Free Solar Panels Vs Financing the Installation- Chapter 8

If you have the money to pay for your solar PV system outright you should expect to get your money back in about 8 to10 years which will enable you to a enjoy a further 15 years of tax free tariff payments. It is estimated that the average homeowner can expect about a 9% return from their solar system which, compared to what banks are offering at the moment, is a very attractive proposition. Naturally, if you do have to borrow the money it will take longer to get to where you’re profiting from your system. However, the government’s commitment to carbon footprint reduction means the tariff payments have been made deliberately profitable even when loan repayments are factored into the equation.

The Power Of FREE

The introduction of Feed In Tariffs has given rise to many companies seeing a way of generating extra profits by promoting Free Solar Panel offers, sometimes referred to as “Rent My Roof Space” schemes. This involves companies offering to fund, in full, the equipment and the installation while providing some ongoing money saving benefits to the householder. In return, the company receives the income from the generation and export tariffs. Some homeowners see the potential but have ruled out the possibility of solar power for their own homes due to the initial outlay. But the savings they could make may seem worth it. It has to be remembered this is not an act of charity and that the companies offering these schemes do expect to recoup their costs via the income received from the Feed In Tariffs and then go into profit as quickly as possible.

In order for it to be worthwhile to the companies making this offer, they have to lay down strict criteria that has to be met in order for the household to qualify for the scheme. This usually means they will only consider roofs that are facing close to due south. It’s likely they will
require larger roofs and rule out any form of shading that may prevent them from getting the maximum use of the area. One quick and safe way to see if you might qualify for free solar
panels is to go to view your home on Google Maps at:


http://www.google.co.uk/maps
, switch to satellite view, take a look at the part of your roof that’s south facing and measure the biggest area of it.

Another good thing about enquiring about free solar panels is that if you find you do qualify then you can be fairly sure that your roof is in a very good position to get the most from a solar PV installation.

The important thing is to know sooner than later so you can take action while the FITs payments are being guaranteed by the government to stay at this high rate for anyone entering the scheme prior to the next review. After that happens, people entering the scheme will do so at a much lower rate of pay.

So are free solar panels for you or will you be able to find a way to finance your system and maximise your output and income for profit? The terms and conditions for receiving free solar panels will vary from one company to another but on the next page are some things you should consider and research further before making up your mind. This is a long-term agreement and things can change so you need to know who is responsible for what before you start.

Financing Your Solar Panel PV Installation

Energy Efficient Mortgages

If none of the FREE solar panel schemes seem worth the bother, there are ways you could raise the finance for your own solar system including adding the cost to your mortgage. If you have equity in your home, it’s quite possible that the Feed In Tariff you would receive could repay the extra loan, generate a profit and reduce your energy bills in one go. If you’re looking to move houseand you’re thinking about solar power for your new property, you could consider looking for a house with a suitable south-facing roof and add the cost of the solar PV installation onto your new mortgage.

Other Sources of Funding

Local Council Grants
Some local councils run renewable energy schemes of their own and if your home meets certain criteria, may award a grant that will pay for the installation of your solar PV with either full or part funding. These local grants are very limited and usually aimed at homes struggling the
most with fuel bills.

Interest Free Loans
Where available, these loans are offered by local authorities and regional governments, covering just a proportion of your solar PV installation. These types of loan can be very attractive, especially where the repayment terms are flexible for homeowners. On a £5,000 loan from a
bank with a typical 14.5%, a zero interest loan monthly payment would be in the region of £83 compared to the bank’s £118 – a £35 monthly saving and a total saving of £2,058 over the period of the loan.

Leasing Solar PV

This system operates along the same lines as a vehicle lease for homeowners who would like to spread the cost over a specified period. The customer takes out a contract with the leasing company associated with the installer. The installer will then proceed to design, supply and
install the system for the customer. There are no upfront costs to the client with payments commencingat time of delivery. The lease is designed to become cash positive after
about 6 years, after which the homeowner pays a nominal rent for the system.
This type of finance is 100% tax deductible, giving the homeowner the opportunity to proceed with the installation early enough to take full advantage of the Feed In Tariff. This eliminates the need for more complex bank loans or trying to raise the full amount before the project can commence.

You could also visit http://www.therenewablenergycentre.co.uk/grants for information on the types of loans available.

Frequently Asked Questions About Free Solar Panels

Q: Will my home be harder to sell with someone else’s panels on?

A: There seems to be very mixed feelings about this and it could work one of two ways. The Energy Savings Trust has statistics that indicate that homes with solar panels on them sell 30%
faster than those without. However, the prospective buyer may not like the idea of inheriting the agreement of a previous owner but may be persuaded otherwise if shown the benefits
of electricity savings.

Q: Would a free solar panels supplier require regular access to my property for the
purpose of maintenance?

A: No. Some access from time to time may be required but the
company should contact you to arrange a date and time
convenient to you.

Q: Can we purchase the panels off the company at a later date
if we want to?

A: No. The company benefits from the revenue generated over the
25 year period. However, it’s often the case that ownership of
the system transfers to the homeowner at the end of the FIT
scheme and the panels will be left on the property in perpetuity
or for the life of the panels so the homeowner can continue to
benefit from them. A solar PV system may be classed as a home
improvement and, as such, increase the value of the property.

Q: Can anyone qualify for free solar panels?

A: No. Free panels are only offered to those whose household
meets the right criteria to obtain optimum performance. For
instance, although panels operate on roofs that aren’t south
facing, free solar panels are usually selected for roofs that are
either south facing or within about 30% either side of due south.
There will also be a specified roof size that will be able to
house sufficient panels without interruption and the space
available must not overshadowed by trees or neighbouring
buildings.