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Return on Investment

The phrase return on investment (ROI) has different meanings to different people. For many who are interested in green energy, the return they are seeking is the knowledge that they are doing their bit for a sustainable future. The warm feelings people get when they see themselves being part of the solution rather than part of the problems are reward enough. The investment is the cost of making their homes energy efficient, the return is emotional satisfaction, a greener planet and a more hopeful future for humanity.

We believe this is a fine use of the phrase, although many people rightly point out that it is difficult to measure feelings of contentment and much prefer to use ROI in the strict economic sense of a ratio of money gained on an investment relative to the amount of money invested.

For example the switch from incandescent lightbulbs to compact fluorescent (which use much less power and last far longer) meant that the average household makes back their investment in less than a year. Over a five year period the ROI is something like 1100%

The fantastic news is that investing in other forms of renewable energy can also secure a good economic return on investment. Whether you are looking to build a multi gigawatt energy system or just heat the water in your bath with solar panels, the economic arguments for green solutions are now undeniably clear.

Ignoring the environmental impact for just a moment; when we look at the medium term predictions for the rising cost of traditional energy generation and also the falling costs of green solutions such as turbines and solar panels, it becomes clear that self generation is an economically attractive way forward.

Then add to this scheme such as the Government's Feed in Tariff, (a series of tax free payments designed to encourage the adoption of sources) and the ROI calculations start to look very inviting. The UK government's own aim is for the Feed In Tariff to provide a ROI of between five and eight per cent. This return is many times higher than what you would achieve by leaving your money in a savings account.

Here at Freesource Energy we are committed to working with you to build an environmentally sustainable future, but we also know that your money matters to you.  Together we can achieve solutions that make sound environmental and economic sense.