Renewable Energy- the costs and benefits
The return on your investment for a renewable energy system depends on some basic factors. The most important is the cost of your installation - the more you pay, the longer the payback. This is where grants can make a difference. But the net installation cost of your system isn’t the only thing you need to factor in the equation. For renewable energy heating systems these include:
- What’s your current heating fuel? Payback is much improved if you are currently using expensive oil, electricity or solid fuel for your water heating. Returns are lower if you use cheaper gas for hot water.
- For solar, where do you live is important. Unshaded south facing panels in the sunny south west than poorly sited panels in north-east Scotland.
- For biomass, access to a cost effective high quality fuel is important.
For renewable energy electricity systems important factors include:
- What is your current electricity tariff? The more you pay for your electricity means better returns from your system. And as energy prices increase, your return improves.
- Are you selling your excess electricity and renewable certificates? With sales tariffs of over 10p per kWh available, this can benefit your return.
- How well sited is your system. For example, make sure that your proposed wind turbine site is suitable before proceeding.
Typical returns on investment for renewable energy systems range from 2% for a solar electric PV installation to 15% or more for a basic biomass stove or boiler.
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