Solar PV panels worth £10-12,000, installed on your roof, free of charge – it sounds too good to be true, but is it really?
The ‘rent a roof’ model, as it is known, is proving attractive to installers and investors. A Shade Greener, Homesun and Isis Solar are just three of companies offering the service, and more will follow. So it’s good for business. But is it a good deal for the consumer too?
First let’s look at how it works. The company looks for homeowners with a south facing roof that is strong enough to install solar PV panels. They install a system free of charge, and agree to maintain it for 25 years. In return you sign a contract agreeing that they should receive the feed-in tariff income on all the electricity that installation generates for the full 25 years.
An average household solar PV installation is around 2kWp. It generates an income of around £800 from the feed-in tariff which, under a rent a roof scheme, will be assigned to the installation company. You will just benefit from a reduced electricity bill as a result of using some of the free solar electricity generated.
This saving may be up to £100 a year (on this size installation). The rule of thumb says that most people use half of the electricity they generate in the home, and half is exported to the grid. However, how much you actually benefit will depend on how much electricity you use during the day when the sun is shining. If all members of the household are out at work or school all day, then you’ll probably save less that that.
If you’ve got the capital to invest, and you want solar panels, it makes more sense to install the solar panels yourself and benefit from the feed-in tariff. Even if you have to take out a loan for the up front cost, Consumer Focus reckons it’s a better financial deal than renting your roof.
The government is due to introduce the Green Deal soon which will provide up to £6,500 finance for increasing home energy efficiency. The money will be paid back over a long period out of the savings in energy bills. It’s not clear yet whether solar panels and other microgeneration technologies will be included in the scheme, but if so the green deal will also be a better way of financing solar PV installations than renting your roof out.
So, if you don’t have capital, and don’t want to, or can’t afford to, take out a loan, is it a good deal? On the face of it, it could save up to £2,500 in electricity bills over 25 years (at today’s prices – although it’s likely to be more as energy prices rise). But I’d want to know more about all sorts of things before I went ahead. (I will be researching these over the coming weeks, so do keep an eye on the blog for updates). Here are some of my questions:
How much will I really save, based on actual electricity usage, and how much I’m at home during the day?
What happens if the panels break or stop generating?
Who is liable if anything goes wrong?
Will it impact my ability to sell the house? What happens if a buyer wants to remove the panels?
What, if anything, will I have to pay for?
Can I buy back the assigned feed-in tariff?
Who owns the kit? Is it insured? And if so, by who?
Who owns the panels at the end of the 25 year deal?
What happens if the company which installed the solar panels goes bust before the 25 years are up?
These are just a few of the questions I’d want to ask before going ahead with a deal. I’m sure you can think of more – tell us at YouGen what you think of the scheme. Is there such a thing as free electricity? Are you tempted by the idea?
First published on YouGen blog. For more independent information on renewable energy, please visit the YouGen website.