How to buy solar panels 'Free' solar schemes

With the introduction of the feed-in tariff (FIT), 'free' solar schemes have been quick to appear. But is this too good to be true?

What's a rent-a-roof scheme?

'Free' solar schemes, also known as rent-a-roof schemes, are run by companies eager to cash in on the feed-in tariff. For example, the following companies currently offer rent-a-roof schemes: Homesun, A Shade Greener, Freesource Energy, Isis Solar and more. But they might review their 'free solar' offers as the proposed cuts to the FIT are going ahead.

These companies would lease your roof for 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. 

What's the catch? 

While you do benefit from the free electricity the system produces for your home, the rent-a-roof company generally takes all of the generation tariff and the export tariff (see illustration in our guide to the feed-in tariff). We calculated that, on the old rate of FIT, for a 4kWp system, while you could be saving more than £5,000 over 25 years from the electricity produced by the panels, you could be missing out on as much as £23,000 from the feed-in tariff. But these savings will change if the proposed cuts to FIT are implemented.

Solar pigs diagram

You will make more money buying the solar panels upfront than signing up to a 'rent-a-roof' scheme

Taking out a loan instead

If you can afford it, you should consider buying the 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.

Predictably, the companies stand to benefit far more from the arrangement than householders. Which? research has found that, on the old rate of FIT, consumers could save thousands of pounds over the next 25 years by buying their own solar photovoltaic system instead of signing up to a scheme offering ‘free’ solar panels. We calculated that, for a 4kWp system, while you could be saving more than £5,000 over 25 years from the electricity produced by the panels, you could be missing as much as £23,000 from the feed-in tariff. See our story ‘Free’ solar panels not such a great deal for more.

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.

Are rent-a-roof schemes a good option for anyone?

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 so they run during the day.

What am I signing up to?

The other issue with rent-a-roof schemes is the small print. You are entering into a lease contract with the company, renting out your roof to someone else for 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. For example, the contract we saw stipulates 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, you'd have to compensate the company for the missed feed-in tariff payments.

And if you were to sell your house within the 25 years, bear in mind that the contract will stay with the house and you will have to find a buyer who is happy to take on the lease for the remainder of the contract. Would you buy a house with a roof that was being rented out? It has also been reported that some mortgage suppliers are refusing to provide mortgage for houses with a rent-a-roof solar contract attached to it.

What do I need to watch out for?

We recommend 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. Also beware that some mortgage providers might refuse to give a mortgage on houses with a rent-a-roof solar contract attached to them.

Consumer Focus has published a guide to feed-in tariffs which includes a comprehensive checklist of questions to ask the company if you are considering a rent-a-roof scheme. See pages four and five of its guide to microgeneration.

Renewable Energy Assurance Limited (REAL) provides a list of information on its website that consumers should expect to be provided by companies offering a rent-a-roof scheme. It is certainly worth having a look at before signing up to any contract.

Why is it 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. 

And we're all paying for the feed-in tariff : the Department of Energy and Climate Change has estimated that by 2020 we'll be paying £11 a year towards the scheme through our bills. We’ve asked the government to tighten it up to make it fairer.

Solar panels live Q&A

Replay our solar panels live Q&A

Our team of experts were inundated with questions from homeowners considering their solar options during our live Q&A, covering everything from energy savings and feed-in tariffs to installation, inverters and maintenance.

Missed it? You can rewind and replay all the action at Which.co.uk/solarlive.

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