Financing Your Green Improvements with Renewable Energy Loans

Are you looking to power your home with green energy?

As part of the EU Renewable Energy Directive, the UK has a target of producing 15 per cent of energy from renewable sources by 2020. As environmental concerns become more important, renewable energy is becoming a big industry in the UK as more and more firms look to produce power from water, wind, the sun and other sources.

One of the most popular ways to produce clean, renewable energy is through solar panels. These photovoltaic (PV) solar panels are attached to the roof of a residential or business property and provide energy from sunlight. In addition, increasing numbers of homes have their own wind turbines to produce energy from the wind whilst others have hydro power or ‘anaerobic digestion’ systems.

The advantages of these renewable energy sources are not only that they provide greener power but also as they can provide lower cost energy to homeowners.

High Initial Cost of Installing Green Energy

However, the cost of installing solar PV panels or a wind turbine in a residential property can be prohibitive to many people. Solar panels cost upwards of £12,000 and whilst they will produce savings over a number of years, many people do not have the initial capital available to pay for the installation of panels, a turbine or a hydro-electric system.

That is where renewable energy loans are ideal. In 2010, the Government announced that they wanted to help ‘householders and communities wanting to make the move to low-carbon living’. The Independent reports that at present just 5.5 per cent of the UK's electricity comes from renewable sources, but the Government says this will have to rise to 30 per cent in order to meet its 2020 climate change target.

Renewable energy loans are designed to help homeowners borrow the money they need to invest in green energy solutions for their home. They allow homeowners to borrow the money for solar PV panels or a wind turbine secured against their home.

What Are Renewable Energy Loans Based On?

In order to finance the installation of renewable energy sources, you will need the capital (around £12,000 for solar PV panels). Firstly, you will need to have some equity in your home. The amount you can borrow on a renewable energy loan will largely depend on the amount of equity that you have. Lenders typically lend up to 80-90 per cent of the value of your home, less any existing secured borrowing.

Secondly, lenders will need to be sure that the renewable energy loan is affordable to you. They do this by analysing your income and outgoings including your main mortgage and any other loans. One of the advantages of renewable energy, however, is that homeowners who generate electricity from green sources will receive an allowance from the Government.

This is called a ‘feed in tariff’ and is provided by the Government as an incentive for homes to use green energy sources. This allowance is also designed to give homeowners a greater guaranteed income in order that they can repay their renewable energy finance.

If you don’t have the cash available to install green energy in your home, why not consider a renewable energy loan? You will save money through cheaper power over forthcoming years as well as doing your bit for the environment.

To get your home improvement loan, fill our form on the right.