do will really make a difference. Plus it costs a lot of money to do and I may not be alive long enough for it to be worth it.”, said my Uncle. My Dad also agreed. They’re both just entering their early 60s.

This is the same man who recently spent over £40,000 doing up his kitchen. Now let me be perfectly clear here: It’s their money and they can spend it absolutely any way they want. I have no problem with that. What I do want to do in this post though is show just how much of a difference they really could make for a (relatively) small amount of money. I’ve done the leg work to show you just how big an impact you can have.

So before we begin, this is an appeal to the following people. Even if you aren’t one of the below yet, you may well be in the future. I only ask you keep this in mind when the time comes.

You are:

  • A homeowner in a detached / semi-detached / bungalow property
  • Have off-street parking
  • Have no debts other than your mortgage
  • Have potentially up to £20,000 available / willing to invest in alternate strategies

I’m aware that’s a bit of a tall order, but anyone who’s interested in their finances will get there at some point. It doesn’t matter if you’re 30 (like me) or over 60. If you read this blog or any of the other excellent FIRE / investing ones I guarantee you’ll get there one day.

The CO2 impact of the UK

In 2018 the UK produced, as a whole, 451.5 million tonnes of carbon dioxide equivalent. Here’s a breakdown of what that amount consisted of:

For this discussion I will be focusing on the three I think you can make the biggest impact on right now: Transport, Energy Generation and Residential. These make up 66% of that graph.

Your house

The average household in the UK uses 5,129 kWh of electricity a year (based on 2014 data). Each kWh used releases about 309g of CO2. So the average household is releasing 1,584 kg of CO2 every year. You can estimate your own true amount below.

CO2 (KG) produced per yearly household electricity usage

Your car

The average new car in the UK gets a (stated) mpg (miles per gallon) of around 50.5 for petrol and 57.9 for diesel. The CO2 produced per mile is roughly 194.4g for a petrol car and 197.4g for a diesel car. The average car in the UK does 7,600 miles a year, with petrol cars on average travelling 6,600 miles and diesel cars on average travelling 9,400 miles.

So the average new petrol car produces about 1,283 kg of CO2 a year and the average new diesel car produces 1,827 kg of CO2 a year. You can estimate your own true amount below.

CO2 (KG) produced depending on car MPG and yearly mileage

If you’re keeping track so far, your home and one of your petrol cars (I can safely assume you have at least two cars) is producing, on average, 2,867 kg or nearly 3 tonnes of CO2 a year. If you’re above average in driving mileage or energy usage you’ll be doing even worse.

You may be going “Holy crap, that seems like a lot!” or you may be thinking “And so what?“. Either way I’d like to make a point about how the UK is looking right now.

Coronavirus Impact

To steal a line from one of Ermine’s posts: “I live in a small town so air pollution is low here, but even so the drop in traffic makes one’s sense of smell more acute as Nature blooms.”

I live on the outskirts of London and the difference has been remarkable. My wife suffers from asthma and she’s definitely noticed a difference when we walk along the main roads. What has changed? There’s far less cars travelling about. That 28% of CO2 emissions from transport I mentioned above? I wouldn’t be surprised if it was down to 5% for the past couple of months as we’ve all been cooped up inside and (hopefully) able to work from home.

For the past 25 days and counting, the UK has not burnt any coal to generate power.

How much coal the UK has been burning every day over the last few years (credit)

This is while we’ve all been stuck inside and probably using more power than is usual, such as more cooking at home, using laptops and watching TV. This has predominately been due to the explosion in renewable energy being rolled out (mainly solar and wind) and also some expansion in gas power stations. The future is here now and the technology works.

Spending to save the world

What I list here is essentially a subset of The Solar House Experiment but focused purely on reduction in emissions to price. First we’ll go through the components and then just how much they can be expected to reduce your emissions in their lifetimes. You could purchase these in any order but let’s go from simplest to hardest to estimate as these all have synergies with each other.

The Car – About £9,000

First up is to replace one of your cars with an electric one. Here is a perfect example of a great small electric car you can use to pop to the shops and get around to see the family: the Renault Zoe with a 40 kWh battery.

Renault Zoe with 40 kWh battery on AutoTrader

Perfectly capable of 150 miles of range in the summer, and over 120 miles in the freezing winter. All yours for less than I paid for my 1 year old Ford Focus about a decade ago. If you ever need to go further than 150 miles in one go you could either use the expanding network of rapid chargers found at all good motorway services, else feel free to fire up your petrol / diesel car you still have if you’re too old to deal with the hassle.

The average length of a commuter trip by car / van is about 10 miles. In London the average is 8.6 miles and you don’t have to pay the congestion charge in this beauty. This is well within the capabilities of the car.

How much CO2 does an electric car produce per mile? While it has no tailpipe emissions, the electricity to charge it has to come from somewhere. As mentioned previously, a kWh of electricity is roughly 309g of CO2 on average so let’s use that number (it’s actually less at night when most cars are charged but let’s give the petrol and diesel cars a chance).

A rough guide for electric cars is that 1 kWh of battery power can move a car about 4 miles, therefore per mile an electric car produces about 77g of CO2. Let’s compare that against an average new petrol and diesel car.

Comparison of CO2 against a new petrol and diesel car with a typical electric car

Just in case you missed that – replacing one small efficient petrol car with a small electric car results in a reduction of 61% of CO2 emissions. For the average mileage of a new petrol car that is a reduction of 782 kg of CO2 per year. For the average mileage of a new diesel car that is a reduction of 1,114 kg or over a literal metric tonne!

The Solar Panels – About £6,000

Solar panel prices have been steadily dropping for the past decade or so. While it is very unfortunate that the Feed-In-Tariff scheme has ended, there are still major savings to be made if your usage is high. Again the average UK household uses about 5,129 kWh per year of electricity.

Again, I’ve done the leg work for you and gotten quotes for a 4 kWh system with inverter and installation costs. This was for a simple one roof install like the image above, which would include 16 panels. The quotes varied from around £6,000 up to £7,500 but with some haggling I’m sure you could get it slightly lower. Solar panels all come with a 25 year warranty these days and will probably last over 30 years comfortably.

A low-cost panel 4 kWh system in the UK will produce about 3,400 kWh a year. On average a household will use about 40% of that energy through normal usage but this can be boosted to over 60% if you’re smart with when you run your dishwasher, washing machine, oven, etc. Whether or not you use the generated power, you are either not drawing power from the grid and thus the grid is producing less energy or you are exporting your clean power generation to the grid for someone else to use, also offsetting the grid energy.

As detailed before, a kWh of grid energy generates roughly 309g of CO2. By reducing or exporting your energy usage by 3,400 kWh you are saving 1,050 kg or just over 1 tonne of CO2 from being released.

The Solar Battery – About £4,500

I thought about not including this because I decided that right now the financial numbers didn’t quite make sense for my usage. But we’re dealing with the average household here, not my super low usage one. Solar batteries help boost your returns on your solar investment and also allow you smooth out some of the variability of the British weather. While they don’t decrease your CO2 emissions as a whole, they do help lower your own personal usage which may be important to some people.

Moixa’s solar battery is currently the best price / ROI on the market

Moixa’s 4.8 kWh (3.84 kWh usable) battery is the leader in price to storage for us average mortals who don’t have £8,000 lying about for a Tesla Powerwall. With a battery of this size, you will likely be able to retain and use around 80% of your solar generation. You could also charge it up on the cheaper overnight rates and use it when electricity is more expensive and / or the sun is hidden behind the clouds.

At an 80% utilisation rate of your solar, your household will be using around 2,720 kWh of electricity less than before, or a reduction of over 50% on your yearly electricity bill!

With these three relatively small changes – solar panels and a solar battery can be installed in as little as a day and a car can be picked up in one day as well – you can reduce your CO2 emissions by an astounding 1,832 kg – 2,164 kg a year on average if you make no other changes in your life. That is two-thirds less of what the average UK household produces.

The financials of saving the world

I don’t expect you to do good things for the world and your family for no benefit. These purchases are expensive no doubt, but think of it this way – this is only one year of an ISA allowance. Every part will last well over 10 years, with some lasting 30 years or more.

Let’s do some sums based on the above calculations and you tell me if it’s worth keeping this serene less polluted environment we’ve unexpectedly found ourselves in.

First of all, how much cheaper is it to travel by electric car than the petrol or diesel equivalent?

Assumed prices: £1.20/litre for petrol, £1.25/litre for diesel, £0.07/kWh for Economy 7 overnight tariff

This is before any savings from less maintenance requirements, no car tax and any savings you may make such as driving in the congestion charge zone in London.

Second of all, how much are you likely to save from your solar panels a year?

Assumptions: 40% self-consumption and 60% export at 5.5p/kWh with a 4 kWh solar system

The above includes self-consumption and export. You can be paid for every kWh you export, such as Octopus Energy’s Outgoing tariff which pays 5.5p per kWh.

And thirdly, how would the above look if you installed a solar battery and consumed 80% of your solar generation?

Assumptions: 80% self-consumption and 20% export at 5.5p/kWh with a 4 kWh solar system

Are you a Zero or a Hero?

