Auditel Consultant:
Denis Sprague

Cash payouts for homeowners to generate their own electricity

11 Apr 2010 | Filed under: Uncategorized

On April 1^st new feed-in tariffs were introduced to enable households, communities, and businesses to receive cash payouts for generating electricity from renewable energy sources.

The cash payouts are based on the amount of energy generated, regardless of whether it is used, and for the excess energy sold back to the national grid. In addition savings are made due to reduced electricity bills.

So is this an attractive scheme for householders, and are there better ways of spending one’s green pounds?

The new feed-in tariffs are available for Anaerobic Digestion, Hydro, Micro-CHP, Solar PV, and Wind. For the majority of us the most practical source of green energy will be Solar PV panels mounted on our roofs. According to David MacKay (sustainable energy without the hot air) the average space available for Solar PV is 10M².

From a brief search of the web I found a website that was quoting an 8 panel 10.7 M² system fully installed for £9,500. This will produce 1233 KWh of energy per annum. Assuming all the energy generated is used by the household this would generate £445 PA from the generation tariff, and a further £171 saving on electricity. This would equate to a 7% annual return. Over the 25 year life time of the system this would generate an income of total income of £15,400, with a pay-back period of 15 years.

So what about spending the money instead on energy saving measures? Lots of households have GU10 spotlights fitted, typically using 50 watt bulbs. Many people haven’t replaced these with low energy bulbs (compact fluorescents or LED bulbs) because GU10 fittings until recently have not been widely available and are still pretty expensive.

Let’s take an example of a house with 24 x GU10 50W bulbs fitted in the commonly used areas of the house which are turned on for 4 hours a day. We could replace these with 14Watt Compact Fluorescents (I have chosen 14W to ensure they are as bright as possible) for a price of £292. This would save 1,261 KWh of energy PA. The annual savings would be £175 PA. Over the 10 year life time of the bulb it would generate a total income of £1,749 with a payback period of 1 year and 8 months.

So, the conclusion? Make sure you have swapped all your trendy spots for low energy bulbs before you go spending money on Solar PVs. You will be saving the planet the same amount of energy as if you had installed Solar PVs, and saved thousands of pounds as well.

On a more serious note, the feed-in tariffs will encourage investment in larger scale green energy schemes. An example of such a scheme is giant anaerobic digestion plant being built on a West Sussex farm by Barfoots Energy. The AD plant will breakdown 20,000 tonnes of green waste from processing sweetcorn to generate 1.1MW for 8,000 hours a year for an investment of £3.5M. Details can be found in the following link (www.parissmith.co.uk/publications/barfoots-article1.pdf).

I estimate the payback period for the AD plant will be in the region of 3-4 years which is significantly better than for a domestic Solar PV system. For those with sufficient spare funds to invest in domestic green energy generation schemes then perhaps the better solution for both the planet and their pockets would be to invest, if such funds exist, in commercial renewable energy generation.