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A bright idea

23 November 2011

A bright idea………

 

With more and more solar panels appearing on roofs around the UK we decided to delve a little deeper into the current solar energy debate around photovoltaic (PV) solar panels and find out what's really in it for home owners.

 

We found three great reasons to seriously consider solar energy for your home:

  • CUT your bills AND get paid for the electricity you generate: Sunlight is free, so once you've paid for the initial installation your electricity costs will be reduced. The Government’s Feed-in Tariffs pay you for the electricity you generate, even if you use it.
  • SELL electricity back to the grid: If your system is producing more electricity than you need, or when you can't use it, you can sell the surplus back to the grid.
  • REDUCE your carbon footprint: Solar electricity is a green, renewable energy, which significantly reduces your personal Carbon Dioxide (CO2) emissions. A typical home solar PV system could save over a tonne of CO2 per year.

 

There are two types of solar panels: photovoltaic (PV) which produce electricity and thermal which produce hot water. Photovoltaic panels are a hot topic at the moment, particularly with upcoming Government proposals to reduce the Feed-in Tariff paid for generating electricity. You will get paid for both the electricity you generate that you use, and also the electricity you don't use and export to the grid. Caution should be given though as potential changes to tariffs may make your installation less economically viable.

 

So what are your options?

There are two schemes available to homeowners. With a straight up investment the responsibility for the purchase, installation and maintenance is that of the homeowner and all income generated is kept. Alternatively with the "rent a roof" scheme the homeowner leases roof space to a PV panel provider who then claim the Feed-in Tariff for themselves, whilst allowing the homeowner to receive some free electricity.

 

There are legal considerations that must also be taken into account with the rented roof space schemes as it involves the PV panel provider effectively leasing the space above the roof, with many leases running for up to 25 years without break clauses. Homeowners can be left tied into agreements which, if not careful, can be a breach of their mortgage arrangement, consequently discouraging prospective purchases. The Council of Mortgage Lenders (CML) has produced guidance and minimum requirements that a PV panel provider should follow.(1)  You should seek advice as to whether planning permission approval, building regulations and/or structural alterations/improvements are needed.

 

Other things to consider are possible future changes to the Feed-in Tariff, as this will see the income generated change and potentially extend the payback period. However, the Government states that the rate is set for 25 years, but reviewed to be kept in line with inflation and adjusted as technology gets cheaper.

 

So, which is best?

It all depends on your current situation. Owning the panels yourself is less restrictive and could add a premium to your property due to the income that can be generated. The rent a roof scheme means no cost to you personally, and it will provide you with cheaper electricity.  But don't take our word for it – with the number of installers and providers going through the roof, getting a quote or comparison for your home couldn't be easier.

 

 

Colleys – the Property Experts

 

 (1) http://www.cml.org.uk/cml/filegrab/cml-bsa-guidance-and-minimum-requirements-regarding-leases-of-roofspace-for-fitting-photovoltaic-solar-panels.pdf?ref=7836

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