With this new found information will you choose to do nothing or realise you have the power to make a significant difference in the world? To put all those pretty charts together into a nice summary – here’s what the future could look like for you 10 years from now.

Do NothingCarCar + SolarCar + Solar + Battery
Savings (£)£0£6,046 (petrol)
£7,564 (diesel)
£10,118 (p)
£11,636 (d)
£13,965 (p)
£15,483 (d)
(CO2 tonnes)
07,735 kg (p)
11,289 kg (d)
18,241 kg (p)
21,795 kg (d)
18,241 kg (p)
21,795 kg (d)
CO2 Reduction (%)0%25% (p)
37% (d)
61% (p)
72% (d)
61% (p)
72% (d)
Cost (£)0~£9,000
(car trade-in not factored)
(car trade-in not factored)
(car trade-in not factored)
ROI (%)0~6.7% / year (p)
~8.4% / year (d)
~6.7% / year (p)
~7.7% / year (d)
~7.1% / year (p)
~7.9% / year (d)
An estimated return on investment, based on the average household

If nothing else from the above table, you can take away the fact that while putting the money down to purchase these technologies isn’t cheap, it can be rewarding both from an environmental and financial aspect. Hell if you have an older car to trade in, you may be able to get the electric car for near free and the ROI shoots up massively!

I would be interested to know where you can get a 7%+ return on investment with little risk over a 10 year period.

So don’t tell me you can’t do anything about it. Instead, work out how to get it done. I’ve done most of the hard work for you – now work out which future you want yourself, your kids and your grand kids to inhabit. Time is running out.

Sources for research:

TSHE: Time for a solar battery?

It’s definitely a pretty piece of kit, but is it worth the price tag? (credit)

This post is part of an ongoing series in The Solar House Experiment where I review and investigate different options available to drag my house into the 21st century and play with some cool technology along the way. Other posts in the series are included below:
The Solar House Experiment: An Overview
TSHE: Solar Panels + 1 year review

I finally did it. I broke down and started calculating out whether I could justify a solar battery or not for the house. I wish I could say it was due to boredom or having a long weekend of little to do, but it was actually because of this picture I took of the system output:

Yep, it’s early afternoon and both the electric car and hot water are maxed out. That’s 2.6 kWh of power leaving the house, every hour…

As we head into the summer months I have an increasing ‘problem’ that my solar panels are producing way more than I can consume during the day. And then at night we fire up the oven / TV / computers / lights and none of it was saved and I have to pay (more) to buy the electricity I sold to the grid (for way less). It just seems wasteful and inefficient to me!

Doing the maths

I usually work out how much something will cost and then work out the Return On Investment (ROI) in years but I’m going to do something a bit different today and work forwards instead. Currently we use about 1500 kWh per year in the house, excluding the hot water solar diverter (which only uses excess solar) and the electric car. Currently having the solar panels reduces our usage from the grid by about ~35% meaning we’re paying to use about 975 kWh of electricity for the house and (in non-Coronavirus times) I estimated the car would need about 2,500 kWh of electricity a year for my driving patterns. However the car is charged at a much cheaper rate due to the tariff I’m on (Octopus Go).

So in summary the maximum savings I could achieve in an ideal scenario where all solar energy is produced and consumed by myself (aka pay nothing for grid electricity) is:

Usage TypePower Usage (kWh)Cost Per kWhTotal
Table showing max potential savings with a solar battery (assumes all solar power generated is consumed instead of exported)

This solar battery would need to be able to store about 4 kWh a day on average (3000 kWh produced a year, minus 500 kWh consumed by the house already, minus 1000 kWh consumed by the hot water, and then divided by 365 days a year). Or to simplify:

(3000 kWh – 1500 kWh) / 365 days = 4 kWh/day

This would probably allow me to cover 90% of the house’s needs through the year… but would barely reduce my electric car charging usage. Hmm. We’ll come back to this.

I also decided that a 12 year ROI is not a bad thing for a solar battery. I think they will easily last up to 15 years and beyond but will of course degrade over time. As electricity bills have generally been increasing by 3% each year, the total I should be prepared to spend for a battery and receive a 12 year ROI that would cover only the house usage would be about £2,000 overall.

Checking out the options

After speaking with several companies and getting some quotes I narrowed my options down to three main choices (plus a wild card!). Spoiler alert: none of them meet my above requirements, but it’s an interesting investigation into the market right now.

Moixa BatteryTesla PowerwallEnphase BatterY
Product InfoLinkLinkLink
(2x 1.2)
Usable Capacity (kWh)3.8413.52.4
(2x 1.2)
Max Sustained Output (kWh)
Warranty (Years)10 / Lifetime1010
Notes12 months 0% payment plan available
Extra £50/year for signing up to GridShare program
Mountable inside or outsideModular design allows easy expansion at later date
(with installation)
Table highlighting the different options available I would consider

Straight out of the gate you can see that even the cheapest usable option, the 2x Enphase batteries, are too expensive and don’t have enough capacity for me to make a big enough saving to justify it. It also outputs a very paltry amount of power (500 Watts an hour).

At the other end, the Tesla Powerwall has more than enough capacity but is over 4x my 12 year ROI budget. It could power a kettle / oven / dishwasher too which is nice. The problem is that the ROI greatly exceeds the potential lifetime of the battery, even if I used it to charge the car as well as power the house. This is only for people who have money to burn.

The Moixa battery is actually the most interesting to me for two reasons. One, they offer a 12 month 0% finance option which would mean the maths on the ROI changes a little and I wouldn’t have to stump up all the cash straight away. Second, they offer an ‘unlimited’ warranty on the battery and £50 a year (for 3 years) if you sign up to their GridShare scheme which basically makes money for them by using a percentage of your battery to deal with high demand on the grid, when electricity costs the most. What annoys me is that 20% of the battery capacity is locked away to, I suspect, fulfil that lifetime warranty. If there was a 6 kWh usable capacity at that price point, I think I would take the dive.

The wildcard option

This is an 8 year old electric car with a 24 kWh battery available for around £5,300.

A 2012 Nissan Leaf on the AutoTrader website

This is a Vehicle to Grid (V2G) charger that works with the Leaf’s CHAdeMO connector that is currently being tested by OVO Energy in the wild.

The prototype V2G charger by OVO Energy

V2G is where you store power in your car which is connected to your house through a charging cable, like above. When the house needs energy, the car’s battery is used to supply that energy and no power is taken from the grid. In the future it is expected that more and more of the national grid in the UK will be managed in this way, helping reduce the need for coal / oil / gas power plants which are mainly used to deal with high load on the grid (such as when everyone gets home and starts cooking dinner).

Aside from space issues (I happen to have an empty garage I could utilise), there is nothing to stop me buying an old electric car like the one above, whose battery is likely to still have about 70-80% of it’s original capacity (let’s say ~17 kWh for that Leaf above), install a V2G charger when they become more wildly available and then plug it in and never touch the thing again. I could declare the car SORN (not legal to drive on UK roads) and it then literally becomes a battery on wheels with more capacity than a Tesla Powerwall at a cheaper price.

And I can easily sell the battery (car) on at a later date. A lot harder to sell a fixed installation battery on to someone else. I could even potentially take it with me to a new property if I decide to move!

But you have an electric car already? Use that?

I do, but alas Tesla have basically said they will not allow their cars to be used as V2G batteries. The fact they have a separate product (the Powerwall) to sell you is more likely to be the reason than the car is unable to do it, but I don’t know for sure.

Current V2G chargers only work with the CHAdeMO connector, whereas my Tesla Model 3 has a CSS connector and I don’t know of any in development right now. Maybe in the future…

In summary

I am optimistic that the costs for solar batteries will be coming down over the next 5 years or so. But right now I think they either offer too little capacity for the cost or they are simply way too expensive for your average user to ever really make their money back on them. I am still interested in the Moixa battery personally and will be keeping an eye on their future offerings, but right now? I’m going back to watching someone else make use of my excess solar power. Oh well.

2020 Q1 Update: Coronavirus Quarantine Edition

The hidden danger floating around the world

Well, it certainly has been the weirdest start to a year that I can ever remember. Lock downs, food shortages, eerily quiet streets and more video conference calls than you can shake a stick at. As always, I hope you have been spared the Covid-19 disease so far or are having the mildest symptoms possible while we all try and wait out the virus and not overwhelm the incredible people working at the NHS.

I am fully expecting to be furloughed in the not too distant future as the work at my employer has been steadily dropping due to postponements and cancellations of projects but so far so action has been taken by management in this vein so fingers crossed. Fortunately, being able to survive on a rather low amount of money a month, even dropping to the £2,500 maximum payment from the government (a not insignificant pay cut), would still let me have a positive savings rate. Further proof that the FIRE lifestyle works both in the good and bad times! While my FIRE pot has certainly taken a bit of a battering, I still hold enough in cash, bonds and shares to get me through a couple of years if the shit really does hit the fan harder than it already has.

And as a nice extra bonus, when I passed my ‘bloody difficult’ exam, it turns out I was eligible for an extra ~£2,000 (after tax) bonus which I never knew about! That money has been chucked at the car loan, as per Monevator’s excellent series on debt I read recently.

