How to buy solar panels Free solar panels

Solar panels on a roof

Solar panels can cut your bills and carbon footprint - but they are expensive to install

Companies promising you free solar panels sound like a great idea, but are these schemes too good to be true? 

Which? takes you through the pros and cons of free solar panel schemes, and gives you advice on what your options are if you can't afford to buy solar panels outright.

How do free solar schemes work?

'Free' solar panel schemes, also known as rent-a-roof schemes, are run by companies eager to cash in on the feed-in tariff (FIT). This guarantees payment in return for electricity generated using renewable technologies, including solar power. You can find out more by clicking feed-in-tariff.

These companies offer to lease your roof for 20-25 years and, in exchange, install and maintain solar PV panels on it. This means you do not have to find any cash upfront for the panels and you benefit from the free electricity produced by the system. 

Companies that offer rent-a-roof schemes include HomeSun, A Shade Greener, Isis Solar, and more. 

What's the catch with free solar panels? 

While you do benefit from the free electricity the system produces for your home, the rent-a-roof company usually takes all of the generation and export tariff payments paid out under the FIT scheme.

When the FIT rate was at its highest, back in 2011, we calculated you could be missing out on as much as £23,000 from the FIT for a 4kWp system. However, you would also have saved more than £5,000 over 25 years from the electricity produced by the panels. 

  

Notes on the illustration: Figures calculated using the Energy Saving Trust's Cashback Calculator and based on the old higher rate of FIT, on a roof with optimal orientation and tilt, and no shade. The illustration does not include price variation, inflation, panel degradation or cost of a new inverter. Actual profits could therefore be lower. This graphic is provided for illustrative purposes only, not as an investment guide.

 

Now, with FIT rates much lower, the difference is not as great. So fewer companies are in the market to offer free solar panels.

If you want to know how much you could potentially earn through solar panels and how they compare to other investment options, see our guide to is solar PV a good investment?

Should you take out a loan instead?

Predictably, the rent-a-roof companies stand to benefit far more from the arrangement than householders. Which? research has found that, on the previous rate of FIT, consumers could save thousands of pounds over the next 25 years by buying their own solar PV system instead of signing up to a scheme offering 'free' solar panels. 

If you can afford it, you should consider buying the solar PV system upfront. Even if you had to take out a loan for part or all of the system, you might still be better off in the long run.

For more information about personal loans, including details of the cheapest loans on the market, click personal loans.

Should you remortgage your home?

If you've done your research and analysis to decide that solar panels are definitely right for your home and you can't cover the cost through your savings, you could consider remortgaging your home. However, make sure you weigh this up against other funding methods, including loans, to see which offers you the best deal.

You will also need to bear in mind that you may not be accepted, so you shouldn't rely on this method of funding. And, of course, you will need to consider whether it's worth paying potentially higher mortgage interest payments, after working out what you can reasonably expect to earn from the FIT and any potential savings you can make on your energy bills once you've installed solar panels. 

You can find out more about remortgaging with the help of our expert guide on remortgage deals.

Are rent-a-roof schemes a good option?

They are worth considering if you can't afford the upfront cost of a solar PV system and don't want to take out a loan. 

Like all solar PV systems, they're best if you're at home during the day (when the sun is shining) or you're happy to change your lifestyle to make the most of the free electricity in the daytime. For example, you could install a timer switch on appliances (such as dishwashers, dryers, etc) so they run during the day and not all at the same time.

Don't pay your energy company more than you should. Check that you're on the best energy deal for your home by using our independent switching site Which? Switch.

What am I signing up to with free solar panels?

You are entering into a lease contract with the company, renting out your roof to someone else for 20-25 years. We analysed a contract from one rent-a-roof company and found issues with liabilities and provisions very much in favour of the company.

  • The contract we saw stipulated that the householder would have to get consent during the term of the lease if they wanted to sell their house or make any alterations or additions to the building near the solar PV system. This clause would apply to a loft conversion. 
  • If you need the panels to be removed for a period - to do maintenance work on the roof, for example - you'd have to compensate the company for the missed FIT payments.
  • If you wanted to sell your home within the 20-25-year lease period, you will have to find a buyer who is happy to take on the lease for the remainder of the contract as it will stay with the house. 

What do I need to watch out for?

We recommend that you get independent legal advice on the details of the contract. You should consider who owns the system, what happens if you want to end the contract early, who is liable for damage, who pays for insurance, upkeep and repairs, and what happens if you move house. 

The Renewable Energy Consumer Code provides a list of information on its website that consumers should expect to be provided by companies offering a rent-a-roof scheme. It's certainly worth having a look at before signing up to any contract.

Why are free solar panel schemes unfair on all consumers?

FIT is paid for by you - all electricity customers pay a small levy on their bill to fund the scheme, and in its first year more than £10m was paid out. Rent-a-roof schemes mean that 'free solar' companies pocketed a chunk of that cash.

Which? thinks that the profits from rent-a-roof schemes should be shared more fairly between the rent-a-roof company and the householder. We are also concerned that cash intended for householders is going elsewhere. 

If you want more information on solar panels, including how they work and what you need to know before installing them, see our guide to how to buy solar panels.

More on this...