How to Buy Solar Panels
Free Solar Panels
By Sarah Ingrams
Article 6 of 6
Free Solar Panels
Companies promising you free solar panels seem like a great idea, but read on to find out if free solar panel schemes are too good to be true.
If you're thinking of getting free solar panels, then keep reading. We tell you what you need to know about free solar panels.
Are free solar panels a good idea? We take you through the pros and cons of such schemes, and give you advice on what your options are if you can't afford to buy solar panels outright.
How do free solar panels 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.
These companies offer to pay to lease your roof from you for 20-25 years and, in exchange, they will install and maintain solar PV panels on it. This means you don't have to find any cash upfront for the panels and you also benefit from the free electricity produced by the system.
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. You can find out more about the FIT - see our guide to the Feed-in Tariff.
When the FIT rate was at its highest, back in 2011, we calculated that 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 Feed-in Tariff, 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 the FIT rate much lower, the difference is not as great. So few 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 with other investment options, see our guide to whether solar PV is a good investment.
Should you take out a loan to pay for solar PV 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 paid by the 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.
Our guide to personal loans explains what personal loans are, how to get them, the pros and cons, and allows you to search the best rates on the market.
Should you remortgage your home?
If you've done your research and analysis, and decided that solar panels are definitely right for your home but you can't cover the cost through your savings, you might 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'll also need to bear in mind that you may not be accepted, so shouldn't rely on this method of funding. And, of course, you'll need to consider whether it's worth having potentially higher mortgage interest payments after working out what you can reasonably expect to earn from the FIT scheme and any potential savings you can make on your energy bills once you've installed solar panels.
Are rent-a-roof solar panel 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) so you can make the most of the free electricity in the daytime.
An easy way to cut your energy bills is to check that you're on the best energy deal for your home. Use our independent switching site Which? Switch to search for a cheap energy deal.
What am I signing up to with free solar panels?
If you do decide to rent your roof out, you ought to be fully aware of what you're getting involved with: 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 that were 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 the panels needed to be removed for a period of time – to do maintenance work on the roof, for example – the householder would have to compensate the company for the missed FIT payments.
The lease stays with the property. So bear in mind that if you have free solar panels installed and want to sell your home within the 20-25-year lease period, you'll have to find a buyer who is happy to take on the lease for the remainder of the contract.
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.
The Renewable Energy Consumer Code provides a list of free solar PV system information on its website that consumers should expect to be provided by rent-a-roof scheme companies. It's certainly worth having a look 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. In 2015/16, more than £1.1bn 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're also concerned that cash intended for householders is going elsewhere.