Matched Betting

Encouraged by TheSavingNinja’s and weenie’s posts on Matched Betting, I thought I would take a look into it and see if it was for me. I made £504 (after costs) in late January which was nice but I’ve decided it just takes up too much time for me to bother with on the whole and I don’t enjoy being spammed by bookmakers. Based on the fact most sporting events have been cancelled recently I’m not sure it would be worth doing right now anyway. But if you want to try it out I’ll provide weenie’s OddsMonkey referral link here – I have no wish to benefit from promoting Matched Betting, for reasons I may elaborate on in a future post.

Solar House Project

The days are getting longer and the solar power is rising! Having just submitted my Feed-in-Tariff figures for Q1 of 2020 I’m happy to report that the panels managed to produce around 497 kW of power! We have been getting pretty much free hot water during the sunniest days and on an especially sunny long weekend the car gained 180 miles (~45 kW) of ‘free’ sunlight powered range which is amazing!

Due to the extended lock down though, I am running into the issue of the car’s battery being near full all the time and unable to use the excess power being generated off the panels and it is instead being sent out to the grid. This isn’t a bad thing (I’m offsetting someone else burning gas / coal) but does lower my utilisation figures(!).

Health & Fitness

This game was destroying me at the beginning of the year

I mentioned way back in early January (remember that simpler time?) that I would be progressing from my light(-ish) workout of Ring Fit Adventure to a ‘proper’ workout, such as the Insanity Workout during the summer. Well that plan was brought forward massively and my wife and I now spend 6 days a week doing the Insanity routine religiously of an evening, just before a nice hot shower and a healthy dinner.

We’re currently near the end of Week 3 and having done ~16/17 workouts now, I can say that I was absolutely not ready for this again haha. But I am improving! It also adds a bit of structure to our days and we actually look forward to it, because afterwards we’re free to relax. And having a gym buddy does make it so much easier to keep going, even when you just want to put on Netflix and eat biscuits instead…

Net Worth Updates

And finally, how is the net worth situation looking on my end? Frankly, when I did the calculations for valuations on 31st March I was bit surprised the drops were as low as they are. Certainly they may drop a lot further as the quarantines around the world drag on, but there’s a surprising amount of ‘meh’ in the markets on the whole from what I can see (ignoring specific areas such as travel which have cratered like an asteroid hitting the moon).

All in all, I am roughly down about 12% from 31st December 2019, excluding new money added during 2020 Q1. That drop was made a lot less worse by the fact I had shifted nearly 35% of my portfolio to bonds in 2019 Q4 based on trying to estimate my risk tolerance and deciding being 100% equities was perhaps not the best idea. Pure luck on my part that I preempted the stock market crash, but I’ll take it!

For the latter part of 2019 I was buying £300 of VAGP (Global Bonds ETF) every month and not much else as I was still throwing money at my car loan as much as possible. Since the crash I have shifted to buying £500 a month of VHYL (High Yield Shares ETF) and have shifted 10% of my portfolio from VAGP to VHYL. I also have a large slug of VWRL (World Index Tracker ETF) but am not currently adding to it yet. The car loan is nearly gone and then I can go full on into pushing £2,000 a month into my ISA on both VWRL and VHYL, assuming my usual employment holds out(!).

Here’s how the overall situation is looking for now:

December 2019 ended at around £210k, whereas March 2020 ended at around £220k
(Blue is non-pension stuff, Orange is pension stuff (SIPP / Company Pension))
Investment2019 Q4Contributions2020 Q1Difference
(minus Contributions)
A table showing the contributions made in the past 3 months

If you’re wondering how my pension contributions are so high, it’s because I currently sacrifice 25% of my salary into my work pension, my employer tops it up by an additional 5% and they also give me most of their employer NI savings. I also had the option to receive my bonus entirely into my pension if I wanted, which I took them up on and which saved me a large chunk of income tax! Hopefully if/when the markets recover I will have been very happy to have bought in at lower share prices as the Pension currently sits in a 25/75 bond/equities split.

Plans & Goals for Q2

I only have a few goals going forward right now:

  • Get fitter with Insanity and enjoy more time at home
  • Push as much money into my ISA as possible before being furloughed
  • Play more games with friends (online of course!) as I have more free time
  • Finish paying off the car loan (less than £3,000 to go)!
  • Keep washing my hands!

What are your own goals for the coming summer? Keep safe and have a good one!

Reflections on a world turned upside down

Everything seems very uncertain right now (credit)

A mild fear seems to stalk the lands as of present. An undercurrent of uneasiness. If you haven’t been living under a rock for the past few months then you’re well aware the Coronavirus is upon us and is working it’s way through the world. I hope you are well prepared (and I don’t just mean the toilet paper stockpiling) and your friends and family are well and will remain that way.

I’m not going to comment on whether the UK is prepared enough, or the response so far or even on the idiots buying up all the toilet roll at your local supermarket. I’ll instead focus on the financial aspects and the time we will likely all have to pause and reflect while under self-imposed or forced quarantines.

Risk tolerance

It was only a few months ago I was 100% in equities following the general advice of The Savings Ninja and MMM that “I’m young and don’t need no damn bonds – I’ll easily have time to recover from any falls”. I can’t remember exactly when but I came across this very thoughtful post from Monevator and reassessed my thinking. Not long afterwards I made the decision to shift my separate pots of money into a more bond heavy portfolio, like below:

Bonds / Equities distribution around December 2019

To say this random article turned out to be very helpful is an understatement! Many thanks to the Monevator crew, but I can only attribute this shift to pure luck. I hope I am able to use it well in the future. However, I can also confirm that even with my portfolio down about 9% overall I’m not panicking and I’m sleeping pretty well, so I apparently found an okay level of risk tolerance for myself. I am of course aware it could go way further down too though!

If you’re wondering why the SIPP is so bond heavy, I was taking advantage of a transfer in offer to a provider and it was then sitting waiting for Vanguard to open their own SIPP, which was delayed… I’d half forgotten about it, oops. Luckily it’s only a small part of my portfolio.

When being irrational is rational

I think there gets a point where the irrational acting people reach such a critical mass that not joining in with them could, rationally, leave you worse off. While fortunately my wife and I have enough non-perishable food that we could last a few weeks by default (we buy rice and pasta by the 10kg bags as standard), it was eye opening to wander down the various aisles at our local supermarket and see all the bare shelves.

Pasta? Gone. Rice? Gone. Bottled water? Gone, except the Dasani brand stuff (nobody ever wants that!). Something at the back of your head does start to prickle and make you wonder if you’re not the rational one and should pick up an extra large box of Weetabix just in case…

Within the FIRE blogosphere, there has also been a wave of “my equities are higher than ever!” and “bonds are a drag on returns!” with only perhaps Ermine and Monevator sounding the gong of “steady on folks, this can’t last forever!”. But going against the grain is not easy and I felt much inner turmoil watching other bloggers post record 20% returns in the year when I took some risk off the table and settled for my meagre ~15%.

Exploring volatility

I picked up a copy of Antifragile by Nassim Taleb from my local library to read while work is likely to have some downtime and I’m only about a quarter through it. I want to do a full review on it in a later post but I have to say I’m gaining a new perspective on how I view the world. Though I do think he bashes lecturers a bit much. I may also read Black Swan at some point, one of his most famous books.

If I were a super active investor it would be intriguing to apply an estimate of volatility to the current Coronavirus crisis. Will the UK end up like Italy in two weeks? Is the FTSE 100 going down further, hitting the lows of the 2008 Financial Crisis? How does Brexit factor into all this? Should I invest in loo roll manufacturers? Will the drop in oil price have an effect on all the above and will it be positive or negative? That last one is probably negative for me, the electric car was sort of a hedge on higher petrol prices, heh.

Of course the correct passive answer is to carry on carrying on. I’ve upped my contributions a little to buy in while things are a little lower but I don’t have a large surplus of cash I can just throw into the market right now and I won’t be shifting my bonds into equities until there’s a 5% increase or decrease on one or the other which hasn’t happened yet (though we’re getting close).

GBP version of VWRL as of 13th March 2020

It is worth pointing out that even with the fairly big global drops in stock markets, we’re still nowhere near the prices available back when I first started investing in 2016. I had bugger all cash to spare then but those small amounts are still doing pretty well compared to now. Keep everything in perspective when it comes to your portfolio. If you’re under 50, then you’ll probably be fine – both in terms of time to recover and due to the virus. If you’re coming up on retirement age then you should be heavier in bonds to reduce your volatility before draw-down and take extra care out there in the world.

Nothing will happen and then everything will

The problem with diseases like the Coronavirus is that they spread exponentially and us humans are only really good at thinking linearly. Take this as an example:

A lily pond starts with a single lily leaf. Each day the number of leaves will double, so 2 leaves on the second day, 4 leaves on the third day, etc. If the pond is full on the 30th day, on which day is the pond half full?

Have a think before you click through to the answer. It’s obvious once you stop and think about it, but our brains are trained to do linear processes by default. Your retirement plan is somewhat based on this exponential growth as well as you go into the longer term with compound interest or returns. Each year extra you work and can build up your funds gains you far more than the previous year due to new money being added and also compounding. Even if you spent all your money in that extra year working, you would still (likely) have a higher retirement income, just from the extra returns!

