How does ‘going green’ impact your bank balance?
Green energy often scares off consumers because it requires an up-front investment. But with energy prices from the “big six” steadily on the rise, more and more homeowners are considering green energy as a viable alternative to fossil fuels. You already know that going green reduces your carbon footprint and helps to protect the environment, but is it really worth the investment? Here we take a closer look at the financial implications of going green.
Green energy tariffs vs standard tariffs
Let’s first examine green energy tariffs. Financially, one of the most promising aspects of signing up for one of these tariffs is that you aren’t likely to see a hike in your energy bills from month to month. Why? Traditionally, the UK has used electricity powered by gas, which is a fossil (non-renewable) fuel. Wholesale gas prices are affected by factors such as natural disasters, war, and market reforms. When the available supply of natural gas diminishes, demand rises, causing you to pay higher monthly costs. Green energy, on the other hand, is fuelled by renewable sources—water, wind, and sunlight—so it won’t be subject to the same price increases and fluctuations.
There is a word of caution about green energy tariffs. In some cases, suppliers that offer these tariffs do not supply you with energy generated from a renewable source. Instead, the supplier matches your demand for green energy by investing in the future of green energy— wind turbines, solar PV panels, etc. Make sure you sign up for a green energy tariff with a company that supplies its energy directly from renewable sources; otherwise, you may be paying for energy that’s not truly “green.”
Generating your own electricity
Making the decision to generate your own electricity from solar panels requires a greater up-front investment. There are a few alternatives to help you offset these costs. The first is to find an installer that will set up the panels for free; in exchange, you’ll enter into a lease agreement with the installer that entitles it to your Feed-In Tariff.
If you can finance the installation of the solar panels yourself via a loan or your personal income, you’ll be able to claim all funds from your Feed-In Tariff. This popular tariff is designed to encourage homeowners to generate their own electricity from solar panels by compensating them for each unit of electricity produced.
No matter which option you choose, you’ll be able to produce roughly 30 to 50% of your own energy with solar panels, thereby drastically cutting your energy bills each month. Over the 25 year lifespan of your panels, your monthly energy savings should be enough to make the investment worth it.
Whether or not you sign up for a green energy tariff or decide to install solar panels, you can cut your monthly energy bills and protect the environment by reducing your consumption. Conduct an energy audit of your home and make adjustments to your daily lifestyle to make sure you’re being responsible with your energy usage.