How we calculate energy costs – Sero Life Ltd

We use what you tell us about your home to estimate how much energy your home needs now, and how much less it will need as you progress on your pathway. We then investigate energy trends and markets to look at energy prices to estimate how your bills may change over time.

Energy

First we figure out how much gas and electricity your home uses. If you have a Sero BEE then we can measure that energy use directly and give a more accurate answer. If not, then we use survey data to build a granular energy model of your home that includes all energy uses, from heating and hot water to lighting and plug loads.

The only thing we don't include is any electricity used for charging an electric car, as we class that as part of your transport emissions rather than your home emissions. We model your home's energy use at 15 minute intervals so we can accurately predict how much of your solar you can use directly rather than selling back to the grid, and how much you can save by charging your battery when prices are low.

Your energy use will decrease and energy use patterns will change as you progress along your pathway. We use our energy model of your home to estimate the impact of each measure in your pathway on your energy use. If your pathway includes installing solar PV then we estimate how much electricity this will generate and at what time of day, and account for how much of this you will use yourself vs. selling back to the grid. If your pathway also includes a battery then we account for the fact that you will be able to use more of your solar generation yourself and shift some of your energy demand to cheaper/lower carbon times of the day.

Energy Prices

Once we understand how much energy your home uses, we apply estimated future gas and electricity prices to estimate what your energy bills could be. It's easy to know what prices are currently but harder to know what they will do in the future. To give you the best possible estimate of how your bills might change over time we investigate energy trends to produce a price forecast for gas and electricity.

When estimating what your bill will be, we use a fixed tariff while the Government's Energy Price Guarantee applies (until July 2023). After that we use a time-of-use tariff like Octopus Agile, where the price continuously fluctuates throughout the day. If your pathway includes a battery then we account for the fact that you can buy electricity when the price is lower and store it in your battery until you need to use it.

It's important to understand that no-one can accurately predict future energy prices as they are affected by so many unknowns: global politics, climate changes, Government policy, to name just a few. All future energy costs should therefore be considered as estimates of what might happen based on historic trends, expert opinion and what is known about Government policy direction.

How do we forecast prices?

For the next couple of months our prices are based on the Government's Energy Price Guarantee. After that Energy Price Guarantee expires we have assumed that variable rates like Octopus agile will become attractive again so we have gone back to using a variable rate at that point. To estimate what that price may look like at that point we have combined data from: historic Octopus Agile prices, Cornwall insights, Auxelione, and the Active Building Centre. We update our forecasts regularly as new data becomes available. The figures that are used in our modelling are shown in the graphs below.

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