What is Wrong with Free Solar Panels?
Now that the FiTS mess has been mostly sorted out and there’s some certainty about the future of the tariff program, you’re likely to see another uptick in adverts for solar PV systems and solar panels for your roof. There’s no question that a solar energy system is a hefty up-front investment – a 3kWp system, the most common size installed on residences, will run between L7,000 and L10,000.
Given the cost, it may be tempting to buy into one of the “free solar panels” deals, where a company offers to foot the cost of installing your solar PV system in return for the right to collect the FiTS tariff in your name. This is almost always a bad idea for a number of reasons.
Potential Loss of Income
The most obvious disadvantage of installing solar panels through a rent-a-roof scheme is the amount of money you miss out on. While the FiTS has been reduced considerably from its original 43.3p rate, it will still provide a healthy return on investment over the 25-year lifetime of the scheme. Even at the reduced 21p rate, a 3kWp solar PV system will return a profit of between L23,000 and L35,000, depending upon the installers and solar panels you choose. That’s pure profit, in addition to the actual payback on the system. The FiTS has the potential to provide payments of about L1,000 pa – tax-free.
Now, of course, if you have to take out a mortgage to cover the cost of your solar panels, you have to deduct the interest payments from the listed profit, but you still end up earning back considerably more when you buy your solar PV system outright than when you give in to the temptation to get something for nothing with a free solar panels scheme.
Insurance and Liability
A careful read of the contracts signed with these dodgy rent-a-roof companies generally reveals that they don’t take responsibility for much of anything. The promise of free maintenance on your solar panels sounds good until you consider that the actual cost of maintenance on a solar PV system is next to nothing. The only real ongoing maintenance solar panels require is a hose-down a couple of times a year and, at some point in the 25-year lifespan, you’ll have to replace the inverter on the system at a cost of about L1,000.
On the other hand, the contracts generally assign the cost of any repairs needed to your roof because of shoddy installation practices to you. And since the company isn’t liable for damage to your roof, they have little incentive to use the best practices for installing your solar panels.
Moving Houses
Selling your house may be difficult if it’s encumbered with a 25-year roof lease. The commitment can scare off many potential buyers, and the legalities of working out the buyers’ contract with a third party involved can add considerable cost and complexity to the process.
On the other hand, a fully-owned solar PV system on your home can be a major selling point. You can entice buyers with the promise of lower electricity bills and a transfer of the FiTS certificate to them upon purchase. The potential monthly income from solar panels can be a major incentive for buyers if you decide to sell. You’ll lose that incentive if you’ve opted up for “free” solar panels.
In general, “free” solar panels may not always be a dodgy proposition, but buying a solar PV system outright is always a better deal.
Chris Robertson is an author of Majon International, one of the world’s MOST popular internet marketing companies on the web.
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