Are ‘Free’ Solar panels -Free?
As part of their efforts to hit the country’s carbon reduction target (80% lower than 1990 rates by 2050), the Government introduced the Feed in Tariff (‘FIT’) Scheme in April 2010. As an alternative to the previous grants scheme, the innovative FIT Scheme gave everybody the opportunity generate home-generated electricity (from environment friendly sources of energy) and then sell on that electric power to the National Power grid who would pay the home owner a Feed in Tariff.
The FIT Scheme created an opportunity whereby businesses can provide solar power systems to those that own their own property cost-free covering the cost of installation and the maintenance of the panels by just collecting the Feed in Tariff directly from the National Grid.
The actual offer is simple – the property owner gain from totally free energy made by the solar power panels – anything you don’t use for the running of the household is distributed by the solar energy company to the National Grid which covers the expense of the installation and maintenance of solar panel systems. There it is- free set up, absolutely free servicing, cost-free energy!
The FIT Scheme has created an huge increase in the installation of solar panels resulting in a 900% increase in solar energy system installations across the solar energy industry.
Are ‘Free’ Solar panels in real terms -Free?
The cost of the Feed In Tariff system is accounted for by the National Grid by by an increase in everyone’s existing electricity bills – this means that you and all other homeowner in the country is actually investing in the Feed in Tariff Scheme.
• The energy created with the solar panel systems is most likely to be produced during the hours of sunlight and cannot be preserved. If you are not in the home in the daytlight, you, the home owner the will be unlikely to be making use of the electrical energy – it will just about all be sent to the National Grid as acquiring income for the solar panel installation company without any reward the householder
• The installing of the solar panel systems may effect the marketability or saleability of your home. The feed in tariff lease is usually for a term that is at least 25 years or so. Your home will therefore effectively be subject to a sitting tenant, the tenant being the solar panels.
• You have to consult with a Surveyor, whether or not the main roof structure is capable of enduring the the burden of the Solar panels and that the method of fixing the solar panels to the roof to be used is not going to lead to further problems for instance water ingress. Even though installing contractor will perform a survey, you have to remember that this is for their particular needs and will most likely focus on criteria for example whether or not the Solar panel systems are likely to recieve enough direct sun and also whether they are likely to be able to connect to the National Grid successfully. It is not likely that the solar panel installation contractor will take responsibility should the solar power systems cause damage to the structural parts of the home.
• Most solar panel installations could possibly be exempt from the requirements of the need to obtain formalized planning authorization as it is usually a permitted development right but this depends on the circumstances and planning history of the home. This may be a particular issue in cases where the residence is a listed building or within a Conservation Area.
• If your home is Leasehold, you’ll need the permission of the freeholder prior to going ahead with a Feed In Tariff Scheme. You will have to examine your lease as to whether or not you have the legal under the terms of the lease to grant a underlease in cases where you do have the right, it’s likely that the landlord will need to permission.
A standard Feed In Tariff Scheme lease for a house will include a warranty by you that you’ve got the necessary legal rights so that you can grant the lease and that all third party consents that are required have been obtained. Furthermore you’ll have to warrant that there are no restrictions on the title that would stop the installation or functioning of the solar power systems and Feed in Tariff Scheme.
In the event you sign the Feed in Tariff Lease without looking at this thoroughly and it transpires that you do not possess the necessary legal rights and consents to grant the Lease, and consequently the Lease has to be terminated prematurely, you may find yourself owing the installing contractor a lot of money for the cost of the installation and removing the solar power systems plus the loss of earnings that could have been created.
• Generally, residential mortgage loans bar lettings without the express consent from the mortgage lender and this will take a long time to get.
The mortgage lender is likely to be worried about the effect the solar power panels and in particular simple fact of the Feed In Tariff Lease, can have on the house’s value. While a few prospective buyers could see the solar panels as a bonus simply because of the free electricity other people will see the solar power systems as being aesthetically displeasing and also the Feed In Tariff Lease an undesirable burden on the title deeds.
The mortgage lender might be more at ease in cases where the Feed In Taiff’s lease includes a clause wherein it may be terminated early (a break clause), so that, should it really need to repossess and sell, it can do so without the encumbrance of the Feed In Tariff’s lease. This kind of break provision has to be evaluated in the light of any financial penalty which may accompany the early termination of the lease and whether the installing contractor could be made to remove solar power panels when the lease comes to an end.
• You will probably be conscious of the point that the level of electricity produced can vary and cannot be guaranteed because of the the weather. Nevertheless, an additional factor that may well effect the reliability of the electrical power created is incorporated in the terms of the Feed In Tariff Lease. Many standard Feed In Tariff Leases have a break clause that allows the installing solar energy contractor to bring the Feed In Tariff Lease to an end before time even where the Residential solar panels are creating enough energy for you.
However, if most of the electrical power produced is being utilized by you, the property owner and there’s too little excess power to transfer to the National Grid, the installing solar panel contractor is not going to collect Feed In Tariff payouts and could consider the Feed In Tariff Lease and no longer being advantageous especially as they will nonetheless be liable for the upkeep of the solar panels; or perhaps the level of surplus power may be such that the Feed In Tariff payouts do not cover the installing contractors initial capital expenditure. The controversy will be over what level of electricity creation is considered to be ‘sufficient’ as well as just what legal tests to use.
And so, for your ‘Free’ Residential solar panels , you pay extra on your energy bills which have been increased to enable the National Grid to to raise the necessary funding for the Fit Scheme, for electricity that you don’t utilize because you are out earning a living to generate the income to cover your elevated energy bills! You, the property owner decrease the value of your house as well as run the risk of creating expensive structural problems for the roof; you might be breaching the planning legislation and might face enforcement action and in the event that your property is leasehold – may lose your house if your lease is forfeited on account of you subletting without approval! If you have a mortgage loan you may upset your mortgage lender who may consequently choose to bring the mortgage to an end as a result of infringement of the mortgage terms and repossess the house or you may end up having to pay large sums to the solar panel company to bring the FIT lease to an early end to comply with your lenders instructions and avoid repossession. BARGAIN!