How to Generate Electricity

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Generating electricity at home is a great way to reduce your reliance on energy from the grid and save on energy bills . There are lots of ways in which you can generate your own electricity to power your home. Better still, you can get paid by your energy supplier for the electricity that you generate. But, of course, if generating electricity by yourself were easy, everyone would be doing it. Generating electricity requires some upfront investment, and a little know-how. In this article, we’ll look at the different ways in which you can generate electricity, where the energy we generate comes from, and how you can choose the best method of generating electricity for your household.
Last update: June 2022

As you may have heard on the news, the UK energy market is currently under an immense amount of stress as a result of a global gas shortage driving up costs and putting several energy suppliers out of business. To learn more about this and stay updated on a daily basis you can read our page on the UK energy crisis.

How do I generate electricity?

Before we look at specific ways in which you can generate electricity at home, we need to look at the science behind how electricity is generated. There are a number of ways in which electricity is generated. Before we look at exactly where electricity comes from, let’s look at some of these methods in detail:

Generating electricity from heat

Thermoelectric power (electricity generated from heat) has huge potential for the renewable energy market as new thermally conductive materials are discovered and improved upon. Generating electricity from heat relies on the “Seebeck effect”. This is where the difference in temperature between two dissimilar electrical conductors or semiconductors produces a voltage difference between the two substances. The greater the temperature difference, the greater the potential voltage.

For instance, heating a pot on a wood fire can generate enough energy to power your USB-charged devices. Thermoelectric generators are scalable, but difficult to buy as prefabricated units.

Generating electricity from magnets

Magnets can be used to generate electricity, although magnetic generators can be hard to come by in the UK. Magnetic generators use permanent magnets to power a turbine. They operate on the same scientific principle as those high school science lessons where we wrapped a copper coil around a bar magnet. A conducting coil is placed inside a magnetic field that’s generated by two permanent magnets. When the coil moves through the magnetic field, the electrons within move with it, and an electric current is generated.

Magnetic generators can, in theory, power your home. However, those wishing to generate renewable electricity using magnets will likely need the engineering know-how to assemble their own generators.

Generating energy from waste

Biomass generators and boilers are fairly rare in domestic settings by virtue of their bulk. However, they represent an environmentally friendly way to generate electricity using waste wood.

Generating electricity from sunlight

Of course, one of the most common ways of generating electricity. Solar panels work by generating what is known as the photovoltaic effect. A photovoltaic cell is sandwiched between layers of silicone that’s seeded with phosphorous. This layer acts as a conductor and adds electrons. The PV cell knocks electrons from their atoms, thereby creating a flow of electricity. Thus, sunlight is used to generate electricity.

Whether we’re talking about the solar panels that sit on the roofs of homes around the country, or the enormous solar panels used in solar farms, they use the same principle.

Generating electricity from water

Hydropower may be a small part of our national energy fuel mix. Nonetheless, it’s a handy way to generate renewable energy quickly in times of increased demand.

The movement of the water moves a turbine which, in turn, generates electricity. So electricity isn’t generated by the water itself but by the kinetic energy of its movement.

How is wind power produced?

The UK is actually a world leader in the field of wind energy, with a total capacity of over 24,000 megawatts. The UK has a number of on and offshore wind farms, as well as a number of domestic wind turbines on the rooftops of homes and businesses.

Regardless of their size, all wind turbines work on the same principle. Large blades catch the wind, which turns them around, thus driving a turbine that generates electricity.

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Where does electricity come from and how is it generated?

As we can see, the potential energy is all around us, just waiting to be converted into electricity. But while we’re all reliant on electricity for work, play and general survival, not many of us are sure exactly what electricity is, where it comes from and how it’s generated.

Before we look at specific ways in which you can generate your own renewable energy, let’s go back to school…

What is electricity?

You may wonder what exactly electricity is. This wonderful force of nature that is virtually limitless in its applications. Not only does it power the appliances and devices that we rely on, it’s at work within our bodies, carrying messages from body to brain via the central nervous system.

Electricity is simply defined as the flow of electrical charge. Charge, like mass, volume or density is a property of matter. The charge needs to be moved by charge carriers, specifically protons and electrons. Protons are positively charged, while electrons are negatively charged. Neutrons are, as the name suggest, neutral meaning that they carry no charge. The force that operates between these charges is called electrostatic force.

A conductor, like copper cable, for instance, collects free electrons that are looking for atoms to latch onto. As the charges flow through the copper atoms, this creates what we know to be electric current.

