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Green Energy

If you harness a so-called green or renewable energy such as solar, you could minimise your carbon footprint and save money, too.

Renewable energy

There are various sources of renewable energy. Most of us are familiar with solar panels and wind turbines, but you can also generate power with heat from the earth or bio-fuels made from plants.

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The best option depends on a number of factors including your budget and the suitability of your property. For example, the efficiency of solar panels varies according to the position of your roof. Wind turbines rely on wind speed and airflow, and heat pumps need a certain amount of space, both inside and outside the home.

But whichever technology you choose, you should always first make sure that your home is properly insulated. There's no point generating your own heat if you're going to let it escape into the atmosphere.

Solar panels

Solar panels are one of the most popular types of micro-generation system. Solar PhotoVoltaic (PV) panels basically create electricity using energy from the sun. The electricity can then be used in the home.

There are four types of PV panel and some are more costly - and efficient - than others. But whatever type of panel you choose, the roof should not be overshadowed and should face within 90 degrees of due south.

You should also consider the 'pitch' or angle of your roof. In the UK, experts reckon the ideal pitch is between 30-40 degrees from horizontal (depending on location). If you have a flat or very steep roof, this may influence your thinking.

If you have a flat roof, you can invest in adjustable panels that can be tilted to the optimum angle to receive direct sunlight.

Cut electricity costs

You don't actually need sunshine to generate electricity, only daylight. And a decent system can cut your electricity bill by as much as 40%. However, the cost of installing PV panels is high at about £7,500 for a typical property.

Panels for free

A company might offer to fit your solar panels for free - and it sounds attractive. But you should read the small print of any offer very carefully. The company will normally take the Feed-in Tariff payments (see below) in return for the free installation, so you should understand all the financial implications before you sign on the dotted line.

Solar water heating

Solar water heating systems are usually cheaper to install than solar PV panels, costing about £5,000. Again, they use solar power but instead of generating electricity, the energy from the sun is used to heat hot water in a tank.

Boiler as back-up

Even with a substantial solar panel rig on your roof, you will usually need a boiler or immersion heater as back-up as the solar water heating system cannot usually provide all the necessary hot water during the winter months.

Temperature below ground

Did you know that the temperature below the ground remains at a pretty constant 11 or 12 degrees throughout the year? A ground source heat pump allows you to capture the warmth below the surface and use it to heat your home.

The heat is extracted from the ground through a network of buried pipes, or sometimes vertical boreholes. Liquid is pumped through the pipes to absorb the heat. A compressor then raises the temperature of the fluid, which can be used to heat water in the central heating system.

A ground source heat pump is powered by electricity, so unless your electricity is generated from a sustainable source, you will still have to pay for the power, plus you will still leave a carbon footprint.

However, you will reduce your greenhouse gas emissions with a heat pump and you should be able to make savings on your energy bill, though the amount varies according to the size of your home and the type of heating system you plan to replace.

Ground source heat pumps typically cost about £13,000 to install, and you need a decent-sized garden to accommodate the pipe infrastructure. You should also have space for the pump, which is about the same size as a fridge. The pump generates heat at a lower temperature than a conventional heating system so is best suited to under-floor heating and to gradual/constant rather than sudden demand.

Air source

An air source heat pump is similar to a ground source heat pump except it absorbs heat from the outside air rather than the ground.

You will need space to fit the unit on an outside wall and the typical installation cost is between £6,000 and £10,000. Again the savings vary according to the size of your home and the type of heating system you replace.

Wind turbines

You might think your home is too small for a wind turbine, but small scale turbines can generate electricity for domestic use. The turbine can be mounted on the roof, or you could opt for a pole mounted turbine. But either way, the success depends on the wind speed in your area.

There are various devices on the market to test the local wind speed, so you should do some research before you invest in a turbine. If you decide to go ahead, the installation costs start at about £2,000, but go up to more than £20,000 depending on the size and type of turbine.

Water power

You can use running water to produce electricity and a small hydro system could produce enough energy to power the lights and electrical appliances in the average home. Of course, not every home is suitable as you need a nearby source of water than has enough height and flow.

If you are not connected to the National Grid, hydro-power can be a good source of energy, though it might be better to try to install a hydro system as a community project as it can cost upwards of £25,000.

Wood burners

You can heat a single room, or even a whole house, using a wood-fuelled heating system, also referred to as biomass heating. There are two types of system: a stove burns logs or pellets to warm up a room. It can heat water, too, if a back boiler is fitted. Alternatively, you could consider connecting a wood-fuelled boiler to a central heating and hot water system.

You should expect to pay about £5,000 to install a biomass stove. A wood-fuelled boiler is more expensive, typically between £7,000 and £13,000.    

Biomass heating is a little different from other forms of renewable energy because unlike the sunlight or the wind, the wood is not free. However, you can still make savings. If you replace electric heating with biomass heating, you could save about £600 a year, though the savings will be about £100 if you currently heat the home with gas.

Combined heat and power

Perhaps less familiar to green households is a micro-combined heat and power (CHP) unit, which generates both heat and electricity from the same energy source. Micro-CHP systems are currently powered by mains gas or LPG, which are, of course, fossil fuels. However, micro-CHP units are still considered to be low carbon.

There are there different types of micro-CHP system and they are installed in much the same way as a conventional boiler. The cost is also similar to a standard boiler.

If you want to install a micro-generation system you should use a company that is registered under the Microgeneration Certification Scheme (MCS) and uses MCS-certified products. Otherwise, you might not be eligible for payments under the Feed-in Tariffs and Renewable Heat Incentive.

You also need to check whether you need planning permission, although many domestic generation systems are allowed under 'permitted development' rules. You should also find out whether your household insurance will cover the microgeneration system.

You might be able to get some financial help towards the cost of installing a micro-generation system through the Renewable Heat Incentive (RHI), which has replaced the Renewable Heat Premium Payment (RHPP).

The RHI is a quarterly payment over seven years and the rates vary from 7.3p/kWh or energy generated to 19.2p/kWh, depending on the heat source. You can find out more about RHI here.

Feed-in Tariff

If you generate your own electricity, you might also be eligible for payment under the government's Feed-in Tariff.

The scheme covers most domestic micro-generation systems including solar panels and wind turbines and you will be paid not only for each unit of electricity you generate and use, but also for any unused power you export to the National Grid.

You will receive a set amount according to the type of technology and when the system was installed. The payments are guaranteed for 20 years and index-linked so they will keep pace with inflation.

For example, if you installed solar panels with a capacity of 4kW in October 2013, the generation tariff would be 14.90p/kWh. The export rate is the same for every type of technology at 4.64p/kWh and it is assumed that you export 50% of the electricity you generate.

Register for the scheme

The Feed-in Tariff scheme is administered by Ofgem, but the payments are made by the energy supplier. The Ofgem website carries a list of licensed suppliers, but it includes all of the big energy firms.

You have to register to receive the payments and it's best to complete the process as soon as possible. You will normally need an MCS certificate and, in many cases, an Energy Performance Certificate, which should be sent with a completed application form to your Feed-in Tariff supplier.


*51% consumers, MoneySuperMarket data, December 2014