Many investors have jumped on the solar bandwagon because of the attractive levels of income guaranteed by the feed-in tariffs (FITs). Large-scale installations of solar PV panels at optimum sites can yield returns of 7-8% on capital invested. However, for many homeowners, the capital cost of the installation is the stumbling block to generating their own energy. This has led to an increasing number of companies offering to install free solar PV, in so-called 'rent my roof space' schemes.
These deals vary in the detail, but essentially the installer provides the solar panels and takes the income from the electricity generated, in the form of the FITs. In return the householder gets some 'free' electricity - i.e. any that is used on site while the panels are working. A 'win-win' situation according to the companies, or are there any catches, and what questions should the householder ask if considering such a deal?
How does it work?
Deal vary, but a typical scheme would be:
- The company pays for all the costs of installation, connection and maintenance.
- The company receives most or all income from the generation and export feed-in tariffs (e.g. £300-600 pa)
- The householder benefits from savings on electricity bills (e.g. £60-100 pa)
Level of savings on my bill?
Some companies make extravagant claims about the level of savings on electricity bills. This actual amount will depend on how much electricity is used in the house when the solar panels are actually working, i.e. during daylight hours! For a house that is generally unoccupied during the day, savings will be modest compared to a household that uses most of its electricity during the day. Estimate no more than 20% of annual consumption, and possibly less.
Key questions to ask
Anyone contemplating such a deal must look very closely at the contract offered by the company. According to Stafford-based energy consultant, Ian Owen of Active Energy, "This is a completely new market and care should be taken with regards to individual terms and conditions and the company making the offer". He sets out four key questions to ask:
- Who gets the generation tariff, the export tariff and the free electricity?
- Who owns and maintains the equipment.
- Who is responsible for insuring the equipment against damage or theft?
- Can the householder withdraw from the contract, and what are the potential penalties?
It is also worth considering what might happen if you decide to move house. Will any potential new owners be happy with the scheme? Also, what happens if the company goes bust?
Of course, in environmental terms, any scheme that increases the uptake of renewable energy generation is beneficial, by cutting carbon emissions.