Can this boiler slash your energy bills?

British company Flow Energy is set to launch a boiler later this year that can generate its own electricity, cutting bills drastically.

The company says it can generate as much as 40% of a household's energy needs for just £50 a year in extra costs. The idea is that generating electricity in the home reduces the wastage caused by transporting it through the grid.

"It can generate around 1800 kWh of electricity annually – about half a typical household needs," says the company. "And it will reduce your CO2 emissions by the equivalent of driving 4,000 miles less in your car."

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Like a conventional boiler, the Flow boiler works by burning gas to heat water, which in a conventional boiler is then pumped through pipes and radiators. But the Flow boiler adds an extra stage. Rather than heating the water directly, it heats a special coolant. This evaporates, with the resulting "steam" spinning a device known as a scroll activator - which acts as a small generator to produce electricity.

The vapour then enters a heat exchange, where it turns back into a liquid, with the captured heat heating the radiator pipes as usual. The energy needed to do this, says the company, will only add about £50 a year to bills.

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The device can only generate electricity when the heating is on - but the company says that's when most electricity is used anyway.

The company has set up a finance scheme for customers, allowing them to offset the cost against their bills so that the boiler effectively pays for itself. They receive the boiler with no upfront cost, paying it off over the course of five years. But Flow will then reduce bills by the same amount as the monthly repayments, so that the customer comes out quits.

However, customers have so agree to buy their energy from Flow for the five years, or lose their rebate - and although the company promises it will keep prices competitive, this may be too much of a gamble for some.

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Crucially, customers must also sign over their feed-in tariff - the payment the government gives for electricity generated and fed into the grid - back to Flow. And it's this that makes the scheme work financially for the company.

Flow says it is planning to launch the devices at the end of this year, with an initial production run of 20,000.

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