Some companies are offering the free installation of solar panels in exchange for a generous slice of surplus energy pay. But in some ways this deal is too good to be true.

Market researchers have found that demand for solar panels has grown dramatically since 2010. Three months ago we wrote that 50% of homeowners are considering installing solar panels. That number has now risen to 60%. Homeowners considering installing solar panels shouldn’t wait around; the Daily Telegraph has found that right now is the most profitable time to have solar panels installed. Those who want solar panels have two main options, pay for installation themselves, or look out for a company offering ‘free’ solar panels.

There’s no such thing as a free lunch, but what about free solar panels? What do homeowners stand to gain from a ‘free’ solar panel scheme, and do the benefits outweigh the costs?

What’s the deal with ‘free’ solar panel schemes?

 

‘Free’ solar panel schemes, or rent-a-roof schemes, are offered by companies that are seeking to make a profit from the Feed-in Tariff (FIT). The FIT is a government policy which guarantees payment in return for generating electricity with renewable energy technology, including solar panels. Some enterprising companies are taking advantage of the FIT by leasing rooftops from homeowners for twenty to twenty-five years, in exchange for installing and maintaining solar photovoltaic (PV) panels on it. The homeowner pays nothing upfront, and benefits from the ‘free’ electricity that is generated, while the company pockets the FIT.

Why is it better to install your own solar panels?

As the Guardian has reported already, free solar panels are good, but buying solar panels yourself is better. This is because the companies that are installing ‘free’ solar panels earn more through the FIT than the homeowner does through the reduced energy bills. Homeowners who can pay for solar panels themselves, and take all of the profits, should do so.

 

If you can’t afford to pay for your own solar panels it becomes a little more complicated. There’s a good chance that borrowing money through a personal loan and installing your own solar panels is a better financial decision than getting ‘free’ solar panels, though that would depend on the terms of your loan. The government’s ‘Green Deal’ is an excellent example of a loan that would enable you to buy solar panels with a very generous repayment schedule. You could even make money on solar panels by remortgaging your home, though you should check all of the available alternatives thoroughly before doing so.

There is another thing to consider when weighing up whether you should have ‘free’ solar panels installed. To really make the most of the electricity generated by the solar panels, you’ll have to change your lifestyle so that your appliances are working in the middle of the day when the sun is shining. This would benefit stay-at-home mums, retired people and remote workers the most. If this is impractical because you work away from home during the day, you can install a timer on your appliances and set them to work when electricity is cheapest.

Always read the small print when signing over your rooftop

 

If you are certain that you want to get ‘free’ solar panels, then it is absolutely crucial that you read the small print of any agreement that you sign. The agreement should not:

• Stipulate that you may not sell your house.
• Stipulate that you cannot get a loft conversion.
• Force you to payout if the panels need to be temporarily removed for roof work.

Remember to get legal advice from a trustworthy professional before you sign anything. Also remember that if you sell your house, you’ll need to find a buyer who is comfortable taking on the lease – although they should be at least be happy with the reduced electricity bills. Lastly, double check who will pay for insurance and maintenance. In most cases the company should be responsible. Or, rather than deal with the potential headaches of leasing, take advantage of the competitive pricing here at Complete Renewables and buy your own solar panels.

Check with a professional before leasing your rooftop. Talk to us on 01621 827015 and let us make you a better offer.

Due to falling installation costs, the Telegraph finds that now is the most profitable time to install solar panels.

Did you invest in a “dot com” company like Google early in the 90s? Or were you able to snag a London property back in ‘96 when the price was right? Making the right financial decision at the right time can completely turn your life around, but unfortunately it’s normally difficult to know when the best moment to buy is.

However, a team of experts from the Daily Telegraph have found that right now is the best time to buy solar panels because installation prices are low and government payouts are in a perfect balance. But it’s important to strike while the time is right because installation costs may not continue to fall, and the government is likely to rethink its renewable energy policy at some point after the general election.

Solar Panel Costs Have Fallen £5,000 In The Last Five Years

According to figures from the National Energy Saving Trust, the price of solar panels has fallen considerably in recent years. In June 2012, the average solar panel costed £8,400, that’s £1,500 more than the figure from September 2014, which was £6,800. In fact, it is £5,000 cheaper to buy a solar panel today than it was five years ago. But the rate at which the price of solar panels is falling has slowed. According to experts, homeowners should buy now, because while the technology may get cheaper, there is no guarantee that the price will fall dramatically in the future.

Buy Solar Panels While The FIT Is Still Relatively Generous

Under the Feed-in Tariff (FIT), homeowners are paid for every unit of energy that they generate, which is fixed at the current rate on the day that they signed up for their panels. Currently, the income is guaranteed for twenty years. For example, someone who signed up today would earn just under 14p for every unit of electricity generated by their panels until 2035. According to data from the Daily Telegraph, a typical solar panel set will installed in the summer of 2012 will net the homeowners £226 taxfree annually for the next quarter century – paid directly into their bank accounts by the energy company. Of course, the FIT is only half the equation, the other half is a reduction in energy bills which also helps to make solar panels so lucrative.

However, the government is likely to reassess the FIT later this year. Experts expect the FIT to be cut, because it is reviewed on a three-monthly basis and changed depending on how many solar panels have been installed. With the government on target to reach a million solar panels on British rooftops by the end of this year, it’s fair to say that the FIT payments will fall. This is because the idea behind the FIT is to encourage the solar industry until the technology is cost-effective without a subsidy, a target that the industry is fast approaching. If you think that subsidies for any energy companies are deeply unfair, then you should take a look at the fossil fuel and nuclear industries, which receive an enormous amount more in government subsidies. Unlike the solar industry, the fossil fuel industry shows no signs of being able to survive without a subsidy in the future.

Party politics may also have a role to play in the economics of solar panels. Unlike the Labour party, the Conservatives failed to mention solar panels in their 2015 manifesto. Commentators have noted that this is not a good sign for the solar industry, should the current government be reelected in May.

Is Waiting For Cheaper Solar Panels A Good Idea?

Based on the two points that we have examined, the plateauing of installation costs and the likely drop in FIT payments, it could be dangerous to play the waiting game. Savvy homeowners will order their solar panels now, while FIT payments are secured at a generous level and installation costs are a fraction of what they were only a few years ago. Remember, certain factors can lead to an even bigger return. A south-facing roof in Essex, for instance, gets considerably more sunshine than the national average. It’s also the case that those who are at home during the day and use electricity when the sun is shining will benefit even more.

Buy solar panels now, while the outlook is brightest. Get a quote from Compete Renewables.