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Oil prices continue to bounce about with every speech and social media post put out by the Iran war’s belligerents [writes The Frugalist, who has the reins this weekend].
But the overall trend for prices is upwards. And that means increasing financial pressure on energy-intensive businesses and the electricity grid more generally.
Especially when you consider that the Strait of Hormuz normally carries a fifth of liquefied natural gas (LNG) exports.
Think back to 2022 – LNG was cited as a key solution to the challenge of weaning off Russian gas imports.
Oh dear!
President Trump has praised the UAE’s decision this week to leave OPEC. But whatever happens with the oil cartel is unlikely to reverse the prices for gas and oil while conflict continues in Ukraine and Iran.
Besides, we have known for a long time that with growing global energy demand, a limited supply, and the increasing expense of extraction, fossil fuel prices would likely increase.
Okay, there might be the occasional reprieve. (More fracking, anyone?) But oil is never going to be cheap and abundant again.
Heating hurts
The situation is worse if you rely on physical fuel delivery to heat your home.
The UK government can’t fix the geopolitical issues, but at least it has expanded its Boiler Upgrade Scheme. This will now provide up to £9,000 in grants for households that use heating oil or liquefied petroleum gas to switch to heat pumps. This is separate from the direct funding for affected households that comes via local authorities.
How many such houses will prove suitable for getting the best out of a heat pump is a different question, however.
Can solar rescue us?
I’ve looked into solar myself on multiple occasions. Not because it makes a compelling alternative to investing in a global ETF, but because I like the principle of DIY-ing my own energy production. Saving on energy bills would justify the expenditure.
Now, solar panels have been plummeting in price. But installation costs are still a problem.
In fact when it comes to my own house, the scaffolding is so complex that I’d be several thousand pounds down before I’d even bought a panel.
Germany has led the way with a cheap and cheerful alternative – plug-in solar, where panels are plugged into an inverter and then directly into your mains. The electricity generated then flows to where it’s needed, without electricians, dedicated circuits, or formal declarations.
You’re free to put such panels on fences, shed roofs, or even to mount them on a wooden frame. (I can foresee my DIY skills and a large bucket of nails coming in handy again!)
The media has been getting into the question of whether plug-in solar is economically worthwhile.
But other, more thorny issues remain. Such as whether the panels present a safety risk – especially given British electrics have oddities that other countries haven’t had to worry about.
Solar flares
I’ve noticed more than a few people seem to have decided to jump straight in with plug-in solar, even before government legalisation. Many vendors report they’ve sold out.
This may prove premature. I expect home insurers will be paying especially close attention to fires with large claims attached to see if unapproved inverters were plugged into the mains.
Also, if plug-in solar is only an option for homeowners and not the rental sector, then that will limit their beneficial impact. Figuring out a balance between making plug-in solar safe, not exposing landlords to liability, and enabling renters to install their own panels will be tricky. And I expect the government will still get some flak for not doing it quickly or safely enough.
Admittedly, fitting a few hundred watts of solar panels to hundreds of thousands – even millions – more homes won’t instantly get us off fossil fuels.
But even if it looks like plug-in solar will take a few years to pay off financially, as soon as the standards are approved and the safety aspects sorted, I’ll be at the front of the supermarket queue for my kit.
Hopefully, just in time to pair some panels with the summer BBQ.
On that note, I hope you have a great Saturday!
From Monevator
Handbags at the dawn of the AI era – Monevator
Cash total returns: a long run index for DIY investors – Monevator
From the archive-ator: Reasons to rent a house instead of buying – Monevator
News
Bank of England votes to hold base rate at 3.75% – The Intermediary
High Street sales in biggest drop for more than 40 years… – This Is Money
…with stalwart outlet Claire’s closing 154 stores – This Is Money
Pensions Schemes Bill moves forward with ‘guardrails’ – Pensions Age
Edinburgh Worldwide admits defeat to Saba Capital – City AM
British Airways owner to raise air fares as fuel soars – This Is Money
BP profits more than double as Iran war sends oil prices higher – BBC
UAE quits OPEC – Sherwood
Savers still love their cash ISAs – Simon French via X
Products and services
Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.
NS&I’s new fixed-rate savings accounts pay up to 4.5% – M.S.E.
Mortgage borrowers ‘left in limbo’ by Bank Rate freeze – Moneyfacts
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley
What life insurance actually costs – Which
Middle East crisis: will your travel insurer cover you? – M.S.E.