Compound 5% return over 30 years, starting with a £100,000 portfolio

Here an extra year of waiting from 29 to 30 years would net you an additional £19,601 whereas waiting an extra year even at the half way mark of 15 to 16 years only nets you £9,900 more! For the same amount of time! Now let’s look what happens when we’re dealing with the Coronavirus which has seen infection rates of nearly 200% a day:

The rate of growth per day if 1 person infects 2 people every day

If humans are bad at dealing with small values of exponential growth, then we’re really really bad at understanding high numbers of exponential growth. And as such, nothing will happen for a while and then it will happen all at once. Thinking in this way is hard, but I’m glad that there are people much smarter than me who have the knowledge and experience to deal with this outbreak.

My own workplace has just informed us that we’re not to travel to client site anymore, which seems a wise move. It also make it feel just that little bit more real. Stay safe out there folks, and go wash your hands!

Thoughts on doing something difficult

Having survived a difficult challenge – I had to make some notes (credit)

Hello again and apologies for not writing much in the month of Feburary.

Contary to popular rumours, I have not won the lottery and retired in the Bahamas (alas), I have just been extremely busy preparing and undertaking a massive exam at work. The prize? The “You’ve made it in this company” certification, where you start getting taken seriously for lead technical roles and the pay grades start bumping up rapidly. Also the option of being taken seriously for contracting occurs, as if you have this certification, you have a known set of skills which are very “marketable” to a potential client. Wish to claim this grand prize for yourself? Well nobody said it was going to be easy…

To protect my anonymity and the company I work for I won’t be going into specifics of what was in the exam, just an overview, but what I really want to talk about is how to prepare yourself for doing something very difficult. It could be an exam, that new exercise routine you’re planning, that big presentation you have coming up, or anything really where you’re less than 100% confident you’re going to smash it.

My own challenge

So what was I up against in this challenge?

  • Two 3 hour exams, fortunately multi-choice, unfortunately bloody hard with trick questions and barely enough time to complete them all
  • An interview with a long-standing technical lead answering obscure questions to products you’ve probably never used before
  • And the biggie: a 7 day continuous system build. It’s basically a 168 hour exam question. You start with a blank slate and build everything defined in the scenario question.

Put off yet? Only 1 in 3 people pass this process on average.

Starting at the beginning

The exams are simply knowledge checks. You’re tested on the contents of certain courses provided by the company. You’re expected to know quite a bit of this stuff just by simply doing your day to day job and learning the idiosyncrasies of how the software does certain things. Some of these are well known, others are not.

So I rocked up feeling pretty confident with myself, with pages of hand written notes and diagrams and all that good stuff you learn at University. I’ve been working at this company for several years now in big projects and am regarded well technically for developing and fixing things big and small. It can’t be too hard right?

Oh, bollocks. Is that a 45% fail grade on my exam?!

Ahem. After eating some humble pie, an additional week of study (and doing all the test exercises, extra external readings, talking with someone who’s done the exam previously and asking the product team why the hell does it work that way), and not wasting an hour of set study time I go for the exams again.

How the hell is 65% not a passing grade?!

Turns out it’s 70% oops. Which leads me to my first point.

#1 – You will fail. Repeatedly.

Roughly what I looked like after the first exam (credit)

Unless you’re one of those top 0.1% of people who can take on any task and make it look effortless, you will fail. A lot. Perhaps you underestimated the size of the task. Perhaps your abilities really just aren’t good enough yet. There’s no shame in it. Eat the humble pie, thank yourself for the experience and accept you need to grow. We all start at ground zero; it’s up to you to start the climb up.

Fortunately, you can improve! One of the most amazing things about humans is our ability to share knowledge and experience. Once you’ve identified a weakness, you can take steps to minimise and correct it. I wasn’t being thorough enough in my studies and got a wake up call. My corrective actions, while not leading to a pass the second time bumped up my score significantly. I went from feeling “holy crap I don’t know if I’ll be able to beat this” to “argh I was just a few percent off a pass” in a week. You’ve only truly lost when you give up.

Oh, I passed the third time by the way!

#2 – Make a plan and stick to it

The interview was more of the same. The key part I want to talk about is the 1 week build from hell. I’m used to working to tight deadlines. I’m used to people asking for the world yesterday and demanding it be delivered to last week. I’m used to to-do lists running several miles long all marked “Critical”. And yet I knew this would be the hardest challenge to me.

Why you ask? This 1 week build is a time management test. And I’m not great at that.

The one advantage I have is that the build scenario has a defined number of questions and you’re told what each question is worth e.g. one may be worth 20% and the other 40%. Armed with this knowledge and the ability to do basic maths, I plotted out rough time slots for each part of each question based on roughly how many hours i would have based on this percentage. The key is to then stick to those times! Speaking of which…

#3 – Check your progress against your plan

Get a timer – use your phone if it won’t distract you and check it regularly. It is frankly astounding how fast time goes when you really don’t want it to. Setting aside 3 hours to do a design document and finding out you’re two-thirds through the time and you’re only half done definitely puts you in panic mode and has the wonderful side effect (for me) of focusing my mind very firmly on the task at hand! Which leads to…

#4 – You have no time for perfect

Tick tock, tick tock (credit)

That bit of code that you know you could do better but is a bit janky now? It won’t get fixed, don’t kid yourself. The goal is ‘good enough’ and if you have the time, improve that to ‘slightly refined’. Perfect takes an inordinate amount of time. I’ve started applying this logic to my exercise routines as well – I’m not going to do every single workout perfectly and some days I’m going to just be off my game. The fact I’m doing it to the best of my ability given the constraints is enough.

Of course, the examiners in my case aren’t expecting a full bells and whistles build. They are expecting a working functional build though. The fact I even made it through the whole exam without collapsing into a caffeine-fuelled coma is a testament in itself. I know of other people who threw in the towel on day 4-5 because they just couldn’t picture the end result or messed up their first couple of days spending too much time on ‘nice-to-have’ features which weren’t that important to the end result.

#5 – Get feedback so you can improve next time!

People are generally a really nice bunch and are willing to help you if you only ask. Where possible, ask them to review your work. That week-long build I did? I failed.

However, I qualified for a “re-build” which meant I was given an additional day to improve the build but the pass mark went up. As a bonus though, I received some valuable feedback on suggested areas of improvement which made planning out how to make the most of my 24 hour grace period a lot easier to determine what to focus on.

And having just submitted my updated build a couple of days ago… I now play the waiting game to find out if the above advice was any good to myself!

EDIT: A last-minute update!

Not one day after I drafted the first ‘ready to go’ version of this post, I am happy to report that I have passed my exam! Time to work on that promotion speech! Woohoo!

Blitz Your Bills – 10 Ways to Reduce your Energy Costs

Smite your energy bills to unlock more savings! (credit)

Welcome to a new series I’m deciding to call “Blitz Your Bills” where we investigate the average UK household’s expenditures on the various costs of life and determine the best ways to improve your situation and thus savings! There are several cheap or even free ways to help lower your costs on your energy usage, from improving efficiency to finding better deals for what you’re paying, but I’ve decided to pick 10 simple steps you can take to make your home more efficient, less power hungry and less costly to run!

First of all, what is the ‘average’ usage of electricity and gas in a UK household? Using figures provided by one of the ‘Big 6’, Ovo Energy, we find that the average electricity usage is around 3700 kWh and the average gas usage is around 15,000 kWh a year according to Smarter Business. I found several sources where this fluctuates a bit, some higher and some lower, but this seems to be the general case.

Comparing dwelling types

A lot of things might affect the ‘average’, such as some houses using oil or electricity to heat their water and rooms. Certainly a lot of flats tend to run everything off electricity in my experience. Ovo Energy kindly break down the differences between housing types as well.

Average electricity usage by dwelling type (credit)

It’s interesting to note how end terrace houses seem to use 23% extra electricity due to having an additional outside wall! Detached houses similarly use about 8% more due to having an additional outside wall. For myself, living in a semi-detached house, I am comparing my own usage to 3,847 kWh of electricity usage a year.

Our house uses 60% less electricity

If you’ve read my one year review of The Solar House Experiment, then you’ll know that we use roughly ~1550 kWh a year, before factoring in the solar panels and excluding the electric car. That’s 60% less than the average semi-detached house! How on earth do we do that?!

First of all, it does help that our house is a relatively new build (just over 10 years old) and had an Energy Performance Rating (EPC) of B when new. Since then the previous owners added on an extra floor, so it’s not as good as it could be. But there are some other changes we have made that have reduced our usage considerably.

A breakdown of energy usage in the typical UK household (credit)

If you’re wanting to make the biggest impact, you need to target the most costly areas, which as you can see mostly covers kitchen appliances and lighting, with home electronics further down the scale but still a significant amount. With that, let’s look at 10 areas you can focus on to reduce your energy usage and bills.

#1 – Replace all bulbs with LEDS

These babies can save you lots of energy!

