Are ‘free’ solar panel offers too good to be true?
Following the introduction of Feed-in Tariffs, many companies are now offering free solar panels if you rent them your roof. It’s one way to avoid stumping up thousands of pounds for solar panels, but is there a catch?
In April last year, the Government introduced the long awaited Feed-in Tariff (FIT) scheme, which offers payments in exchange for generating renewable electricity.
The scheme promises good financial return. For example, for solar photovoltaics (PV), you can earn a 7-10% tax-free return, translating into £25,000 or more over the scheme’s 25-year period.
This is good news for those who can afford to buy a solar PV or a wind turbine. But what about the rest of us who don’t have £14,000 to stump up for a PV system?
Are ‘rent-a-roof’ schemes worth it?
Well, more and more companies have seen the opportunity and are offering ‘free’ solar PV in exchange for renting your roof.
The benefits are that you don’t have to put any money up front and often you’ll get to use the free electricity produced by the system. Plus, you don’t have the hassle of organising installation and the ‘rent-a-roof’ company will often cover maintenance of the system.
But what are the cons? By literally renting your roof for 25 years (the period of the FIT scheme), the company pockets the FIT payments, which means that once the investment in the system has paid itself back, all the profit goes to the company.
Which? research showed that whilst the offer of ‘free’ solar panels might be tempting, you would be financially better off paying for the PV system yourself, even by taking out a loan. Our calculations revealed that you could be up to £10,500 better off over the 25-year period with a loan.
Who pays for FIT?
FIT is paid for by a levy on energy bills. So, in effect, we’re all contributing to it. If you’re able to install renewable electricity on your property and claim FIT, then you’re benefiting from the scheme.
But what if you live in a flat? Or rent? Then you’re contributing to a scheme that you will never be able to benefit from.
Most importantly, while it might still be OK for other householders to benefit from FIT for the ‘common good’ of increasing our renewable capacity and reducing our impact on climate change; is it right that companies pocket the income?
Do you think companies should be allowed to benefit from FIT through ‘rent-a-roof’ schemes? Would you consider the FIT scheme – or would you rather invest the money yourself and buy a PV system upfront?
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