Power to the people: Generating your own electricity could make you money

Could your own mini power station be the answer to going commendably green? The Government thinks so, with feed-in-tariffs (FiTs) that came into effect on April 1.

These provide a tax-free, index-linked income for anyone generating electricity for their house, from the likes of solar PV (photovoltaic) panels or mini-wind turbines.

In addition, if re-elected, Labour aims to introduce new legislation for ‘green loans’ linked to properties, so that should you move before the installation pays for itself, you don’t take the cost of solar panels and wind turbines with you.

Going green: Feed-in-tariffs provide a tax-free, index-linked income for anyone generating electricity for their house

Going green: Feed-in-tariffs provide a tax-free, index-linked income for anyone generating electricity for their house

The current government plan is for 750,000 properties to have installed home generation systems by 2020. But is it worth it?

It estimates that with an average 10ft x 10ft area of panels, costing about £12,500, you could earn about £900 a year, plus the savings you would make on your electricity bill.

But this total is subject to what kind of panel you get and your location. The tariff pays 41.3p per unit (kWh) and an extra 3p per unit on top for electricity sold back to the grid.

The system is also in part being promoted as a kind of savings plan — offering a better-than-savings interest rate on your initial outlay, however the interest applies only for the lifetime of the system, until the promised advantageous green loan system is in place or home-buyers accept that eco-generation add value onto the house.

Alexander Creed, a partner and property consultant with Strutt & Parker, advises owners of the kind of country homes that will in theory have the space and money to adopt a green generating scheme. He says: ‘People are interested, but wary.

‘We looked at a number of schemes for houses and most are costly; between £10,000 and £20,000.

Rather than just raising the house price, ‘it is more that people will get used to the technologies and say, “Hang on, that house doesn’t have it,” as they would with a home without central heating today.’

John Hill, of solar specialist JHS Power Solutions, reports a significant increase in new inquiries. Unfortunately, he says: ‘There is a shortage of panels. The Germans — where the market is far bigger — have bought up lots of stock to beat a government deadline there.’

So anyone wanting to install a system can expect to wait longer than usual. Any installer must be MCS (Microgeneration Certification Scheme) registered in order to be able to qualify the owner for FiTs.

Caroline Series, a professor at Warwick University, is happy with the solar panels she installed through JHS at her three-bedroom Victorian terrace in Kenilworth.

Because she installed them after July 2009, she benefits from now-defunct grants (£2,500) and the feed-in tariff. The cost of her installation was £13,747.

‘I wanted something aesthetic and with the feed-in tariff, it’s not a bad investment.’

She is still waiting to see how the system performs over a year — ‘We’ve been through the winter and I’ve generated 400 kWh (or 400 units, worth £165 on FiT).

You should research the type of panels you need in detail, she advises. ‘I think it will generate three-quarters of my use and pay for itself in ten to 12 years.’

In Caroline’s case, the installation is guaranteed for five years, the panels for 20. It is important to check the guarantee on the inverter, an integral part of the system that can need replacing.

The system did not add anything to her insurance costs and she didn’t need planning permission — but it is important to check this.

One disappointment; she’d hoped to be sitting pretty during power cuts, but if the electricity goes off, her panels don’t work either.

Energy Saving Trust: 0800 512 012, energysavingtrust.org.uk). JHS Power Solutions: 0845 302 4779, jhspowersolutions.co.uk

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