The previous owners of our house had pretty much all normal incandescent light bulbs everywhere! A 60W bulb uses, well, 60W of energy an hour that it’s turned on. An A++ energy efficient LED light bulb can output roughly the same amount of lumens (light) with just 6W of power – a 90% power saving! If you’re willing to drop to a 40W equivalent, likes the ones I’ve installed, then that’s 94% saving!

As an example, in our kitchen there were 6 recessed lights, each consuming 35W each for a total of 210W per hour (or about 3p/hour of electricity). I headed to my local hardware store, bought a couple of packs of LED replacement lights and replaced them. The new LED lights? They only draw 3.5W each or 21W total an hour – again, a 90% saving! For minimal effort and expense! And they’re as bright (possibly brighter) than the old ones! Ain’t technological progress grand?

#2 – Turn down your hot water

Did you know that you can set the temperature of your hot water boiler? I didn’t until I had my own place and started wondering why my electricity bill was so high. Turns out heating water by electricity is the most expensive way to do it. Oops. Though living in a flat at the time, I didn’t have any other option.

What I could do however, was reduce the energy by lowering the water tank’s thermometer to 60 degrees Celsius instead of the 80 degrees it was on previously! My showers were generally at 40 degrees and I had no need for anything higher – I never noticed the difference. Why not just drop the temperature down to that level? A minimum water temperature of 60 degrees Celsius is recommended to kill legionella bacteria (the cause of Legionnaires’ disease). It’s not worth risking yourself and your family to save a few pounds on hot water.

#3 – Get a temperature control kettle

No excuses, go buy a better kettle now!

I’ve already covered why this will have a pretty big impact on your energy savings in a separate article, but the principle is very much the same as #2. Water is a very energy intensive substance to heat up so if you heat it to a lower (but still very hot) temperature then you save money – especially as electricity is the most expensive way to heat water!

And the best thing is, you can buy one for just £30 which will pay back itself in under a year!

#4 – Investigate everything on stand-by

It can definitely be worth your while to pick up a power consumption device for your plugged-in electrical items. You can get a basic one for just £12.99 from Amazon for example. Plug in your various appliances and see how much power they are pulling even in ‘stand-by’ or ‘low power’ modes. For example I was surprised to learn just how much power my Xbox was drawing in its ‘off’ state. Delving into the options for it, I found a way to properly ‘turn it off’ when I hit the power button which took it’s stand-by usage from about 12W down to 1W.

Even with a full check of our devices, there is still roughly a 100W load in the house with everything turned off. I suspect this is related to our mesh Wi-Fi routers and some monitoring devices I have installed but it contributes towards an extra £100 a year on our electricity bill!

#5 – Turn down your heating / reduce the duration

Crank it closer to 19 degrees!

It’s an oldie but a goodie. If you’re heating your house to a lower temperature then you’ll pay less, pretty simple. Our house does have some cold spots in the ground floor and a radiator very stupidly positioned near the thermostat but we leave ours on 20 degrees Celsius which seems to be about 18/19 degrees elsewhere in the house.

Also make sure to keep your doors shut when heating specific rooms!

#6 – Check how efficient your appliances are

Also pay attention to water usage when it comes to ‘wet appliances’!

While I am not a proponent of throwing out a perfectly working appliance, it is worth checking how efficient your kitchen appliances are and your gas boiler. For example, nowadays I think it is pretty much impossible to buy a washing machine that isn’t at least ‘A’ rated and most ‘A+++’ machines cost no more than the ‘A’ rated ones. If you have an appliance that is nearing the end of its life – strongly consider going for a more efficient one. The savings over the lifetime of the device will likely pay off.

The Energy Saving Trust has a nice list of recommendations for all appliance types.

#7 – Insulation and air gaps

Turns out we had a big air gap in our front door and in a hole that was drilled for some electrical installation! Filling this gap up with the correct sealant has made the downstairs feel a bit warmer but we still need to sort out the front door as it is not sealing properly with the frame.

Another good idea is to check you have sufficient insulation in your walls and loft (if you have one). You will probably have to get a professional in to get this checked and installed, but if you’re spending a load on energy bills, it’s worth doing. The newer your house is however, the less likely this is needed as new homes are built to be very thermally efficient. I shall direct you to MSE for the full details of the government scheme, where you may be able to get some of this for free or discounted:

It can be worth getting a professional audit done (see #9) as they have the tools such as thermal cameras which make the job of finding cold spots easier to do.

#8 – Radiator reflectors

Who said aluminium can’t be stylish?

Radiator Reflectors are basically a thermally reflective foil layer (usually aluminium) that reflects the heat that would have been absorbed into the supporting wall out into the room instead. While there are different studies on their effectiveness, this study showed a 6% reduction in the energy required to heat a room after installing the reflector.

While I don’t usually mention brand names, it is notable that in the UK only two suppliers have reflectors approved by the government’s Carbon Emission Reduction Target (CERT) scheme: Radflek and Heatkeeper. The prices don’t look extortionate for an ongoing 6% reduction in your heating bill!

#9 – Get an energy audit

If you’re struggling with any of the above, it can be worthwhile getting a professional to give your house the once over with an energy audit. They have all the tools required such as thermal imaging cameras and the know-how to what your problems may be. You can find a well reviewed one on CheckATrade or equivalent site.

We got one in and he determined our radiators were undersized for a couple of rooms in our house and that they weren’t properly balanced. 20 minutes later he had fixed the balancing issue and refused to charge us! Our house is much toaster now and our heating bill seems to have dropped a little. Sometimes it pays to get an expert in!

#10 – Switch to a cheaper supplier

Finally we get to the big one. All of the ideas above reduce your energy consumption. The other way is to pay less for the actual energy you consume. I’ve left this one till last because while it is very important, I think you should take all the steps above first to reduce your consumption before you reduce your price per unit.

I am a long time user of MSEs Cheap Energy Club. Put in some details, find out how much energy you use a year (normally stated on your bill somewhere) and get a complete list of all energy companies and the price they will cost you. If you are on a standard tariff, first, what the actual f*ck are you doing paying so much (?!), and second, get onto a fixed deal now! You could literally save a few hundred pounds a year!

In summary

And that pretty much covers the biggies of UK household consumption! Some are very cheap or even free to implement right now whereas some will require more investment in new appliances or changing of your habits slightly. Do you have any more to add to the list?

My financial journey so far

The journey has had some pretty cool views along the way (credit)

I’ll be entirely honest, I wasn’t sure if I would ever be doing a ‘numbers’ post. But having seen how freely some other bloggers share their numbers (such as weenie at Quietly Saving, Saving Ninja, The FIRE Starter and Fire V London) and having learnt some things I never knew about before from their stories (matched betting and margin loans for example), I figured it wouldn’t be the worst thing in the world to share some figures and endure the intense scrutiny of the FIRE crowd. I think I run a pretty tight ship, but I have lately been seduced by the dark side – I’ve bought a couple of expensive items, therefore torpedoing my chances of an 80% savings rate this year. Oops.

Ever since about 2015 I’ve developed a habit of on the last day of each month, grab all the figures for my various accounts, investments, mortgages and credit cards (but not pensions, because I’m an idiot – we’ll get to that later) and update my ever growing spreadsheet. So from that point onward I have pretty accurate data on my net worth. Before that though, I’m going off some random bits of memory, some rough guesses and some older spreadsheets I found that relate to my household outgoings, so bear with me on the early parts!

For a brief introduction, you can refer back to my previous post of when I got my first job.

The Early Years (pre-2007)

End Net Worth: ~£1,000.

I started working when I was 16 and still at school doing a 8-9 hour shift every Saturday at the local fast food restaurant where I was paid about £35 a day (and got a free lunch out of it!). Not exactly astounding money but it did help me take my girlfriend at the time out to the movies and shopping! I continued to work there during my college years and I’m pretty sure by age 18 I had roughly £1,000 to my name which isn’t bad!

The Uni Years (2007 – 2010)

End Net Worth: ~-£10,000 (with £3,000 savings, student loan outstanding)

I was extremely fortunate when I left University not to have massive debts. The number one reason was back when I went University tuition fees were capped at £3,300 a year. The second reason was I got a grant for the first two years which halved my fees! I did a three year Bachelor’s in Computer Science, plus I had to pay rent in the grotty houses surrounding the University (I shared with 5 other guys). I continued to work at the fast food restaurant during the holidays (Summer, Easter, Christmas) and remember for the first time wondering what the hell this “Income Tax” was that appeared on my payslip(!).

I can’t remember exactly what I was earning but it wasn’t much even after I got a “promotion” to training the other guys how to make the food. I think I had about £3,000 in savings but my student debts were much bigger as I mainly used my money for fun times and didn’t even think about the loans that much.

Failing to find a job (~2010/11)

End Net Worth: ~-£4,000 (with £9,000 savings, student loan outstanding)

As detailed in my last story post, I graduated from University and then… failed to get a job in my chosen field. The Great Recession of 2008 had occurred a couple of years previously and it seems there was a massive over-supply of graduates trying to get a job. I remember going into an interview at IBM where they had 8 graduate positions available and the room was packed with about 200 people! And these were the ones who had gotten past the first two interview steps! I ended up doing nearly a full year at the fast food restaurant, interviewing for jobs in between shifts and also covering any shift I could get my hands on.

