The Main Facts to Consider When Deciding Whether to Generate Energy at Home

With more and more householders now deciding to generate their own electricity at home, this is a good time to weigh up the facts of the matter.

While adding the likes of solar panels or a wind turbine for domestic use is regarded as being fairly expensive, there are some important points we need to consider about the cost and ongoing benefits before seeing whether it is worthwhile or not. The key to working out how beneficial home energy generation could be comes with the fine points of the UK’s FIT tariff payments, as well as with the initial cost. The following is a breakdown of the main factors.

The Initial Cost

There is no getting away from the fact that setting up a system to produce your home’s energy is relatively expensive. Generally speaking, costs have fallen in recent years. This means that as well as a lower initial outlay, this sort of system now takes less time to pay for itself. A solar panel set up could cost you as little as £6,000 these days. After seeing how much it costs to get started, it is now worth considering how long it would take for such a system to pay for itself. There are a few different factors to take into account when working out how long it could take for the savings and benefits to cover the purchase and installation costs. One issue which isn’t as important as you might think is the geographical location of the panels. Studies have shown that the payback time doesn’t vary greatly across the UK, generally hovering around the 9 and a half year mark. The fact that most systems can be expected to last for more than double that period of time makes it clear that the initial cost should be more than paid back over time. The time it takes to pay back the investment for other domestic energy production systems vary more widely, as the effectiveness of wind turbines and hydroelectric methods depend very much upon local environmental factors.

The Ongoing Savings

The previous point might have come as a bit of a surprise to some people. The speed with which a home energy production system can pay for itself is down to a few different factors other than the cost. For a start, there is the month on month energy savings to be made when generating electricity at home. This really comes in two different forms. First of all, there is the simple fact that you don’t have to pay for your electricity when you generate it yourself. In practical terms, it could be that there are times when you consume more than you generate, meaning that you need to buy some energy from the grid. However, the basic idea is that you no longer pay out for energy like you did before. As well as this, your energy company will also pay you a fixed rate for every unit of energy you generate. We also can’t forget the energy companies like npower provide financing under the Green Deal for energy saving products and modifications. This means that it is possible to generate free, clean energy at home and also take advantage of the Green Deal to ensure that you use if effectively.

The Surplus Energy

As if the previous point wasn’t enough, there is also the matter of the excess energy you generate at home. Any surplus electricity is sold back to the grid, generating income for the householder. The rate which this is fixed at under the FIT tariff scheme remains guaranteed for 20 years. Having said that, the rate offered to new members of the scheme can vary, with it recently falling. However, this has to be seen in the context of the falling price of the initial energy generation equipment.

The Environmental Impact

Of vital importance is the fact that generating clean, green energy at home is also great news for the planet. Every house that switches over to this method means a reduction in the amount of carbon dioxide emissions produced and more clean energy pumped into the grid for other people to use as well.

Summary

In the past it was easy to think of solar panel systems and the like as being good for the environment but not so good for the home owner’s bank balance. Nowadays, the tide has turned and we are now in a situation in which this sort of investment is being considered as a viable alternative to putting money into a pension fund. At the end of the day, everyone has to look at the figures and the benefits on offer and decide how it suits their needs. However, what is clear is that the range of Government schemes and incentives around makes this a better time than ever before to at least consider the idea.

Written by John Cooper who runs a home appliances business