Solar PV panels are able to provide you with significant savings on your electricity bills and as a renewable energy source they don’t release carbon, or any other harmful pollutants, into the atmosphere. There are clearly many advantages to having them installed; the only drawback for homeowners is the initial solar panels cost. Due to an upsurge in demand, prices have been falling, and yet at the time of writing, the average cost for solar PV installation is in the region of £7,000.
This is a significant amount of money that many people would need to take out a loan to cover, so it seems incredible that many solar panel companies are now offering to install solar panels for free. The panels themselves as well as the labour of fitting them to your roof can all cost absolutely nothing. So, how can they do this and what’s the catch?
Are free solar panels really free?
In the sense that you will never have to pay anything to the company from your own purse, then the answer is yes, they are free. However, that doesn’t mean to say the solar panel company won’t be making money from you. It works like this: the government offers a Feed-in Tariff (FiT) to people for generating electricity with solar PV panels. It is one of a few incentive schemes the Department of Energy and Climate Change (DECC) has implemented in order to encourage the take-up of renewable energy sources.
FiT will pay for the electricity produced for a guaranteed period of between 20 and 25 years. The price per kilowatt of energy is index linked, which means that it will rise along with the retail prices index measure of annual inflation.
At the current rate, a homeowner with solar PV panels can make in the region of £600 per year from FiT. This could cover the initial cost of installation in about 10 to 12 years, allowing for inflation. Thereafter, the homeowner is assured of receiving FiT for another ten years or so. If a solar panels company installs PV panels for free, they will do so in an arrangement that ensures it is they who receive the Feed-in Tariff and not the homeowner.
In the long term they stand to make a considerable profit from energy that is produced by the solar panels they have installed on the homeowner’s roof.
Is it a good deal?
Whether this is a good deal for you depends on your financial situation and how important it is to you to be using solar energy. Clearly, to make the most profit from FiT, the best way is to pay for the solar panels upfront and in full. However, if this is not possible and if you enter into the deal fully aware of the long term implications, knowing that you will not be receiving money from FiT, then it can be good deal as it provides you with free solar panels and lower electricity bills as a result.
If however, you are hoping to benefit from FiT in some way, there are other possibilities available to you. One option is the Green Deal, in which the government contributes towards the cost of installation and is paid back via your energy bills. The DECC is currently promoting a scheme in which homeowners can receive up to 37% of the cost of solar PV installation and also benefit directly from the Feed-in Tariff.
One thing to remember is that solar panels are becoming more and more popular and, as a result, the prices of the units themselves are falling steadily. If you are thinking seriously about getting solar panels installed, don’t latch on to the first seemingly amazing offer that comes along. Do your research, and make sure that you get at least three quotes from reputable MCS-certified suppliers before deciding on a package. There is a chance you could make not only savings, but also considerable profits.