I was, of course, at this point still living at home with my parents. And while I love them dearly, going from complete freedom at Uni for three years back under parental rule was really starting to annoy me. On the upside, I only paid £200 a month rent and got lunch most days for free at work, so I had basically zero outgoings which was nice. I think I made about £8,000 from my job that year, minus the £2,400 I paid my parents for rent.

My first job (2011)

Start Net Worth: ~-£15,000 (with £3,000 savings, car loan, student loan outstanding)
End Net Worth: ~£0 (with £18,000 savings, car loan outstanding)

By some small miracle I actually got hired into a graduate scheme at an IT company! I joined as a “consultant”, which basically meant I travelled up and down the country building and supporting systems. This meant I needed a car. Cue me (in my stupidity of youth), spending nearly £11,000 on a 1 year old Ford Fiesta that looked very sporty but only had a dinky 1.4L engine. I did not have £11,000 to my name so… I borrowed about £5,000 and put down a deposit of £6,000 of my own money. Turns out that financing was quite pricey, but hey I was young and stupid, okay! In my (slight) defence I was still driving that car until late 2019!

My starting salary was £25,000 (I still remember being in the car when I got the call that I’d gotten the job. When they said the salary, I was “in a daze for days” according to my Mum). I was still living at home but due to me being away Monday – Friday for work this wasn’t such a bad problem as before! I think I just about broke even on net worth this year. I had started paying down my remaining student loans (and stupidly didn’t pay down the car loan).

Saving up to buy a flat (2012/13)

End Net Worth: ~£25,000 (no student loan, car loan outstanding)

I don’t remember exactly when but I got promoted to the next level and my salary got bumped up to £30,000, so I think I had just under £2,000 coming in a month. I joined the pension scheme at work, where the employer contributed 10% if I put in 2.5%! I put in the bare minimum (d’oh). I started hunting for a flat in early 2013 and had saved up about £20,000 as a deposit (I always keep a bit of cash in reserve as a buffer).

When I found a lovely flat in an area I liked, I went to the banks to get a mortgage. Turns out they were willing to lend a 23 year old guy £150,000…! That was 5x my salary if you’re keeping score. That actually scared the crap out of me. I am very debt adverse as a rule. Oh, and I still had a year left on my car loan, but to get the mortgage I was required to pay it off, argh! I had to throw my savings buffer at the car and at all the related fees that come with buying a property.

Home (flat) ownership! (mid 2013 – mid 2015)

It was a nice flat, but not this nice! (credit)

Start Net Worth: -£130,000 (no car loan, £20k equity, £150k mortgage)
End Net Worth: -£33,350 (£92k equity, £138k mortgage, £12k cash, £5k credit cards)

I had just gotten debt free and then I got a huge mortgage. Oops. According to my spreadsheet of the time I was paying the following major costs a month:

  • Mortgage: £627
  • Council Tax: £85
  • Utilities: £66
  • Fuel: £50 (work covered most of it though)
  • Food: £100

My salary had grown to around £36,000 though which was nice. I also discovered that the bank I took the mortgage from allowed you to overpay by £500 a month with no penalty. I had yet to discover investing, Monevator or the FIRE movement then, else I might have put my money into some global trackers and reaped the rewards! Ah well.

Instead I over paid my mortgage by ~£5,000 a year and brought that crazy 5x salary multiple down to a much more reasonable number. I remember sleeping better when it dipped under 4x salary. My flat also jumped up in value apparently, as I started tracking my end-of-month numbers and I have the equity value as £92k! Also, amazingly, I think I was achieving about a 50% savings rate back then. Win!

A note about Net Worth and my spreadsheet

From this point onwards, around August 2015, my spreadsheet started recording the values of various assets and debts on an end-of-month basis, so the numbers should be pretty accurate from here on out. I calculate Net Worth as:

Total of all assets (except pension) minus all debts = Net Worth value

Why don’t I include pensions? Because I never thought to actually keep track of the them until the beginning of 2019… argh! Stupid boy. I probably figured they weren’t worth thinking about until I was much older. I did start taking notice in 2018 but still didn’t track them, and I have no idea what was in them before then, so you’ll see a big spike starting 2019. Anyway…

Assets include: cash, equity, ISAs, pensions (after 2018), never my car
Debts include: credit cards (even if they’re work expenses), loans, mortgages

A history of my net worth from August 2015 – January 2020 so far – orange is the addition of pensions to the net worth calculations (click to enlarge)

Starting to track things (mid-2015 – 2016)

End of 2015 Net Worth: -£29,500 (£93k equity, £136k mortgage)

I continued to work hard at my job and was up to about £38k salary. Not factored in my spreadsheet are the various bonuses I received twice a year – I don’t think they were massive sums or anything but they would have been chucked at the mortgage or saved in cash back then.

The year of the job change (2016)

End of 2016 Net Worth: £13,000 (£110k equity, £119k mortgage, £11k S&S ISA)

I had by now been at my job for nearly 5 years and was looking for a change. I was getting a little bored of being stuck on the same client for over a year and the prospects of getting a new one seemed slim – I had a very niche skill set at the company and they refused to let me train up anyone else in what I did. I hunted around for a new job.

I eventually landed a job with a massive salary increase to £63,000(!). I was apparently being underpaid at my old job and never realised it! With my (pre-tax) salary bump of 65%(!) I was set to really super charge my savings rate! My spreadsheet shows that my outgoings had actually dropped quite a bit for my flat, as all those mortgage over payments meant I qualified for lower rates as well. Expenses a month were:

  • Mortgage: £493
  • Council Tax: £92
  • Utilities: £77
  • Fuel: £100 (work still covered most of this)
  • Food: £125

I had also finally discovered investing and started building up a Stocks & Shares ISA, slowly drip feeding in about £1k a month to test the waters. My new employer offered a 5% match on their pension and I started contributing 15% of my salary into it (the max allowed at the time). My spreadsheet shows a 76% savings rate for 2016!

An engagement, a house, a TV and a cat (2017)

End of 2017 Net Worth: £36,500 (£165k equity, £196k mortgage, £33k ISA)

I asked my girlfriend of the past few years to marry me and she said yes! We both ended up selling our flats (mine in a commuter town in the south east, hers in London) and bought our current home in a leafy suburb of London. I stayed with my parents for a couple of months while the purchase went through, which is why my net worth sky rocketed for a couple of months then drops to nearly nothing on the above chart. This year I also achieved a raise and my salary grew to about £68,000, after helping deliver a particular gruelling project which was on fire for most of the year…

From this point on, we shared all household costs between us 50/50 but the below numbers are the half I paid. The numbers are a bit higher than when I was living in my flat:

  • Mortgage: £745
  • Council Tax: £83
  • Utilities: £50
  • Fuel: £100 (work still covered most of this)
  • Food: £100
  • TV Loan: £150 (bah – it was 0% interest at least)

I splurged out on a shiny new 4K OLED TV which is still awesome for cinema nights, but it was a really stupid purchase… sigh. We also adopted a cat from a shelter as it was one of my wife’s dreams to have one – she is adorable and a pain in the butt (the cat, not the wife).

Ploughing on, a wedding and a honeymoon (2018)

You only get one honeymoon, make it a good one! (credit)

End of 2018 Net Worth: £87,800 (£192k equity, £170k mortgage, £50k ISA)

I got married! Woo! With my wife and I’s combined salary we started overpaying the mortgage as much as possible while filling up our ISAs to the £20k limit each year. We then spent the winter in Hawaii exploring the islands and generally having a good time! My salary rose quite a bit this year as well due to good project performance.

Oh, and I finally got my beloved solar panels installed at the end of the year!

Crushing the mortgage and tracking pensions (2019)

2019 Net Worth: £210,000 (£212k equity, £150k mortgage, £53k ISA, £109k pensions)

I finally started tracking my pensions, which account for about half my net worth. Excluding them, my net worth still increased by about £12k, but this was mainly due to throwing a crap load of money at the mortgage to get it down to a reasonable level. My salary again rose due to “exceeding expectations”. I also received a large bonus which was 100% put into my pension (lest I be tempted to spend it). You’ll also notice there is a significant dip around September 2019 – I sold a chunk of my ISA and got a loan to buy the car of my dreams; a Tesla Model 3. It was worth every penny.

I achieved roughly a 77% saving rate in 2018 – but that’s excluding the car purchase, which came from a mixture of savings and a loan. I upped my pension contributions to 20% and they grew almost £35k with contributions and a surge of stock market growth, so it wasn’t all bad. I plan to do a ‘year in review’ at some point to dive into more details on where my spending went and what I managed to save last year.

In summary

Looking back through the years and the numbers, I can see there’s been some lifestyle inflation going on, but that seems mainly to be linked to moving from my small flat to a much bigger house in London. The mortgage is by far my biggest outgoing. We’ve cleared nearly a third of it in the past two years and it’s still bloody huge. Housing in London is ridiculous.

I certainly had some good luck with getting on my graduate program all those years ago, but I’d like to think I returned their chance on me with many years of hard work, late nights and (paid) weekend work. If you deliver what you say you will, when you said you would, people start to notice and will reward you for it.

