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.