Where does electricity come from?

The potential for electricity is all around us, as we see every time lightning flashes across the sky. However, the electricity that we use every day is generated in power plants. Some of which burn fossil fuels to generate electricity, while others generate electricity in more renewable ways.

This energy travels through the vast network of cables and wires that make up the National Grid. When electricity is generated, its voltage is far too high to be used safely at home. Step down transformers are used to change the voltages using magnetic induction to the manageable 230 volts that we use in our homes.

What are the 6 methods of producing electricity?

We’ve looked at some of the ways in which energy is produced renewably. Electricity is also produced by burning coal, oil and other fossil fuels. Some power plants harness the power of nuclear materials to generate energy.

But what are the underlying methods that produce electricity, whatever the fuel source.

The 6 methods of producing electricity are:

  • Heat- i.e. The “Seebeck Effect”.
  • Light- The photons in sunlight create photo-ionisation that generates electricity.
  • Friction- Wherever static electricity is created by rubbing two objects together, it is the friction that creates the electrical charge.
  • Magnetism- Most power plants, be they nuclear, fossil, wind or hydro, use magnetism to generate electricity. The “prime mover” i.e. the fuel engages a turbine that moves conductors through a magnetic field.
  • Chemical- Electricity can also be generated via chemical reaction when two electrodes react to one another in electrolyte solutions like copper and zinc sulphate.
  • Pressure- Finally, the polarity of certain ceramics and crystals also has the potential to generate electric charge. External pressure can change the dimensions of these materials and facilitate electrical charge. The charge created is known as piezoelectricity.

Generating green electricity

Now we know a little more about electricity and how it’s created, let’s look at some of the available options when it comes to generating electricity at home. Each has its own benefits and caveats. It’s simply a matter of deciding the best option for you. The Papernest team are always happy to advise on how to save money on the energy you use from the grid (which you’ll likely still need to do), as well as ensuring that your supplier pays you the best rates for the energy you generate.

PV solar panels

PV solar panels are the most common and popular way to generate electricity at home. The amount of electricity you can generate depends on your available roof space, how much direct sunlight your roof receives, and how many panels you have in your solar array.

If you don’t like the idea of solar panels on your roof, you can actually buy PV solar roof tiles that offer a much less conspicuous way to produce energy. However, these are generally very costly and usually generate less electricity.

Solar panels typically cost between £5,000 and £8,000 to install, while solar tiles can cost between £10,000 and £12,000 including installation. However, you can get DIY solar panel kits from as little as £600.

Most solar panel systems have a peak capacity of anywhere between 1 kW and 4 kW. This is what you might expect to generate on a clear sunny day. However, solar panels will still generate energy in grey and cloudy conditions. Most domestic solar arrays will generate somewhere between 250 and 400 watts per hour on average.

Solar panels can save around £220-£250 per year on your energy bills, or £280-£330 with the Smart Export Guarantee (we’ll discuss that in greater detail later).

Hydroelectric energy

If you live close to a fast-moving body of water, you may be able to set up a micro-hydropower installation.

How much energy you can generate with a micro hydropower system will depend on the “head” (vertical drop) of the water. It is also dependent on the water’s flow rate and the kind of turbine you use. The cost of setting up a micro-hydropower system is a barrier to entry for most. Even an entry level 1kW turbine will cost £5,000-£6,000 plus installation.

However, since the water flows through the day and night, you can produce energy more consistently than with solar panels. You can potentially offset your energy bill by roughly 16p per kWh.

generating electricity

Wind turbines and hybrid systems

We’ve all seen banks of wind turbines from the motorway as we navigate our way through the countryside. But there are also smaller wind turbines that can be used on the roofs of our homes.

There are three types of wind turbine that are suitable for domestic use:

  • Mast mounted: Freestanding turbines that are placed in exposed areas on your property. These have range in capacity between 2.5-6 kW. Costs can be anywhere between £9,000 and £30,000 including the cost of installation.
  • Building-mounted: These smaller systems can be installed on your rooftop. They are lower in capacity, usually somewhere between 1 and 2kW. These cost up to £3,000 to install.
  • Micro domestic turbine: Mobile homes or properties with modest energy needs may benefit from a micro domestic turbine. These can be used to charge banks of batteries. These are very affordable, costing around £800 on average, not including the price of an AC / DC converter.

