Are Free Solar Panels A Good Deal?

There are many companies offering free installation of solar panels for your home through “Rent a Roof” schemes. Great news you say, no initial costs and free electricity for your home. Sounds too good to be true? There are many things to consider that you wont be told about when choosing to install free solar…

There are many companies offering free installation of solar panels for your home through “Rent a Roof” schemes. Great news you say, no initial costs and free electricity for your home. Sounds too good to be true? There are many things to consider that you wont be told about when choosing to install free solar panels.

So what's the catch?
Well the solar panels and installation are in fact free. So no catch? Not quite, although the panels are free and you do receive free electricity produced by the panels but you do not actually own the solar panels. These are owned by the company that installs them. This company also receives all the Feed-In-Tariff Payments (FIT's) which are guaranteed for 25 years.

What are FiT payments?
Feed-in Tariffs (also known as FiTs) are the payments received by the owner of a Solar PV system. This a government backed scheme that pays people for creating their own “green electricity”. If you opt for an installation of free Solar PV you will see nothing of these payments, which in the long run would give you a great return on investment if you purchased your own Solar PV system.

Selling your house? You may have a problem
There has been various problems exposed for home owners that are trying to sell their house with free solar panels installed on their roof. The Royal Institution of Chartered Surveyors (RICS), have advised against making offers to buy properties fitted where solar panels have been installed.

The problem is partly due to the company that installed your solar panels now own your roof for the duration of the Feed-in Tariff life time, this is now 20 years. It is difficult for buyers to secure mortgages on homes with “free solar pv” due to not having full ownership of the roof.

What are the alternatives to free solar panels?
Solar panels have halved in price over the last year meaning the capital outlay is significantly lower that you might expect. A typical solar PV system now costs between £ 4,000 and £ 7,000 depending on the size. Another alternative to “free solar panel schemes” if you can not afford the initial outlay upfront you can secure a low interest loan, such as the home improvement loans from Tesco.

The original outlay may be more expensive initially, but in the long run you will be better off and will avoid running to any issues with your roof. You will also receive the full Feed-in Tariff, export tariff as well as generating your own electricity to reduce your bills. The total income on a typical 4kwp Solar PV system for example is £ 869.58 annually, this will increase year on year with in-line with inflation.

All payments and savings are tax free, index linked and guaranteed for 20 years. So a Return on investment over 20 years = 21.77% (based on annual inflation of 4% and annual energy price increases of 8.7%).