Renewable Energy is not just about saving the planet, although it will certainly help, nowadays it is as much about “return on investment” calculations and generating alternative, and guaranteed, income streams.
Renewables have become an investment opportunity because of the Government’s introduction of “Feed in Tariffs” (FiT), which are paid by the energy providers to you for generating Green Energy. Feed in tariffs are paid to you for each unit of electricity your renewable system generates; they are paid at a fixed rate for 20 years, and they are index linked.
Domestic Solar PV (solar photovoltaic)
Solar PV panels generate electricity from sunlight by a clever silicone module. A typical domestic installation of 16 panels, costing around £7,000 to install, will generate a FiT income of £474 per annum and free electric of £252. The FiT is index linked and guaranteed for 20 years and the free electric will only become more valuable as energy costs continue to rise. So an income and savings of £726 on an investment of £7,000 is a simple return of 10.5% and it is tax free.
Commercial Solar PV
The same rules apply to larger commercial systems, an index linked income for 20 years and free electric. A 200 panel commercial array would produce and income of around £5, 172 and free electric of £4267, so a typical cost of £70,000 would give you a simple return on invest of 14.9%
Small and Medium Wind Turbines
If you have the right location a wind turbine might be the answer, the same basic rules apply although planning has to be overcome. A 6kw turbine on a 12 metre mast would cost approximately £33,000 and give an income of £2, 548 and free electric of £1, 681, but they do need an annual service at £400, so a simple return on invest of 15%
A 60kW turbine on a 22 metre mast would need an investment of around £370,000 but you would expect an income of £60,000 after running costs even if you couldn’t use the electric, that’s an 18% return. Where can you get returns like that today?And its Government backed for 20 year and index linked! And energy cost will continue to rise!
Are there any downsides?
Good solar systems are virtually trouble free if installed correctly, and you have to like the look of product on your property, but you are showing the world that you are doing your bit to save it, and that you have made a shrewd investment.
With turbines there is more to go wrong, and they do produce a slight noise in most wind conditions.
Make sure you chose your turbine wisely and have it installed by a company you know will look after you.
Although renewable energy is a terrific investment, it is long term, as it is not possible to get your capital back if your circumstances change, but if you have funds languishing at 2% or 3% interest you should seriously consider “saving the planet” and improving your income for the next 20 years.
What if I don’t have spare cash?
There are alternatives. There are lenders who will fund renewable projects, currently at about 6.5% so it is still viable, or there are investment companies who will rent your site for either solar or turbine installations and you will get free electric.
Hadrian Electrical Engineering provides a free of charge, no obligation, site evaluation survey, which provides you with a ‘cost/payback/returns’ estimate for all the above systems as well as guidance on system sizing and planning issues. Give us a ring on 01434 602402 to arrange this free survey