Get up to £200 cashback when you open an Interactive Investor SIPP. Terms and fees apply, affiliate link – Interactive Investor
Saving with eSIMS for travelling abroad – Be Clever With Your Cash
What’s happening to house prices? – Which
Grade II-listed homes in England, in pictures – Guardian
Comment and opinion
Banning payment for order flow is an EU blunder the UK shouldn’t repeat – City AM
Why private equity is likely in worse shape than private credit – Verdad
Diversifying during periods of positive stock-bond correlation – 7 Circles
Politics could push UK bond yields higher… – ING
…or has the gilt sell-off already gone too far? – JP Morgan
Naughty corner: Active antics
Are investors over-valuing Corning’s AI infrastructure business? – Morningstar
Seagate’s value continues to soar – Yahoo Finance
Tech stocks suffer after reports that OpenAI missed key targets – Sherwood
Will emerging market pioneer Mark Mobius be vindicated? – Morningstar
Prediction markets racing to ban insider trading – Fortune
The 15 stocks that returned the most over the past decade – Morningstar
Running away with it mini-special
How the two hour marathon barrier was broken – The Conversation
Adidas shares rise in wake of London Marathon sensation… – This Is Money
…though investors need to watch out for Chinese competitors – BBC
Kindle book bargains
Antifragile by Nassim Taleb – £0.99 on Kindle
The Big Short by Michael Lewis – £0.99 on Kindle
The Art of Statistics by David Spiegelhalter – £0.99 on Kindle
Not the End of the World by Hannah Ritchie – £0.99 on Kindle
Or pick up one of the all-time great investing classics – Monevator shop
Environmental factors
Air pollution during pregnancy may harm babies – Guardian
European sea temperatures reach highest levels recorded – Guardian
UK supermarkets to start selling plug-in solar panels… – The Independent
…but legislation might be needed to ensure renters can benefit – i Paper
Plug-in hybrid cars can be surprisingly expensive to run – This Is Money
US is making Europe pay for its half-hearted electrification… – Geoeconomic
…though the UK broke its solar generation record again – PV Magazine
Robot overlord roundup
White House memo claims mass AI theft by Chinese firms… – BBC
…while China blocks Meta’s purchase of Chinese AI firm – Reuters
Microsoft’s GitHub shifts to metered AI billing amid cost crisis – The Register
Can AI predict fund managers’ trades? – K.O.I.
Microsoft and OpenAI loosen ties – Spyglass
Switching AI vendors at scale isn’t easy – The Register
Not at the dinner table
US charges ex-FBI director James Comey for an Instagram post – Guardian
King Charles’ subtle but striking warning to America – CNN
How Péter Magyar toppled Viktor Orbán – The Bulwark
Hungary’s business elite pivots away vanquished PM [Paywall] – FT
Russian super yachts skip the Hormuz blockade – BBC
Off our beat
Electronic warfare is sowing confusion in cockpits – CNN
Australian teens say social media ban is not working – Fortune
What does the Zoological Society of London do? – Guardian
The gamers who lost money on Peter Molyneux’s last project – Ars Technica
Why low-frequency sound might explain haunted houses – Sci News
And finally…
“In most of our decisions, we are not betting against another person. Rather, we are betting against all the future versions of ourselves that we are not choosing.”
– Annie Duke, Thinking in Bets
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> given British electrics have oddities that other countries haven’t had to worry about
Yes, the ring mains system is perverse compared to the star wiring that seems to be more used in Continental systems. But the UK seems exceptionally fearful of electrickery. In Europe you find – shock (see what I did there) horror, light switches in bathrooms. In hotels in the States I found coffee machines in the bathrooms next to the sinks, which I do admit gave me a double take. Fair enough 110V is less than 240V and it’s perhaps balanced about ground but even 55V from the machine onto a wet hand in the sink is enough to spoil your morning. Given US litigiousness, it can’t be a common issue.
The papers aren’t full of dead continental Europeans taken out by their bathroom light switches and I vaguely recall sockets too, same for the Americans.
Anyway, cue all the usual suspects making a hue and cry and saying you have to rewire your house to use plug in solar. Nice little earner, guv, you may as well stick ’em on the roof if you’re going to take that hit. From one of the links in the post
> ‘plug-in’ solar PV systems connected to standard household sockets can cause overheating or otherwise impair the operation of protective devices such as RCDs.
Fair cop on the RCD on the same ring in a ring main system, although in practice I guess people will rig these on their outside sockets which are usually on a spur, and as long as they unplug the grid tie inverter which is hopefully anti-islanding when they want to mow the lawn the will be okay. BS on the overheating, your socket should be able to take full power and the transient to blow a 13A fuse and balcony systems aren’t going to be > 3kW anyway in the midsummer noonday sun. Possibly a case to regulate max power on balcony systems to 2kW. Peak midsummer insolation in London is ~ 5kWh/m^2 of which you’ll be extremely lucky to get a fifth in electrical power, so two square metres will be easily within spec, which happens to be about the size of a normal commonly used rooftop solar panel
The UK needs to grow a pair here, there’s endless capture of the wiring regs to layer extra safety against longer and longer tail risks. This is a country, remember, that thirty years ago required untrained customers to fit a mains plug on appliances and your great grandmother plugged her iron into the lamp circuit. These were things worth stopping. Balcony solar, not so much.
It’s the battery storage I’m scared of, particularly the benighted souls that screw a small car’s worth of LiIon batteries inside the house. I regularly pass a house with a nice Tesla battery screwed outside the house, well done them. Next to the gas meter…