Excluding the mortgage (and soon to be gone car loan), my annual expenditure on day to day living is a pretty measly £5k a year(!). It definitely helps I get my transport and meals covered by my job most of the week but even at the weekend I don’t really do expensive things. I’m far happier sitting in a pub with my friends and playing board games, or just wandering around town and grabbing a coffee with my wife than anything else.

A good life does not need to be expensive!

TSHE: Solar Panels + 1 year review

Too many of these really messes with your solar panel figures! (credit)

The year 2019 is over and I have received the official numbers on the scoreboard for the first year of The Solar House Experiment (TSHE). Just in case you haven’t read the previous overview post, I installed a 3.6 kW solar array on my house in November 2018. There were then a few additions to the system over the year:

  • April 2019 – I installed a solar diverter that takes excess solar energy and dumps this into our hot water tank, providing ‘free’ hot water
  • September 2019 – I bought an electric car after my poor old Ford Fiesta died rather spectacularly after 9 years of reliable service
  • Late November 2019 – a shiny new 7.7 kW EV charger was installed which has the ability to dump excess solar power into the car, or charge the car rapidly overnight

The total cost for my installed solar panels was £7,566. This included parts and labour, but I went and fished out the original invoice to show how much exactly the panels, inverters and monitoring software individually cost and what the labour charge was. Please free feel to use this as a comparison if you decide to get your own panels installed in the future!

Solar panel choices and micro-inverters

Solar Panel choice: Panasonic 330W HIT N330
Price per Panel: ~£225 (including 5% VAT)
Total for 11 Panels: £2,478

Due to space constraints on our house, I went for the Panasonic 330W panels. At the time of purchase they were one of the highest wattage panels in the ‘normal’ panel size. With a claimed efficiency of >19% they were also some of the most efficient, though I imagine the panel technology has gotten even better since 2018. For reference, your ‘average’ mass produced panel was closer to 265W and 15% efficiency.

Micro-Inverter choice: Enphase IQ 7+ Micro Inverter
Cost per Micro-Inverter: £105 (including 5% VAT)
Total for 11 Micro-Inverters: £1,155

There are generally two types of inverters used with solar panels: string and micro. String inverters can connect multiple panels at once and are thus cheaper, however, their drawback is that they can only convert power equal to the worst performing panel in the string. If one of your, say, eight panels has a shading issue, then the rest of the panels in the array could only output the same amount of power as that shaded panel.
Micro-inverters are attached in a 1:1 ratio (one inverter per panel). This allows each panel to produce the absolute maximum possible and feed it into your home/the grid. I had additional reasons to get these as I have 11 panels and some of them are at different angles on the roofs, meaning I’d get sub-par performance otherwise. An additional benefit is I can see the production of solar on a per-panel basis with the monitoring software!

Monitoring Software: Enphase Envoy Enlighten
Cost: £300

This little box sits near your electric fuse box and has a couple of CT clamps attached to it that measure the energy following in from the panels and the input/output of power from and to the grid. The software works very well with the micro-inverters (same company) and provides insights and useful statistical data, some of which I’ll be discussing later in this post! At £300 it’s not cheap but does make sure everything is running smoothly in your system and allows for remote troubleshooting if necessary (which you can disable if you wish / have privacy concerns).

The remaining costs were for some mounting kits to the roof (~£400), an additional fuse box and wiring for my garage (~£200) and labour/setup costs of about £2,800. The company who did my installation weren’t the cheapest but they were the friendliest and answered every question I had with detailed replies – which was a great learning experience for me!

The solar year in review

First let’s look at the yearly graph to see how much solar was generated and consumed:

A summary of solar panel production and house energy consumption for 2019. Blue is production and orange is overall household energy consumption.

There’s quite a bit to unpack from this screenshot and there’s a couple of errors I need to point out as some of the values are slightly off:

  • May 2019 – the CT clamp measuring the power flowing in/out of the house was switched accidentally by my Dad and myself when we were installing the solar diverter and we didn’t catch it till the end of May. My energy bills from May are not much different from April or June, so ignore this.
  • June 2019 – my panels were producing so much solar power, they kept shutting themselves off during peak periods due to overheating. The company who installed the panels very graciously upgraded all the micro-inverters for free and didn’t charge for parts or labour. As you can see in July, they fixed the issue! This does mean my panels didn’t generate about an additional ~200 kW by my reckoning though.
  • September 2019 – The power consumption spikes up massively because I bought an electric car and, on a day I charge it, it easily adds on 30 kW to our daily consumption.

Solar Stats Breakdown

MonthSolar Gen.
House Usage
Used Solar
Solar Used
Monthly usage stats from the solar panels and house consumption.
* denotes estimated values.

So as you can see above, the panels produced 2.75 MEGA Watts (2,755 kW) of carbon-free power to the house and national grid as a whole. Not bad for a first year! With the kinks ironed out now, I think it’s possible they’ll do 3 Mega Watts in 2020! In terms of saving us money on our electricity bills, we’ll get to that in a minute. First let’s compare our 2018 and 2019 usage (removing the electric car for the moment).

House Usage 2018 (kWh)House Usage 2019 (kWh)Electricity Usage DIFF. (kWh)Electricity Usage DIFF. (%)
House electricity consumption years compared.
* denotes that the 2019 figures are excluding the electric car charging, which is quite substantial!

To put that another way, on our normal day to day energy usage, we are using nearly 40% less electricity to power our home a year. Though interestingly, we are only making use of about ~22.5% of the solar power produced to do this. How was the other ~24% of solar power consumed then?

The solar diverter to the rescue

Photo from 9th January 2020 – last year’s total was (682 – 9) = 673 kWh of solar power used!

As you can see from the above photo, the solar diverter (MyEnergi Eddi) device helped drastically boost the solar usage from the house by using 673 kW of solar power. By taking excess energy from the panels when there’s no other electrical loads in the house, we get to enjoy ‘free’ hot water, especially during the summer months. We were able to turn the gas boiler off completely for a while!

As the solar diverter was not installed until late April, there is a chance we might be able to get to 1 Mega Watt (1,000 kW) of hot water heated next year! Last year’s 673 kW of solar energy currently equates to 136.6 kg of co2 not released due to burning natural gas! Fantastic!

Thoughts on solar consumption

I was very unsure how much of the solar power produced we would be able to use on a day to day basis. Our main problem is that when the solar panels are at their most powerful, in the middle of the day, my wife and I are generally at work so we can’t make the best use of the power. The incredibly obvious solution is to get a solar battery but these are very very expensive and currently the payback period is way too long to justify one. At just under £400, the MyEnergi Eddi is an excellent addition to The Solar House Experiment as it allows for the power to be used regardless of who is in the house or what is happening in it. It is completely fit and forget.

That isn’t to say we didn’t make efforts to do things such as use the washing machine, dish washer and oven during peak solar periods where possible but this is not always practical. It was interesting to note that when working from home that the panels, even in winter, would generally power all the computers and equipment I use for my work which was cool!

With the addition of the electric car and its huge battery and my new EV charger (MyEnergi Zappi) I will hopefully be able to increase that solar usage number even further, especially during the summer months. The best solar generation was in July when the panels produced 22 kW of power in one day(!) Our house uses about 3-4 kW on an average day so that is frankly an insane amount of power to use up! That amount would let me add nearly 90 miles of driving range a day to my car, for free!

The money side of things

Finally, let’s discuss what has been the payback on the panels and solar diverter and how long will it take for them to pay for themselves. First, note that the solar diverter is replacing much cheaper natural gas with solar generated electricity, so it’s cost savings are less than they might first appear. For comparison, my unit rates for each are:

Price Per kWh (GAS)Price per kWh (Electricity)
*(4.13p assuming 85% efficient gas boiler)
Current rates for electricity and gas on my tariff

So with no further ado, let’s breakdown the returns from the panels:

Solar ComponentCalculationMoney Earned/Savedco2 Saved (KG)
Feed In Tariffs2755 kW x 6.68p£184.04851.30
Solar Consumption
621 kW (E) x 14.80p£85.70191.89*
Solar Consumption
(Hot Water)
673 kW (G) x 4.13p£27.80136.60*
Breaking down the money saved via the solar panels and solar diverter.
* We cannot double count the generation and consumption, but I’ve provided them as separate numbers

With a total install price of £7,931 (panels + solar diverter), this is equivalent to a yearly return of 3.75%.

This is a little on the low side of what I expected. I was aiming for about a 4.5% return. The missing June solar generation would have been an additional ~£13 of Feed In Tariff payments and I’ve only had the solar diverter installed for two-thirds of the year, so those numbers will definitely improve in 2020. At the current rate of return, I am therefore on track to breaking even in Year 19. I will be doing everything in my power to bring that down to Year 12!

The major difference in 2020 will be that I’m fuelling my electric car with solar power! As you saw above, over half of my solar power is being exported out to the grid at the moment – with the car battery able to soak up loads more of this electricity, I should be able to raise the solar consumption much higher and boost the returns as well. If I’m able to get to a 6% return each year then it will only take the 12 years I want for the payback period.

