SUNSHINE HAS always been a principal ingredient in milk production, but nowadays, it can contribute in more ways than simply encouraging forage growth.

Here, Joe Fergusson and Nigel Benson, microgeneration consultants at Bell Ingram, examine which form of solar power – water heating or electricity generation – makes best use of a milking parlour's roof space.

"Even in Lairg, every exposed square metre of a farm shed roof will either absorb or reflect over 800kW hours of solar energy each year. Scotland's dairy farmers are waking up to the potential link between this fact and the scale of their energy bills for water heating and milk chilling.

But enthusiastic suppliers of solar panels generally specialise in either photovoltaic (PV) electricity generating systems or solar thermal water heating ones, seldom both. So which to go for?

A little analysis can help judge which of these technologies will make most economic use of roof space. The first element in this comparison is what you are paying per kWh for heat and electricity – perhaps the same rate if heating water by electricity – and so what they are worth to you when you generate them yourself?

Secondly, factor in the values of the Feed in Tariff and Renewable Heat Incentive, now payable for metered kWh of PV and solar thermal energy, respectively, and compare the total benefit from the alternative forms of generation.

Finally, consider the practical pros and cons and issues affecting the relative costs to you of installing and maintaining the alternative systems.

Let's look a little closer at each of these in turn. A little time poring over your fuel and electricity statements, or speaking to your supplier, will reveal how many kWh of electricity your steading consumes in a typical 12-month period and, if applicable, how many litres of oil or LPG.

If heating your water with immersion heaters, you'll have to hazard a guess at what proportion of your total goes on heating. Likewise, if the same oil tank also heats the house, some assumptions will have to be made.

Taking a daily demand of 1000 litres of heated water for our illustration, it takes about 60kWh to raise this volume from 10°C to 60°C. This is equivalent to burning 7 litres of oil in a reasonably efficient boiler, costing around 6.4p/kWh at 55p/litre.

If you're on a split electricity tariff, your night time rate might be roughly the same as this, or perhaps twice this on a standard rate. This means that in a totally efficient, highly insulated system with no standing losses, you spend £1400 to £2800 per year per 1000 litres of water heated daily to 60°C.

In reality, it will be rather more than this and it is well worth insulating all tanks, pipes and valves – anything that feels warm to the touch – to the hilt.

So that's what you stand to save, but what are the incentives worth on top? To heat your tonne of water per day efficiently will require 22,000kWh per annum. A roughly south-facing roof which could accommodate a 200m2, 27kW peak PV array would generate this and receive a feed-in tariff of 32.9p/kWh, totalling £7200 per annum, rising with inflation for the next 25 years.

Add in the 6.4p/kWh saved and you get an annual benefit of £8600, or £10,000 if paying 12.8p/kWh to power immersers, giving a simple payback of 11 or nine years, respectively, if you spend £85,000 on the installation.

To generate that 22,000kWh of heat directly with thermal, fluid-filled panels would need only about 50-60m2 – BUT unlike electricity, you can't export heat so there's little to be gained by sizing the system to produce on a typical summer day much more than you will use.

This would mean approximately 35m2 for 1000 litres of hot water, generating a bit over 13,000 kWh per annum. The RHI payment for solar thermal is 8.5p per kWh of heat used so the annual payment, this time payable for 20 years with inflationary increases, would total £1,100.

Add in the 6.4p/kWh saved and you get an annual benefit of £1930, or £2760 if paying 12.8p/kWh to power immersers, giving a longer simple payback of 14 or 10 years, respectively, if you pay £27,000 for this installation.

So what if 60m² of sunny roof is all you have available? This smaller PV array, costing about the same as the 60m² thermal system, will generate 30% of that 200m² system and cost a bit more to install per kW, but also earn a higher rate of feed-in tariff – 37.8p/kWh rather than 32.9p – so the rate of return on investment remains about the same and although you are displacing a smaller proportion of your actual energy use, the subsidised benefit from this smaller system still exceeds your current heating costs.

So what about the practicalities and other issues? Advantages of PV are that it weighs less (per m²) and cannot leak, but these shouldn't be deciders.

On the face of it, the two alternatives have similar 20-plus year design lives and should lose efficiency at a similarly slow rate over time.

You will note that it is only the much larger subsidy paid per kWh for the PV that puts it ahead of the thermal system financially and we trust that future governments will honour the statutes under which the very long term incentive schemes are drawn up. Solar thermal is more efficient and, without subsidy, it makes more sense.

To complicate the investment decision further, the Renewable Heat Incentive also subsidises ground-source heat pumps (which can use electricity generated by a PV array), using one unit of electricity to 'compress' about three units of low-grade heat energy from the ground to heat water to about 50°C, paying another 4.5p per kWh of metered heat generated.

So instead of paying 6.4p or 12.8p (say) for a unit of heat, you pay one third of this then receive 4.5p, so you are anything up to 13p up on the deal. Then again, the most efficient system may involve a heat pump chilling the milk and transferring the heat to the water being heated for the next cycle, but this isn't eligible for RHI.

The option of a wood pellet boiler has other advantages. A holistic options appraisal by an independent microgeneration consultant can identify the most cost-effective combination of measures.

Our conclusion is that the Feed-in Tariffs at their current levels create an artificial, and possibly temporary, situation in which the best use for a sturdy unshaded roof is typically PV generation.

Although the payback is still long, you will always need electricity which will continue to go up in price, so if you get in before the tariffs are reduced for new entrants to the scheme, as may happen next April, you shouldn't regret it. But, get three directly comparable quotes for top quality modules and inverters from experienced installers and be sure they assess carefully the condition of the roof and the effects of any shading.

The figures quoted above are typical at the time of writing but will all vary and should be verified independently. Bell Ingram Microgeneration Consultants can be contacted on 01738 621121 or via"