When Ofgem increased the energy price cap in April 2022, the Guardian claimed it would result in millions of households facing an average bill of £1,971 a year for gas and electricity.

Even with the government’s recent introduction of a “temporary” windfall tax on energy companies, households may face another significant price hike when the cap is increased again in October.

One way you might be able to deal with the skyrocketing cost of energy is to install renewable energy technologies. In many cases these technologies have been around for decades, have a proven track record, and offer the potential to significantly reduce energy costs while helping the planet.

You may need to be careful if you’re considering this, as not all renewable energy technologies will suit every home. So, read on to discover why renewable energy might be good for your finances and the planet, and the pros and cons of five technologies.

Renewable energy could be kinder to the planet and your pocket

Many renewable energy technologies use free natural resources such as wind, sunlight and heat from the ground, so are seen as being more cost-effective once the technology has been installed.

Additionally, you may also be able to sell excess energy produced to the National Grid, which could help offset your gas and electricity bills and reduce costs.

While this might sound as though installing renewable technology is a “no-brainer”, it’s not quite that straightforward. There are advantages and disadvantages that need to be considered when installing them in your home, so let’s now look at the pros and cons of five technologies.

1. Solar panels

Solar panels convert the sun’s rays to electricity, which the household can then use to power their appliances.

Pros – Solar panels could significantly reduce energy costs and typically require little maintenance. They are also a proven and reliable technology, meaning long-term expenditure could be low.

Cons – It is weather-dependent and may only be suitable if you have a south-facing roof. The initial cost of installation could also be high. That said, schemes exist where companies install solar panels on your roof free of charge in exchange for them being able to claim the feed-in tariff payments for the electricity generated.

In return, you can typically power your home with the electricity generated by the panels, which could help reduce your energy bills.

2. Biomass systems

These systems use different biofuels such as ethanol, wood or methane from animal waste to produce electricity or heat buildings.

Pros – Biomass is usually reliable and is a proven technology. Broadly speaking, fuel sources are widely available and could be less expensive than fossil fuels. If you also want to reduce your carbon footprint, it’s worth remembering that these systems could release carbon dioxide emissions. That said, advocates of the technology say emissions are neutralised by the carbon used by trees as they grow, before being turned into fuel.

Cons – It can require a lot of space in the home and initial costs of the technology and installation can be high.

3. Heat pumps

Air source heat pumps warm the home using underfloor heating systems, radiators or air convectors. It is claimed the pumps can produce heat even when the temperature outside is -15 degrees centigrade.

Pros – The systems typically have long lifespans and require little maintenance. This means the long-term costs of running them are lower.

Cons – Like biomass, they are not always seen to be “green”, and installation costs can be high. They could also be difficult to install and may not be suitable for your location.

4. Geothermal energy

Geothermal uses technologies that convert the heat produced inside the earth into electricity or heat for buildings.

Pros – Energy bills can be significantly reduced, and the technology is typically seen as reliable and environmentally friendly. While installations require pipes to be laid underground, the technology that produces the energy or heat does not usually take up a lot of space inside the home.

Cons – Geothermal power plants can only be built in certain locations as they need the earth to be a certain temperature. They can also be expensive to install.

5. Wind turbines

In certain situations, residential wind turbines can provide a practical energy solution for homeowners.

Pros – Turbines create clean energy without producing any emissions. While turbines that are suitable for the home are unlikely to provide all the electricity you need, they could significantly lower your energy bills.

Cons – Initial costs can be high and you may need planning permission. Turbines are also weather-dependent, meaning energy supply could be intermittent and energy storage devices could be expensive. Furthermore, if your neighbours don’t like the look of the turbines, it could cause issues with those around you.

Get in touch

We hope you found this information useful if you are considering renewable energy as a way to reduce your household energy bills. If you would like to discuss other ways you could protect your wealth from the soaring cost of living, please call us on 0800 434 6337. We’d be happy to help.