How to be more energy efficient

Published:
28 September 2011
Topic:
Guide,News,Gas & Electricity

The latest round of energy price hikes have pushed up the cost of gas and electricity by an average of 17.4% and 10.8% respectively, prompting many of us to look for ways to reduce our bills.

According to figures from MoneySupermarket, consumers who switch to better deals could slash their energy costs by up to 24%, but you can also dramatically reduce your fuel bills by improving your home's energy efficiency.

With even those on the best value plans typically shelling out in the region of £1,000 a year on energy, and with winter just around the corner, now's the perfect time to take action. Here, we take a look at some of energy-saving measures that can save you money...

How can I improve the energy efficiency of my home?

A large percentage of the heat that fires and radiators produce in your home escapes through the roof and walls.

Easy ways to improve energy efficiency therefore include installing loft insulation, which can save you about £140 a year, or cavity wall insulation, which can cut your bills by around £150.

What's more, while there are costs to consider - installing loft insulation, for example, costs around £500 - you can apply for a range of grants to help with this.

The government's CERT scheme pays 100% of the cost of cavity wall and loft insulation for members of a 'Priority Group' made up of households on certain benefits, the over 70s and people on incomes of below £16,190 a year.

But even those on higher incomes may also be able to get grants for between 70% and 80% of the cost of home insulation.

In Scotland, the government has also pledged to offer free home insulation measures to improve energy efficiency to about 200,000 homes.

Even if you do not qualify for government help, gas and electricity suppliers also run separate grant schemes that can cut the cost of home insulation by hundreds of pounds.Check out energysavingtrust.co.uk for more details of the various grants available.

What about home energy production?

The government has committed itself to a target of 15% renewable energy use in all homes by 2020. Consequently, the Department of Energy and Climate Change has introduced a number of schemes offering financial support to households that switch to renewable energy systems such as solar panels.

You can, for example, benefit from Feed In Tariffs (FITs) that are guaranteed by the government for the next 25 years and are also index linked, meaning that they will rise in line with inflation.

Under the FIT scheme, energy suppliers make tax-free payments per KW produced to homeowners who generate their own electricity from renewable energy sources.

You can also get a separate amount for any electricity exported back to the national grid and up to 70% off your energy bills.

Someone with a qualifying solar photovoltaic (PV) system, for example, could get up to 43.3p per KW of energy produced in the first and second years (taking into account this year's increase in the Retail Prices Index).

There is the cost of buying an installing technology of this kind to bear in mind, of course. Installing a solar PV system costs between £5,999 and £14,999, according to Green Homes Energy Care.

However, you can slash this to as little as £500 by buying through Green Homes Energy Care's scheme under which the installer recoups the FIT payments, but you still benefit from free electricity.

There is also the new Renewable Heat Incentives (RHIs) scheme to consider.

Under its terms, replacing a fossil fuel heating system with a renewable energy source could typically earn you about £375 per year, depending on the amount of heat generated.

And you can currently apply for so-called Premium Payments to help with the initial costs, ranging from up to £950 for a wood pellet or other biomass boiler to £300 for a solar thermal unit - that's about 10% of the overall cost.

Competition for the first payments - due to start being paid in October 2012 - is expected to be fierce, though.

This is largely because those households that qualify will automatically be accepted for the second phase, being introduced next year, under which the Government will pay households a tariff every quarter for up to 15 years.

The exact level of the tariff - or amount per KW - to be paid will be announced later this year

 However, the original Government consultation talked about a 9p per KW tariff for domestic users and a similar Government RHI scheme for commercial buildings sets the quarterly tariff rate for wood pellets, for example, at 7.6p per KW.

A reasonable assumption for the likely level for the domestic wood pellet tariff is therefore 6p per KW. On that basis, someone with a four-bedroom home should be able to make savings of between £15,000 and £20,000 over 15 years by replacing a fossil fuel system with a wood pellet heater.

Please note: Any rates or deals mentioned in this article were available at the time of writing.

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