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The term "renewable energy" can be a little confusing: what does it actually mean? In simple terms, renewable energy is energy generated from natural resources such as sunlight, wind, rain, tides and geothermal heat (from the air or ground). They are naturally replenished or replaced, hence "renewable".

With no sign that utility companies are reducing energy prices, despite significant falls in the wholesale prices they pay for power and fuels, it is becoming imperative that homeowners look at ways to become more energy efficient. Generating your own heat and power could be the answer to saving energy and money – and now could be the perfect time to invest for the future.

However it's important to recognise that investing in renewable technologies and products should be viewed as part of a wider solution to reduce your carbon footprint and save money – you have to be realistic about the return on the investment. Renewable technologies are unlikely to make you completely self-sufficient and before you commit to the expense of a solar heating system or your own wind turbine there are many other simple and less expensive things that can be done to improve your home's energy performance – these measures are also a pre-requisite for an award of a government grant for your renewable project. They include loft insulation, draught proofing, cavity wall insulation, hot water tank insulation and having energy efficient light bulbs.

There are many different types of renewable energy sources, each offering different 'paybacks', and the following is a brief explanation of the main ones.

Solar hot water heating

Solar thermal panels can provide around 70% of your hot water for free. Water flows through tubes (arranged in panels) mounted on a south-facing roof. The sun warms the water in the pipes to around 60ºC and it is then stored in a hot water cylinder ready for use. In most areas there are now reliable, reputable specialists that can supply and fit solar hot water systems for your home.

DIY Superstores are also now stocking low cost solar heating panel installation kits and homeowners trying to cope with the prevailing high levels of energy prices are bound to be tempted. Installing solar heating kits purchased from a DIY outlet or builder's merchant will be beyond the expertise of all but a minority of highly competent DIYers. So homeowners that buy them from a superstore will get a local tradesman to fit them. But be aware that there are hundreds of "rip off" rogue solar heating installers operating in the UK so only use reputable, reliable tradesmen for such installations and steer well clear of the rip-off tactics of the cowboy installers.

There are Government grants to help with the costs of installing solar water heating technologies – but to be eligible for a grant a homeowner must use a competent installer and certified products.

Cost: Typically £3,000 to £4,000, but Government grants can help.
CO2 saving: 350kg/year.
Potential cost saving: Up to £300 a year, depending on fuel replaced.

Solar photovoltaic (PV) panels

PV panels convert sunlight into clean electricity and a 2.5kWp system (kWp = the peak output in kilowatts) will provide around half a household's electricity needs. PV panels work best on a south facing roof. They only need daylight, so will still generate power on a cloudy day. Standard household appliances can use solar-derived power. Depending on the system, if you generate more power than you use, under the Government's Feed-in Tariff scheme you could be sending the electricity company a bill! See 'Useful Information' for more information on this.

Cost: From £5,000 per kWp, but Government grants can help with outlay.
CO2 saving: 645kg to 1.2 tonnes a year.
Potential cost saving: £250.00 a year.

Wind turbine

Although the technology is improving, roof-mounted turbines are not big enough to generate significant amounts of power, and urban wind speed simply isn't consistent enough – but they are useful for boats, sheds or other outbuildings that need just a small amount of power. You will also require planning permission, which may be difficult to obtain. To make real savings, you'll need a 2.5kW to 6kW mast-mounted turbine. If you've got the space and sufficient wind speed, this can generate enough electricity to power the whole house – and any you don't use, you can sell back to the National Grid.

Cost: £11,000 to £19,000 installed, but Government grants are available.
CO2 saving: 1 to 5 tonnes per year, depending on size and location.
Potential cost saving: With enough wind, you may never have to pay another electricity bill.

Ground source heat pump

A ground source heat pump consists of pipes buried underground that have liquids pumped along them at pressure. An electric heat pump converts the constant temperature (around 11ºC) of the earth to 55 ºC – perfect for use with underfloor heating. It's disruptive to install but, if you have the space, it can be much more efficient than a traditional boiler.

Cost: 8 to 12kW systems cost £6,000 to £12,000. Grants are available.
CO2 saving: 1.2 to 7 tonnes.
Potential cost saving: £400 to £1,000 a year.

Air source heat pump

Air source heat pumps extract the warmth in the air and convert it ready to be used in the home – either as warm air pumped through vents or in underfloor heating. They are best suited to off-grid properties and are much easier to install than the ground source option.

Cost: a 6kW system will cost £7,000 to £10,000.
CO2 saving: Around 1 to 5 tonnes.
Potential cost saving: £300 to £800 a year.

Underfloor heating

A hot water underfloor heating system is more efficient to run than radiators, provides invisible warmth and frees up wall space. If you're renovating a room, this could be the perfect heating solution for a greener home.

Unlike traditional radiators that just heat the air, pipes under the floor concentrate the warmth where you sit or stand, leaving your feet toasty and your head slightly cooler – ideal conditions for genuine comfort.

Radiators also require significantly higher temperatures to heat a room, while underfloor heating needs around 45ºC to work. This means the boiler needs to work less, reducing running costs and cutting CO2 emissions. It also makes the system ideal for use with renewable technology such as ground or air source heat pumps.

Installation can be disruptive, but next time you're renovating a room, consider underfloor heating. It works under almost all floor surfaces and, because it takes up no wall space, your furniture can be positioned anywhere you want.

Micro CHP (combined heat and power)

Micro CHP appliances replace a standard gas or liquefied petroleum gas (LPG) boiler and generate both electricity and heat – it's rather like having a mini power station in your own home. Generating electricity at a creaky old power station is less than 50% efficient, but electricity generated through a micro CHP boiler is 80% to 90% efficient, saving money and fossil fuels. It's even possible to feed power back into the National Grid and get paid for it. CHP has been used successfully in schools and hospitals and new domestic units are currently being brought to market.

Cost: from £3,000.
CO2 saving: 500kg.
Potential cost saving: £150.00 to £400 per year.

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