Implications of “Free” Solar Panels

published Sep 10, 2014

2 min read

Solar Energy

Read about what makes “free” solar panels attractive and find out if they are really worth it

If you are thinking about installing solar panels – to cut your energy bill or get a grip of the generous subsidies that are being offered, here is some information you need to be aware of.

If you have the ability to raise £15,000, the best thing you can do is buy your own panels. The return on investment should be expected after 9 or 10 years. Over 25 years, most households will enjoy a risk-free profit of £20,000 along with lower electricity bill.

What you can also do, is accepting an offer from some solar companies that will fit the solar panels on your roof “for free”. This will save you the typical £7,000 – £10,000 installation costs for fitting the panels.

Why “Free“ Solar Panels

The company who will install the panels grants free usage of the electricity produced. The excess energy not consumed in your household is retained by the company and sold back to the grid. Your gain is that you will save around £250 a year on the electricity bill.

When you enter the agreement, you could be signing away as much as £30,000 worth of Feed-in -Tarrif revenue. This sum will be the return on investment for your panels and will be paid to you in quarterly rounds depending on the amount you sell back to the grid over 25 years. The Feed-in-Tariff payments are guaranteed, so there is no reason at all why you shouldn’t benefit from it.

Drawbacks to the Deal

The companies who install “free” solar panels are interested in certain types of roofs. They want to make sure the amount of energy generated is the most they can get. Thus, large, south facing roofs in good condition, no trees or shade are factors they are looking for.

Large urban locations are also preferred. So if you have a suitable roof, the most viable thing to do is raise the money for installation yourself.

If the property is sold, the solar panels’ lease is passed on to the next owner. Some properties where solar panels have been installed are proven to be unsalable, chopping into the house price. House buyers find a “leased” PV unattractive and don’t want to take over a leaking roof. If worse comes to worst, the installing company can refuse to sell their panels to the new homeowners, charge for the removal of panels and claim from you the Feed-in-Tariff money they could generate.

Entering the Agreement

However, if you decide to enter an agreement for “free” solar panels, be aware of the small print and check with the installer for panel warranty. Solar PV manufacturers will usually offer a minimum warranty for the output, which will indicate how much energy your solar system will generate.

You also need to consult with your mortgage lender since they also need to approve the project. On cml.org.uk you can read about the requirements. Some mortgage lenders might be reluctant to the idea and afraid to be left with bad debts if property deals turn sour.

Also, ask for the possibility of a buy-out clause at the end of the lease. This will give you the option to purchase the panels for the initial cost of installation minus depreciation.

You can increase the savings on the electricity bill by using your appliances during the day. Most owners will save around 30% of the bill through changing behaviour. You can use the washing machine during the day and consider getting electric heating instead of central heating. Electricity prices are projected to grow, so that will apply for the savings too.

The installers will monitor and maintain the panels so you don’t have to worry about that. Also, they are the ones taking care of the insurance. The panel installation can take from a day to a week, depending on the size of the roof. You will also have 2 small meters installed next to the prepay meter along with a new inverter on the roof.

We recommend that you get independent legal advice before entering an agreement with a “free” solar panels installer. It is important to get advice on the details of the contract and know about all implications.