Save money and the planet: generate your own power

The latest energy price hike is a good incentive for us all to find alternatives, says James Daley

Last week, British Gas announced it was putting up its prices by another 35 per cent, piling yet more financial misery on families who are already struggling with the burden of rising food prices, higher mortgage costs and sky high petrol prices.

Although there are many straightforward ways to cut your energy bills in the home – keeping the thermostat on a lower setting, for example, or installing insulation – another more radical, environmentally-friendly and increasingly popular way is to generate your own power.

Using the likes of solar panels, biomass heaters, wind turbines or ground-source heat pumps, it's possible to wipe hundreds of pounds off your energy bills each year – and, if you generate enough power, you can ever sell what you don't need back to the National Grid. At the moment, this is still a relatively primitive process. But Oliver Wright of the Energy Retail Association says that once smart meters are rolled out over the next few years, it will become much easier. Smart meters will automatically keep the power company informed about how much energy you're using, as well as how much you're generating – and will help to ensure you get full credit for any micro-generation

Although the initial outlay for most of these technologies is quite high, the Government is offering grants, which can pay for up to 50 per cent of the cost. To qualify, your home has to meet certain energy efficiency standards – such as having full loft and cavity-wall insulation as well as temperature controls. But if you pass these tests, you could receive as much as £2,500 for your project. For more information, and to apply for a grant, visit www.lowcarbonbuildings.org.uk.

Below, we look at the five main options for generating your own power.

Wind turbines

Although Tory leader David Cameron may have a wind turbine attached to the roof of his home in Notting Hill, don't be fooled into thinking that micro-wind power will be suitable for your home. For wind power to be a viable option, you need to live in an area that has an average wind speed of at least 6 metres per second (m/s), below which you won't generate nearly enough power to justify the not inconsiderable cost of installing a turbine.

The Department of Business Enterprise and Regulatory Reform has a useful function on its website (www.berr.gov.uk/energy/sources/renewables/explained/wind/windspeed-database/page27326.html), which allows you to check whether you live in a suitable area. For anyone that was in any doubt that the installation of a turbine at the Cameron residence was anything more than a gimmick, you'll find the proof here. At 10 metres above ground level, the average wind speed in Notting Hill is just 4.8m/s – well below the required level.

Even if you do live in a windy area, however, it's hard to make the numbers stack up for the micro-generation of wind power. A small turbine attached to your roof will cost around £1,500, but the savings are likely to be less than £100 a year – so it could take you a long time to pay back that investment if you don't secure a grant. Tall, stand-alone wind turbines can cost between £11,000 and £19,000 – and although these will generate larger savings, the high cost means it'll be even longer before you've recouped your initial outlay.

Solar

A more popular option is to install solar panels on the roof of your home, from which you can replace some of your electricity, or heat your water. According to the Energy Savings Trust, the average domestic system will set you back between £5,000 and £7,500 – and could save you around £230 on your annual electricity bill. Alternatively, if you choose to use solar panels only to help heat your water, your initial outlay would be slightly smaller – between £3,000 and £5,000 – but savings would also only typically be between £50 and £80 a year.

However, Oliver Wright of the Energy Retail Association says scientists in the US are currently working on a new range of cheaper solar panels, which could cost less than half the currently available systems. Once these hit the mass market, the economics of solar-power generation may be more attractive.

Biomass heaters

Biomass is biological material that can be used for fuel production, such as wood and energy crops. A biomass heater works by burning biomass to heat your home and your water, and, according to the Energy Savings Trust, could save you as much as £550 a year on heating bills. Stand-alone heaters generally cost between £2,000 and £4,000 to install, but they must comply with a number of building regulations, so it's important to check with your local authority that you have the right to build one.

A wood-pellet boiler, which can generate even more heat, costs between £5,000 and £14,000 to set up, but could save you as much as £750 a year on energy bills. Obviously, some of these gains will be offset by the cost of the fuel.

Ground-source heat pumps

The earth a few metres below the ground stays at a constant temperature of 12-degrees centigrade, and by running a system of pipes underneath your garden, it is possible to harness some of this heat. The pipes, which are filled with a mixture of water and antifreeze, are arranged to run in a series of underground loops, heating their contents, which can then be used to heat your home.

The cost of installing one of these systems is between £6,000 and £12,000, but they could help to generate savings of as much as £900 a year.

Hydroelectricity

Finally, if you've got running water on your land, you could consider using its power to generate electricity. Although start-up costs are high – between £5,000 and £25,000 – efficiency levels are very good.

For more information about micro-power generation, visit www.energysavingstrust.org.uk/generate_your_own_energy