When it comes to making money with renewable resources, without government incentives you have to rely on the savings that you make by not having to rely on your normal energy supplier. However there are now government incentives in place which mean that there are more ways of making money with it. The government has done this because they want to try to avert global warming by encouraging people to use more solar energy and other renewable energy sources.
Saving Money
The fundamental way that you make money with renewable resources, without any government incentives, is by the savings you make on energy bills. So we’ll look at that aspect of it first.
The focus is going to be on solar energy as that is what is most popular in terms of renewable energy. Most people have the necessary conditions to be able to install solar panels as it only requires that you have a roof they can fit on. Actually, the can also be ground mounted so there’s that as well.
When it comes to the actual amount of savings that you can make by using something like solar energy instead of your normal energy supplier, the savings are not actually that big. Although having said that, they’re getting bigger all the time as energy prices rise.
When you are looking at the savings you are going to make by doing something, you also have to consider how much it cost to do it. So in this case, the savings from using solar energy have to be set against a solar installation. In that case they don’t come out that favourably as it would take around 25 years usually to pay off the cost of the installation usually.
It should be no surprise, then, that before the feed in tariff came in to effect, there were not many people who were getting solar installations. Afterwards though, there were many more people getting solar panels, and we will now see why that is.
Feed In Tariffs
The feed in tariff is a government scheme whereby all of the renewable energy that you create with renewable resources such as solar energy, you get paid for. Now it’s important to note that you still get to use this energy, so it is not an exchange. You are just being financially compensated for using renewable energy.
Governments all over the world are introducing feed in tariffs for this purpose because they want to reduce their carbon emissions. Indeed, the UK government has a specific target to make a significant reduction in carbon emissions by the year 2020. The reason for this is that they are concerned about the potential effects of global warming if we keep using fossil fuels as we have been.
By taking the feed in tariff in to account as well then, by how much does this improve the financial incentive for getting solar panels? Well, one way of looking at it is that instead of taking 25 years for you to make enough to equal the cost of the installation, it now only takes around 10 years.
The effect of taking much less time to pay off the cost of the installation, of course, is that it means that you will be able to make much more money. You could have about 15 years of actually making money on the solar energy, for example. And at the same time be guarded from the full effects of rising conventional energy prices.
Renewable Heat Incentive
The renewable heat incentive, which is going to be available soon, works in the same way as the feed in tariff. While the feed in tariff applies to electricity produced with renewable energy though, the renewable heat incentive applies to heat energy that you produce.
This is going to apply to a number of systems. For example heat pumps like the ground source heat pump. You can also get an air source heat pump. It will also apply to solar thermal systems, which use solar energy to heat water. So it’s soon going to be more financially viable to use a solar hot water system as well.
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