Geothermal energy

Geothermal energy does not yet have a presence in the UK. However, it does have a lot of potential, which is why it’s worthy of inclusion here. As with nuclear or fossil fuel generation, extreme heat is used to drive a turbine. However, the heat comes from deep within the ground, rather than by burning fuels. Countries like Italy that have active volcanic sites can easily generate geothermal energy. However, the same principle can be used to harness thermal energy from the sun that is stored in the ground.

This is how ground source heat pumps (a renewable source of heating) work.

Where does electricity go when not used?

There are some households that live completely off the grid. These household are able to use battery banks to store any energy that isn’t used when generated. However, depending on your setup, battery banks may be difficult to implement and manage.

Most of the time, households feed whatever energy they generate but don’t use back into the National Grid. On average, around 50% of the energy that gets generated is fed back into the grid.

This is why it’s important that your energy company pays you for this renewable power (because they’re getting it whether they pay you or not). The mechanism by which energy suppliers pay customers for the energy they generate is called the Smart Export Guarantee.

Understanding the Smart Export Guarantee

The Smart Export Guarantee replaces the Feed-in-Tariff which was phases out in 2019. Those who already have Feed-in-Tariffs can still continue to use them. However, the scheme is not available to new applicants.

The Smart Export Guarantee (SEG) is similar for all intents and purposes. The only difference is that the SEG is a shorter and more flexible contract. And while the rates are slightly less favourable than they are for Feed-in-Tariffs, you can still get a good rate if you know where to look.

In the table below, you can see all the energy suppliers that currently offer the SEG and the rates that they pay.

Supplier Tariff Name Tariff Type Tariff Length Tariff Rate (per kWh) Payment Cycle
Social Energy Smarter Export Currently Fixed No Fixed End Date 5.6p 3 months
Octopus Energy Outgoing Fixed or Outgoing Agile Fixed or Variable 12-month fixed term Fixed 5.5 Variable tethered to half-hourly wholesale rate Monthly
E.ON Energy Fix & Export Exclusive Fixed 12-month fixed term 5.5p Unknown
Bulb Energy Export Payments Fixed No Fixed End Date 5.38p 3 months
OVO Energy OVO SEG Tariff Fixed 12-month fixed term 4.0p 3 months
ScottishPower Smart Export Variable Tariff Currently Fixed No Fixed End Date 4.0p 6 months
SSE Smart Export Tariff Fixed No Fixed End Date 3.5p 12 months
EDF Energy Export+Earn Fixed 12-month fixed term 3.5p 3 months
Shell Energy SEG V1 Tariff Currently Fixed No Fixed End Date 3.5p 3 months
E.ON Energy Fix & Export Fixed 12-month fixed term 3.0p Unknown
Utilita Smart Export Guarantee Unknown Unknown 3.0p Unknown
British Gas Export & Earn Flex Currently Fixed No Fixed End Date 1.5p 6 months
Green Network Energy SEG Tariff Currently Fixed No Fixed End Date 1.0p Quarterly
Utility Warehouse UW Smart Export Guarantee Fixed No Fixed End Date 0.5p Unknown

Reduce your energy bills and get paid more for generating electricity!

Even if you’re generating electricity at home, you’re still likely to need the use of some energy from the grid. The Papernest team can help you to save money on the grid energy you use by matching you with the perfect energy plan for your needs. We can also find you the best Smart Export Guarantee rates. There’s no obligation to use the same supplier for your SEG and your energy. So you can get the best of both worlds.

Would you like to know more about saving on energy bills? Great! Check out these related articles:

  1. Energy price cap
  2. Government energy grant
  3. Energy efficiency
  4. Feed in tariff
  5. Smart Export Guarantee


Is generating your own electricity worth it?

That really depends on your individual circumstances, the type of installation you choose and how long you intend to stay in your current home. However, while it may involve some upfront expenditure, generating your own electricity could save you hundreds of pounds a year, especially if you have a Smart Export Guarantee.

How much of the energy generated gets fed back into the grid?

On average, approximately 50% of the energy you generate is fed back into the grid, unless you have storage batteries. This is why it’s so important to ensure that you have a Smart Export Guarantee. Your supplier will take the energy, whether they pay for it or not.

Can I get solar panels with the Green Homes Grant?

The Green Homes Grant is intended to offset the cost of renewable heating and insulation. As such, you cannot claim solar panels under this grant. However, you can claim against the cost of solar water heaters.

Can I get a Smart Export Guarantee if I have a Feed-in-Tariff?

Yes, you can. However, given that rates are generally more favourable under a Feed-in-Tariff, so it may be more cost-effective to stay as you are.

Updated on 16 Jun, 2022

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