I didn’t really appreciate how big a ripoff the UK standing charge on energy, and particularly so on electricity, is until we got the solar installed. It really should be abolished, but alas, after some early noises, Burnham has gone very quiet on this subject.

I have never really paid much attention to the actual make up of our electricity bill up till now, but for the first six weeks after the solar was installed, while waiting for the bureaucracy to be able to export, we were running in a fully self-sufficient mode, drawing no electricity from the grid at all (during the summer months our panels produce 5-6 times the mount of electricity we require), yet we still ended up with an £18 / month ‘electricity’ bill.

Now that we are able to export, we have to produce 5kWh / day to cover the standing charge, which is about the same as our house consumes on a typical day. Our projected annual generation is around 5MWh, which means 36.5% of our electricity generation over the course of the year will be swallowed up by the standing charge, all the while Octopus make 100%-200% profit on the electricity they buy from us! This seems insane.

Perhaps you might think it being petty to complain about £200 a year when I am able to afford rooftop solar, but the numbers show that the standing charge disproportionately penalises low energy consumers, and there is a broad correlation between energy consumption and affluence; abolishing the standing charge and factoring whatever justifiable costs it might cover into the unit price would dramatically reduce bills for people on lower incomes.

My back of the napkin calculations, based on Octopus customer numbers, revenue and OFGEM’s ‘typical’ household consumption suggest that the unit price increase would need to be less than 10p, which would leave everyone using less than 6kWh / day better off, with someone using 3kWh / day seeing 25% reduction in their bill.

While these are very rough numbers, they show, I think, that the impact of the standing charge on fuel poverty is significant enough for a Labour government to care.

As for those of us ‘rich’ folk with rooftop solar, the electricity companies are royally compensated by the profit they make from our export (and, of course, the solar energy we generate is not free to us, but rather pre-paid a decade or more in advance).