Is Hydroelectricity Worth It?
Unlike other renewable energies such as solar and wind, hydroelectric generation often takes a lot more thought and planning. If undertaken properly, though, it can provide a significant return on investment for the initial cost in both time and finance. There are number of factors that affect the viability of an installation, including the site being chosen, the environmental issues and, of course, the price of the equipment and the construction of the plant.
Is your Site Suitable for Hydroelectricity?
For solar it’s simple, you just have to be in possession of suitable roof, facing the right way and have the finances to have it installed. It’s low maintenance and gives a good return on investment after a few years. With hydroelectricity you need to think long and hard and do the research before you commit to what is a fairly big construction project. Most home owners will not have a free flowing river on hand but that is not the only consideration.
- Is the river fast flowing enough to provide you with all the electricity you will need?
- Will construction have an adverse effect on the local environment (including whether there is going to be a build-up of sediment from the outlet)?
- Is there suitable access to the site to ensure engineers and equipment can reach it?
Find out more about the suitability of hydroelectricity for your property.
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Planning and Designing your Hydroelectricity System
For all but the simplest of hydroelectric systems, you will need to go through a certain amount of planning and design that could add a great deal of cost onto your project. You will need to contact the Environment Agency and undertake an assessment for the impact it will have on the locality.
You may need to have planning permission and you will almost certainly require a bespoke solution that needs some design aspect. All this adds to the cost of installation which is why much of the hydroelectric installation work going on at the moment tends to involve the whole community who come together to help finance the operation.
Find out more about planning permission for hydroelectric projects.
The Cost of Hydroelectricity
The cost of a hydroelectric installation will vary depending on a wide range of factors, apart from purchasing the initial equipment. A small 5 kW system may well cost the minimum of £25,000 to buy and install and will come with additional running costs of another £1,000 a year. For a private property this cost may be overwhelming even if the system produces enough electricity to earn extra income from the Feed in Tariff.
Find out about the cost of installing a hydroelectric plant.
Maintenance and Hydroelectricity
Compared to other renewable technologies, your hydroelectric system will require regular maintenance, the cost of which will depend on the size. Routine inspections will need to be carried out and things like the bearings lubricated, the screens and pipes cleaned and the generator may well need replacing at some point over its lifetime.
Find out more about hydroelectric maintenance.
The Return on Investment for Hydroelectricity
The major selling point for hydroelectricity is the return on investment despite the initial cost in time and money for installing the system. It’s the reason why many community initiatives are starting to emerge as people realise the benefits of having access to this renewable source of energy. For larger installations, many businesses are willing to invest, banks want to lend and local people want to buy shares.
The main reason for this is the government’s Feed in Tariff which means that the electricity produced can be sold back to the grid and used to first pay off the initial investment and then provide a regular income. For private individuals this is tax free, and for communities the money raised can be used for vital services in the locality.
For instance, a 50 kW could be expected to cost around £350,000 to design and install and should produce enough energy to provide an annual income of £45,000 minus running costs. That means the initial investment can be paid off in as little as 7 to 8 years. In general, the bigger the capacity of the installation, the quicker the period of repayment.
Community projects that utilise local shareholders can also decrease the time it takes to pay off the initial debt by reducing the amount that is covered in bank loans. There is also the opportunity to offset any initial investment further by applying for renewable energy grants available through the EU.
Find out more about the return on investment for hydroelectric systems.
In general, the bigger the project the greater the return on investment as far as hydroelectricity is concerned. For those opting for micro hydro that provides the electricity for a single property then you need to weigh up the full cost of installation, including the planning and construction, to see if it provides the kind of return on investment that is hoped for.
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