Ripple Energy review
In this Ripple Energy review we explore the benefits of investing in co-owned renewable energy projects to help reduce your electricity bills.
Not every home is suitable for solar – and people that live in flats without roof space are not able to install solar panels. But now, thanks to Ripple Energy, anyone can invest in wind or solar projects to reduce their electricity bills.
How does Ripple Energy work?
- Visit Ripple Energy to get a quote for your home
- Decide how much of your electricity you want to buy from Ripple, which will determine how much of the solar park you own, the cost of your investment and your predicted savings
- Create your Ripple account, choose whether to pay all at once or via monthly installments and make your initial payment to become a co-owner of the solar park
- Ripple build the solar farm and sell the electricity which is generated to your supplier via a Power Purchase Agreement – i.e. at a fixed, low price (in comparison to the standard wholesale price of electricity)
- Your energy company passes on the savings to you as a discount on your bill
- The savings continue for the 40 year life of the solar park and you can track how much energy your share of the solar park has generated through the Ripple Members’ dashboard
You will need to be with, or switch to, one of Ripple’s supply partners, which are E-on and Octopus, but since Octopus currently offer some of the cheapest smart tariffs – and a £50 credit for switching – that’s not a problem.
How much can you save via Ripple Energy?
It’s hard to say exactly how much you will save over the lifetime of your investment because savings are dependent on wholesale electricity prices, which vary over time. Your savings will be the difference between the price Ripple sells the energy to your supplier and the market price.
Ripple’s savings calculator assumes an average member saving of just 6.1p/kWh. But this rate will vary each year according to the price Ripple secures for the PPAs they negotiate with the energy suppliers and the market price of electricity.
Their standard quote, for a home consuming 2,900kWhs of electricity per year, for which they recommend you buy 2,958 Watts of the solar park, is £3,044 which should produce roughly 100% of the electricity you consume, saving you a £288 in the first year (once the solar park is completed in 2025) and £6,816 over the 40 year lifespan of the project. This equates to a 17 year payback. These figures are based on the assumptions of the “extended high” pathway from the latest BEIS figures which are fairly conservative in our opinion.
Ripple has already built 2 wind farms which are co-owned in the same way and the savings have far exceeded their estimates – mainly because electricity prices shot up last year, so the savings rose too. For example, someone who invested £323.37 in the Graig Fartha in 2021 to cover just 10% of their bill would have saved £60 in the first year and £180 in 2022, implying total payback in year 3 and 22 more years of savings (the wind farm contracts only run for 25 years). So that’s an amazing payback period – and very significant savings.
However, as mentioned above, whilst savings will be high in years when the wholesale price of electricity is high, in years when the electricity price is lower the level of savings would be lower too. If you select the ‘low’ estimate for future energy prices on Ripple’s payback calculator the estimated payback period extends to 29 years, which still implies 11 years of savings at ~1.7% pa which is still worthwhile, especially if you also want to help reduce carbon emissions.
Whichever way you look at it you will save money over the duration of the project – and you don’t need to worry about moving house because you can transfer your savings to your new home, or dying because in the event of your death your shares can be inherited by someone else.
If energy prices continue to rise, which seems highly likely as we transition to net zero and the UK needs double, or even triple the amount of electricity we currently consume by 2050 the return on investment from investing in Ripple would be significant.
If wholesale prices remained high and the Ripple Energy savings rate was ~15p you could be looking at a 12% return per annum.
Why else should you invest?
Aside from the financial savings, which we think will exceed Ripple’s estimates, investing in solar and wind parks is an obvious way to do more to reduce UK carbon emissions. Investing your money will help brings these renewable energy sources online quicker, will create green jobs and will also help prove that this groundbreaking model works. Perhaps then the government might start to take notice and approve the Local Electricity Bill to make it easier for other community energy projects to sell the energy they generate to local consumers at a fair price.
Our conclusion – Ripple Energy review:
Ripple Energy is trailblazing a new model for the public ownership of renewable energy assets which offers significant savings over the long term, as well as supporting carbon reduction. Just a few hundred pounds will cover ~10% of your consumption and will help stabilise your electricity bill over the long term.
Further details:
There is a lot of innovation behind the scenes to make Ripple’s projects viable. They have an extensive FAQ section which answers a lot of questions but as part of our Ripple Energy review Smart Home Energy contacted Ripple directly to dig into some of the details which aren’t covered in the FAQ, which our more analytical readers might be wondering about:
To start with we wanted to know how their model accommodates the reduction in energy production as the PV degrades over time because in year 25 the panels will be producing much less than in year 1. Ripple replied:
“Yes the figures provided take into account a small amount of degradation and reflect the yield we expect to see over the lifespan of the project.”
We also asked, why are they aiming to pay back part of the share capital each year? And why does this happen at different rates for wind and solar farms? (For wind farms, this will tend to be 5% per year, and 3% for solar parks) Ripple replied:
“The share capital is gradually repaid to ensure the value of share capital broadly reflects the actual value of the solar park (which gradually reduces over its lifetime). The value of the share withdrawals forms part of member savings. Solar and wind are different because the lifespans of the projects are different.”
This makes a lot of sense, because presumably it will then be easier to wind down the co-ops at the end of the projects.
We also asked if any other supply partners are likely to come on board other than E-On and Octopus? Ripple replied:
“Yes we are looking to bring on other suppliers.”
Not great detail there! But promising…
What are the project’s predicted operating costs? Ripple replied:
“2p/kWh”
This is good to hear because it is a reasonable amount for running a solar farm so we can assume the operating costs are easily covered in their model and there should not be any nasty surprises for investors.
Does it make any difference if a customer is on a TOU, or dynamic tariff? Ripple replied:
“No, they can be on any tariff with our supply partners – their savings are simply based on how much their share of the project generates.”
Good news here too!
Are there more Ripple projects (wind or solar) in the pipeline? Ripple replied:
“Yes. We are looking at both wind and solar for future projects and are hoping to launch another one this year.”
This is also good news as well which means more savings for potential investors and more UK carbon reductions.
Ripple Energy review – final thoughts:
Overall, we are very impressed by what Ripple Energy is doing and are confident to recommend them as a safe investment.
