Make borrowing work for your finances

As the world changes, we’re becoming more aware of the impact that our actions have on the planet and are making an effort to reduce carbon emissions and be less wasteful. In addition to this, the cost of living crisis has put enormous pressure on families to keep up with rising energy prices, with the energy price cap set to increase further later this year. But what can you do if you want to make your home more environmentally friendly and reduce your energy costs in the long run?

Renewable energy sources like air source heat pumps, solar panels, and solar heating all offer benefits over traditional power sources, but each comes with its own unique set of pros and cons. We'll go over them below so that when it’s time for you to choose one, you’ll know which is the best one for you and your finances!

And remember.. if you’re a member of First Rate Credit Union, our larger loans are perfect if you’re looking to spread out your costs! Read on to find out more!

Air source heat pumps

Air source heat pumps are a form of renewable energy technology that uses air to transfer thermal energy between two systems. They work by transferring the air outside (no matter the temperature) into heat for your home. Whilst there are a lot of benefits to installation, you’d need to ensure that your home is insulated to a suitable level before installing them. Air pump costs typically range from £12,000-£17,000, not inclusive of installation costs. In terms of the level of heat that air pumps can provide, they’re best suited for keeping ambient warmth but not for boosting heat. In other words, your radiators will feel warm to the touch, but not hot!

Solar panels 

Solar panels are a great way to generate electricity and offset your utility bills. They are made up of solar cells, which convert sunlight into direct current electricity and can be installed on your roof to generate power for your home. Having grown in popularity over the last several years, it serves as a great environmentally friendly source of energy. The biggest benefit of using solar energy is that it provides you with free energy from nature!

As a result of energy prices soaring, the cost vs. the savings incurred by solar power installation have improved significantly. In fact, under the Smart Export Guarantee (SEG) scheme which launched in January 2020, you can even make money by ‘exporting’ the energy that you don’t use, and it’ll get redistributed back into the national grid.

Whilst the benefits seem incredible, you’d need to make sure that your home is suitable for solar panel installations and be pretty set on living in your house long-term to fully reap the benefits. For some accurate figures on just how much you can save, check out Money Saving Expert’s article about solar panels.

Solar water heating

Solar water heating is a simple and cost-effective way of offsetting your energy bills! The sun heats up water in a collector and transfers it to an insulated storage tank, which you can then use for things like dishwashing or showering. The advantages? It’s free, clean energy that doesn’t produce any pollution! As long as there is sunshine during the day (or you have access to backup electricity) your hot water will always be available when needed most—which means no more waiting around for cold showers after working out or cooking dinner!

Since these systems use solar panels to generate electricity, you’d need to ensure your house is suitable for it to work optimally. They generally cost around £3,000 and £5,000 but this may vary depending on the size of your property and whether you need a new water cylinder or not, so remember to consult with an installer.

How they can impact your savings in the long run

The cost of purchasing and using renewable energy products can vary widely depending on the product you choose, the size and the suitability of your home. But if you’re set on your home for the long-term then it’ll definitely be worth the investment for your finances and most definitely for our planet!

We understand that the initial investment can be quite costly, so we’ve put together a few links where you’d be able to get some government-funded support, and additional advice on finding the best renewable energy system for you!

The National Energy Foundation YouGen - Find ​​trusted companies in your area who specialize in renewable energy technology.

Boiler Upgrade Scheme - Government scheme aimed to to help reduce carbon emissions. Grants are offered at a flat rate of £5,000 for air source heat pumps and £6,000 for ground source heat pumps. (England & Wales)

Smart Export Guarantee (SEG) - government-backed initiative to pay small scale generators for low-carbon electricity which they export back to the National Grid.

0% VAT for  installation of energy saving materials and technologies - 1st April 2022 - 31st March 2027

LA FLEX & LADS - Local council support for those who are not in receipt of any benefits.

And finally, at First Rate Credit Union, our larger loans are perfect if you’re looking to spread out your costs! We aim to support employees at BAE Systems with their financial journey. Borrow £10000 to £15000 at just 7.9%APR. Reach out to us today, for more information!