Power up: Generate your own electricity and save both money and the planet

In our 'Less Carbon, More Cash' article last week, we mentioned installing your own renewable energy technology as a way of saving money while reducing your impact on the planet. Here's our beginner's guide to doing just that:

Understand the technology available

The most common domestic renewable energy system is solar panelling, which often sits out of sight on a roof top (or sometimes a wall, depending on the positioning of the building). The panels convert the sun's energy into electricity, which is then fed into your home.

Wind turbines are another popular domestic energy system - and work on the same principle. In any case, you will need to consider how suitable your property is for such installations. The Energy Savings Trust will help you ascertain whether your property is suited to renewable energy generation.

Do the sums

The main incentive for installing renewable energy is the financial payback, which works in three ways.

1) The government's Feed-in Tariff (FiT) will pay you for every unit (or kwh) of electricity that you generate, regardless of what happens to it. The exact amount will depend on the size of your installation and when you start claiming, but a modestly sized 2.7kWp solar array could result in around £1,000 of payments a year.

2) You will receive a further 3p per kwh for every unit of electricity you don't use and export back to the grid. This could work out at around £50 a year.

3) Because you're generating your own energy, you're no longer dependant on energy suppliers to power your home, so the drop in your utilities bills will be drastic. As suppliers continue to hike up their prices, more and more people are opting into renewable energy for this reason alone.

Of course, installing renewable technology is not cheap. A domestic solar array can cost up to £12,000, for example. However, taking into account the potential savings, it will have paid for itself in around 7-10 years. After which, all savings and revenue go straight in your pocket. Many energy experts suggest that an investment of this sort in the current climate will yield a bigger pay off than a savings account, thanks to a weak economy.

The Energy Savings Trust has a handy online tool to help you gauge costs and payback time.

Use a reputable provider

Thanks to the green energy boom there are literally thousands of companies out there offering renewable energy installation services, but it's vital you choose a reputable company that will take the time to ascertain the right technology for you, and are happy to answer all your questions - after all, it can be a confusing business.

However, in order to be eligible for the FiTs, it's absolutely vital that the company you use is MCS accredited (this stands for microgeneration certification scheme). This is the industry 'kite mark', so if a company is not accredited, go elsewhere without hesitation.