Generate your own free electricity

Like many people I love the idea of being able to generate my own electricity using the freely available wind and sun. Solar panels and wind turbines are great, with one exception, they cost a lot of money and the financial payback runs into many years. So for once the government did something sensible, they introduced a Feed In Tariff (FITs) scheme that offers enhanced payments for owners of renewable energy generation equipment such as solar panels, wind turbines and hydro power. Before the FITs a typical payback on solar panels could take as long as a massive 30 years, now you can expect to recover your money within around 10 years. See the video below where John Walsh from E.ON explains the FITs in more detail.

So while the FITs help reduce the time taken to recover your costs, there is still a major problem which is that you still need to find the money up front to buy the equipment, solar panels for a typical house will set you back somewhere around £10,000 for an average house and a wind turbine of a decent size could cost you up to an eye watering £75,000. I'll save the subject of small wind turbines for domestic properties for another post, but for now lets just say that small wind turbines in urban areas just don't work. So when I talk about wind turbines I'm referring to 10-15kW turbines that farmers or anyone with a decent amount of land might look to install.

So if you have access to spare cash and don't mind locking it into buying the equipment, everything is great - you get to generate your own electricity, be the green envy of your neighbours and as the icing on the cake get a tax free return of somewhere around 6-8%.

So what happens if you want to be green but don't have the cash? Or you have the cash but don't trust the government not to change the rules on the FITs over the 25 years that they run? Or would prefer to keep the money in savings where you can easily get at it for a rainy day? Or, quite simply you may be able to get a better return from your cash by investing it elsewhere, expanding your business for example or even investing in the stock market or your personal pension.

Green minded entrepreneurs spotted that there is a growing market for what has become known as 'rent a roof'. The business model is quite simple, they go to the bank and borrow around £13m (this is how much a company called A Shade Greener borrowed), they use that money to buy solar panels which they install on peoples roofs and pay back the bank with the money from the FITs. At some point in the future they will have repaid the loan (probably around 10 years) after which they start to make a profit.

So if you rent your roof whats in it for you? Well, if for example you live in a average semi you might save somewhere around £100 - £150 a year off your electric bill. You don't have to find the up front cash and you don't have to worry about expensive repair bills if any of the equipment fails. You will need to sign a 25 year contract with the rent a roof company so before signing up think about if you are likely to move in the near future or if you might want to do any building work, in particular a loft conversion.

So what about wind turbines? Well if you have a typical house in an urban area then forget it, wind turbines just don't work in cities and towns. If you have some land, maybe a farm or a couple of acres out in the country then a wind turbine from Solarventus could be just the ticket. It looks like they use the Gaia wind turbine which is an expensive but well built turbine. With a wind turbine at that sort of size you could probably save somewhere around £1,000 - £2,000 a year on your electric bill.

So everyone can now do their bit to get the UK greener and help stop our ever increasing imports of energy. If you live in a town or urban area with a south facing roof then solar panels will be a great choice. If you have the money spare then you can buy them yourself, if not then a company such as A Shade Greener may be able to help. Out in the country and got some land? Then a wind turbine could be the way to go.

We recommend visiting the Energy Saving Trust website for further information on energy saving, the Feed In Tariffs and some impartial advice on the free schemes.