A Sunny Future for Household Energy?
Homeowners and renters alike will no doubt be worried about the news that energy company Swalec is the third firm since June to increase its household electricity and gas rates. The company, part of Scottish and Southern Energy, is, amongst other things, blaming the wholesale price of energy in order to justify the rise, which will mean that the cost of household electricity will increase by 11% and gas will rise by 18% in September.
Why is the cost of household energy increasing?
Quite simply Swalec has had to increase its prices because, it says, the wholesale cost of energy has increased, the price of electricity has increased by 23% and gas by 40% since the last price-increase by the company in 2008. The cost of distributing energy has also increased by 14% according to estimates by Ofgem. Finally energy companies state that government implemented schemes such as the Carbon Emissions Reduction Target and the Warm Home Discount that require capital investment by energy suppliers is increasing their costs.
What will the effect on households be?
About 5.2 million electricity customers and 3.6 million gas customers could be affected by these changed across the UK. An increase in out going bills could tip more homeowners into the red in an already struggling market where more and more people are finding it difficult to keep up to date with their mortgage repayments. In particular people on pay-freezes and pensions will be hit hardest as their income will fail to meet the rising cost of living in Britain. Ofgem have estimated that, based on the average household fuel consumption, duel fuel bills could increase to £1,265 a year. Since the announcement the company has stated that another increase in the cost of electricity and gas will not occur again until August 2012 at least. Although the news comes as little comfort to the families now contemplating the idea of having to struggle to pay bills that are continuing to rise.
What are the alternatives to just accepting the rising cost of fuel for your home?
With the cost of electricity and gas rising, the return on investing in home-generated heating and electricity is greater than ever and thanks to the government's feed-in tariff there has never been a better time to invest in renewable home-energy generation. Solar panels in particular are a great option for homeowners with the money to invest.
Is it a good time to invest in solar panels?
Yes. Previously factors such as the amount of sunlight your roof gets or the amount of time you plan on spending in your current home could have put people off investing in solar panels, but thanks to advances in technology and an increase in the volume of sales the cost of installing solar panels has dramatically decreased. A solar panel installer commented that after being in the business for five years, the prices have been continuously decreasing: today a system of PV solar panels that cost £20,000 just two years ago would now cost £13,000. In addition inflation means that you get an even higher return through feed-in tariff payments, which works out at a guaranteed annual return of around 10% depending on how it is calculated.
Across the market the cost of installing solar panels is rapidly decreasing with reduced prices recorded in large UK solar companies such as Solarcentury and British Gas. On top of which the panels themselves are 10% more efficient so you get more for your money. Industry expert, Wondrausch, suggests that now is the time to invest in alternative electricity and hot water home generation, in particular solar panels. So whether or not the future of household energy looks sunny or expensive, the truth is becoming more and more apparent - renewable energy is the only future that will be sustainable - for the environment and for our purse strings.
Kieron Bolton, Director of propertyadviceblog.com invites you to visit our website to find UK Mortgage Brokers who can offer today's Best Buy mortgage products at the lowest possible rates. You can also compare over 5000 Conveyancing Solicitors, hundreds of Home Insurance providers and learn more about making your home energy efficient to save money on your Energy Bills. By visiting our site you'll receive a FREE copy of 'The Essential Property Ebook" together with Free impartial property Advice for all your property and real estate needs.
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