With the introduction of Feed in Tariffs, the installation and promotion of Solar PV has shifted from an activity based on saving or generating energy to one of making as much money as possible. As long as this results in the generation of renewable energy perhaps this isn’t such a bad thing, however the watchword remains, “Buyer Beware”.
The latest solar related leaflet to come through my door is promoting solar leasing, outwardly it looks like a great idea, certainly it promotes a way of making money – incidentally generating energy – that seems to be easy and risk free.
The premise is: The lease is X (stated per month so it looks small) the income is Y (stated per year so it looks big) and all you need is to have a load of solar panels on your roof.
But, when reading the small print and comparing the costs and income, the free money premise becomes rather suspect.
The promo I received includes a fairly standard 12 panel system generating a nominal 2.1kW being sold at £13,000. Okay, its at the top end of the prices normally quoted but not that bad.
This has an annual saving and income stated as being £980 with a monthly lease of £62 spread over 10, 15 or 20 years (its unstated as to which applies) also a 2% increase per year or rpi whichever is higher. Also there is an up front fee of £1,500.
On the website (associated with the brochure) it then goes on to say that at the end of the lease period a new lease could be contracted or the equipment removed – at your cost. So you never own it!
Now, £62 per month is of course £744 per year which allows for a nominal profit of £236 if all goes according to plan, ie sufficient sunny days.
To be on the safe side, lets drop that to a more realistic £900 savings / income and FIT over the course of the year, some people would claim even that was too high. Now we have an annual saving / income of approx £150. Sounds okay?
But what about the £1500 up front payment? That’s the first 10 years just to pay off the deposit, ie for the first 10 year lease you’ve made nothing.
For a 20 year lease, the first 10 years is spent paying off the deposit, then you might get £1,500 by the time the 20 years is up (okay there is inflation etc. but also increases in the lease cost, they might cancel each other out) lets deal with known numbers.
At the end of the lease its time to remove the solar panels – at your cost, after all this isn’t an HP agreement its a lease, you have never owned the panels. Removing them might well cost £1,500 or more, your roof must remain in good condition. Or you could enter into a new lease and start again?
Think long and hard about a lease. In particular if you might move house during the period of the lease, the new owner might not want such a deal hanging over them so it would then be up to you to finish the lease at the terms stated by the owner of the solar panels that are on your roof.
And consider insurance, even though you don’t own the panels, they are your responsibility.
Filed under: feed in tariff, microgeneration, solar electricity, solar energy, solar lease, solar scam, Uncategorized | Tagged: income from solar panels, solar energy lease, solar lease, solar pv lease |