God I wish solar batteries were cheaper though, it would make everything so much easier!

In summary

I hope this has been an insightful look into installing your own solar array on your house and what the possible payback will look like. The ‘problem’, if you like, with our house is that it is already super efficient and we were already using well below the average electricity usage for a typical household of our size (roughly 120m squared). Like I said previously, on an average day we use between 3-4 kWh, whereas I believe the UK average is closer to 4,800 kWh(!).

People with larger houses (and therefore roofs) can install more panels than we can and can use the much cheaper, if slightly less efficient, versions and make their money back quicker. But we didn’t install all this purely for the financial side of things – we are choosing to use our money to reduce the carbon impact of our home as much as we can. I actually have an upcoming post on how even a small number of panels and a small 2-3 kW battery could drastically reduce your carbon impact, so stay tuned for that.

And with that, we’re done! Please feel free to share with anyone who has questions about getting their own solar panels installed!

Electric Mopeds – making commuting cheap and fun?

The key to a better commute…? (credit)

“Ugh, my commute is killing me! Petrol costs an absolute bomb and I’m spending so much just to get to work and back!”

Xailter’s long suffering friend

After mentioning he should just bike it (until he told me it was legitimately 15 miles each way), I asked him whether he was adverse to riding a motorbike or moped to work. He said sure, but what’s the benefit of them? Well, I said, (in no particular order):

  • They are pretty cheap to buy (compared to a car)
  • VERY cheap to run
  • Have minimal maintenance
  • Insurance is cheap
  • You can skip traffic if you’re okay doing lane overtaking

And best of all, once you do a one day course called the CBT course you can ride an up to 125cc motorbike / moped which can generally do 45-50 mph. The restrictions are that you have to ride with “L” plates and cannot carry passengers and need to renew your CBT every 2 years in the UK.

“Sounds great!” he said and then off he went to look at bikes on autotrader or something.

However, an interesting question came back

“Hey Xailter, have you seen there’s electric ones as well? Are they worth looking at?”

I gave him a blank look and then told him I’d get back to him… but my interest was piqued. Are they any good…? I know all the reasons why electric cars beat the pants off most petrol cars, but does the same logic apply to motorbikes and mopeds? Could I convert another misguided soul to the electric transportation revolution?! The game was afoot!

For this post I researched some popular petrol mopeds and a couple of interesting looking electric mopeds. But I’ll just put this here in bold for all to see:

1. I have not been paid by any company to pick their mopeds for comparison, I picked ones that looked comparable / interesting to me (as in I would consider either one).
2. I have passed a CBT course and did own a 50cc petrol moped for a grand total of 6 months. I am not an experienced rider, please do your own research before buying anything if you’re interested in the below!

Petrol vs. Electric Mopeds – the contestants!

Let’s have a look at the competition below and their respective attributes!

102 KGWeight115 KG
5.2L fuel tankFuel Capacity4.2 kW Lithium-ion Battery
108cc 4-stroke petrol engineEngine3000W Bosch electric motor
120 mpg (real world)Efficiency ~20 miles / kWh
137 miles (real world)Max Range70 miles (Sport)
106 miles (Eco)
9 NmMax Torque138 Nm
50 mphTop Speed46 mph
26g / mileEmissions (co2)0g / mile
£2,399Price£3,196 (with grant)
A comparison of the different attributes between a popular petrol and electric moped

I’ve picked what is apparently one of the most popular commuter petrol mopeds in 2018/19 and pitched it up against one of the most interesting electric mopeds I found in my searches. I would happily use either one if I had any use for a moped these days, but I hope you’ll agree that this should be a fairly equal match-up. I will, however, be rooting for the electric one because I really do think we need to stop burning petrol to get about. This is purely a theoretical discussion as I have not personally ridden either of these mopeds.

In short, however, the Honda has longer range and is cheaper (much like petrol cars vs. electric cars). But I have a sneaking suspicion that over the life of the moped, the electric one would come out cheaper overall. Let’s dive in and see how the costs match up.

Working out the ‘cost per mile’ for fuel

The Honda runs on good old fashioned petrol. I will be using the price of £1.29 a litre as that has been fairly consistently the price of 95 unleaded petrol in my area for months now. Adjust with your own prices below if you wish. The formula to work out cost per mile goes like so:

( Fuel tank capacity X Petrol price per litre ) / Range of vehicle

For our Honda Vision, using the values in the table above we end up with the following:

( 5.2 litres X £1.29 ) / 137 miles = £0.0489/mile or 4.9p/mile

For an electric vehicle, the formula is similar but involves your electricity rate instead:

( Battery capacity X Price per kW ) / Range of vehicle

For myself (I have a very cheap overnight rate for charging an EV), I end up with this result:

( 4.2 kW X £0.05 ) / 70 miles* = £0.003/mile or 0.3p/mile

*I’m assuming the lowest range for this calculation, highest range (106 miles) would be 0.2p/mile

You may notice that 0.3p/mile is quite a bit lower than 4.8p/mile. However! The electric moped costs an additional £797 sterling! That would buy quite a lot of petrol to fuel the normal moped. Therefore what is the cross-over point, or number of miles you would have to ride to equal the costs based on just fuel?

£797 (price difference) / ( £0.049 – £0.003 ) = ~17,326 miles

Therefore, so long as you ride at least roughly 17,000 miles during the lifetime of your ownership of the electric moped, you will at the very least break even. For comparison, my old and pretty fuel efficient Ford Fiesta 2009 achieved an average of 42mpg. The cost per mile worked out to roughly 14p/mile!

The petrol moped would be 3x cheaper to run than my old car, but the electric moped would be nearly 45x cheaper(!).

The electric moped goes in for the kill

My friend does a 30 mile commute (15 miles each way) 5 times a week and his car gets about 35mpg. This is equal to roughly 17p/mile. With some fancy maths, we can work out that his weekly commute is costing him: £25.50 a week or about £112.20 a month (assuming 22 working days a month). Let’s calculate the payback period for the above mopeds compared to his car.

VehicleVehicle Cost (£)Cost per MileMonthly Cost (£)Payback Period
Petrol Car0
(already owned)
(already owned)
Petrol Moped2,3994.9p32.34~30 months
Electric Moped3,1960.3p1.98 (!)~29 months
A comparison of payback periods between the mopeds and the car

It’s amazing how close the payback periods are actually – I was expecting the higher cost of the electric moped to cause it to take longer to earn its keep. But it’s dead close! Of course, after the payback period of ~30 months, the electric moped runs away from the petrol one with it’s lower ongoing costs. It’s hard to beat £2 a month of fuel costs!

A look at the more interesting features

The NIU N-GT has two 2.1 kWh removable batteries and can operate on only one! (credit)

What really caught my eye on the NIU N-GT was actually the above. Removable batteries. Whenever I read about electric vehicles on more mainstream news websites, in the comments there is the inevitable cry of “but the batteries will die in 12 months and then you’re screwed!”. Yes, lithium-ion batteries do degrade over time. But it’s not that damn fast. I do acknowledge that it’s a pain to remove batteries from electric cars and replace them (you need to take them to the garage). Well here’s a great solution where you can simply buy a couple of spares and your moped is as good as brand new!

Additionally, you can charge the moped one of two ways. You can plug it in (like the image at the top of this post) or you can remove the batteries and charge them with the supplied charger (you can charge both at once). Most electric mopeds I researched had really slow charging rates – as in they had ~30 mile range but took SIX HOURS to recharge! What the hell is with that crap charge rate?

The NIU N-GT can recharge from 0 to 90% in 3.5 hours and has over double the range. That’s a pretty big difference, so kudos to them.

Charge at home and the office?

Due to the removable batteries, this is an electric vehicle you can own if you live in a flat or don’t otherwise have access to a drive. You can also potentially charge for free at work! Remove a battery or two (they weigh 11 KG each apparently, be careful) and find an empty electrical socket (and get permission from your employer) and you’re commuting for free!

If my employer was handing out free petrol I would certainly be taking advantage of that.

And I have to add this, because I’m me, but if you have solar panels you would also be able to top up the batteries at the weekend potentially for ‘free’. Try and create your own petrol at home and see how that goes!

Miscellaneous features

The dash looks cool too! (credit)

I didn’t know where to put this other stuff, but here’s some other interesting features I liked the look of on the NIU N-GT:

  • Has an app that let’s you view stats and battery charge
  • Moped has GPS and alerts if it’s moved
  • Over the air updates – just like a Tesla!
  • The batteries seem to have a slew of charging safety features
  • Regen braking – increases range by converting braking energy to the battery
  • A strong front LED light to make yourself visible
  • It has a USB port so you can charge your phone on the go!

Wrapping up

I’m honestly disappointed I don’t have a need for an electric moped. If I had a regular commute that was <40 miles and didn’t involve motorway driving, I would probably have tried to purchase one of these things already. They really have come a long way in the past few years, and as battery technology improves I think they will become ever more popular to own and ride for the commuter looking to reduce their outgoings.

Add on the fact that, in London, a moped (either of the above models) doesn’t have to pay:

And you may see why it’s time to get commuting on the moped!

Time to share this post with my friend and see what he thinks about it all.