FREE Solar Electricty for EVERY Village Home?

October 15, 2010 by  
Filed under Features, Top

Rent-a-roof solar

Free electricity? An 8% return on your investment indexed to inflation? Guaranteed for 25 years? It sounds like a scam but it’s not. It is true. And it is both ethical and environmentally friendly.

Since March, HI Courier’s editor has been watching this new development in the UK and investigating the possibilities for our village. “Look around you. There are thousands of roofs in our village that are perfectly suited to install solar panels. If every roof of every home was generating electricity it would be worth about £3 million per year of extra income and it would reduce our village carbon dioxide emissions by over 4000 tonnes CO2.”

Are the claims of free electricity and a healthy return on your investment indexed to inflation and guaranteed for 25 years true? Yes, indeed. You need to be careful, however, since getting the details right will largely affect the benefits you receive.

Here are the basics.  In April 2010, the Feed-in-Tariff (FiT) became law to encourage the switch from fossil fuelled to renewable electricity. Electric companies, as part of their obligation to reduce CO2 emissions, are required to pay anyone generating power from renewable sources a premium for every kilowatt hour (or ‘unit’) of electricity they generate. The first part of this programme involves the placement of solar photovoltaic (PV) panel on your roof to convert sunlight directly into standard household electricity. You are paid 41p for each unit of electricity you generate – even if you use all of that electricity yourself!  If you can’t use it then any excess generated by your solar panels it will be automatically exported to the electricity grid and you will be paid an additional 3p per unit for doing so – bringing the total to 44p. If you do use it all yourself, you still get the 44p per unit and save an average of 14p per unit on the electricity you didn’t have to buy from the power company – meaning that each unit of electricity you generate has a value of over 58p.

Two questions immediately come to mind:

1. Is it legal?  The answer to the first is yes – it’s the Law. The payments you receive come from monies collected by electric generating companies. Once you enter the programme, your return is guaranteed by law for 25 years.  It cannot be changed or altered by the actions of future governments.  We’re told that many investment funds, especially pension funds, are having a serious look at this.
2. How much does it cost?  The answer is All or Nothing. To get the maximum benefit you need to invest between £12,500-£14,000 for the typical semi-detached house to install solar panels and connect it to your home electricity supply.  The monetary return over 25 years is about 8%, or approximately £1,000 gross income per annum.

Investing such a large amount is out of the question for most people in these hard economic times.  So for many of us the ‘NOTHING’ option may be better.  This involved renting your roof to a company who will install and maintain solar panels at no cost to you.  They get to keep the FiT which pays for their capital outlay, upkeep and insurance while providing a reasonable return for their investors.  You get to use the electricity those panels generate for FREE.  That’s typically worth between £250 and £500 per year depending on the size of your roof and how much you are able to use during daytime hours when the sun is shining.  With most plans you are also paid for any electricity exported to the electricity grid; although this is a relatively small amount of money (about 3p per unit) it is money for free.

If it still sounds too good to be true, you may be comforted by the fact that a lot of large players, like British Gas, are entering the fray. But there is a catch. This programme is due for review in 2013, so the maximum benefits are only guaranteed if you sign up and install your solar panels before the end of 2012. If you were to enter the programme in December 2012 your FiT payment levels will be guaranteed until December 2037. Given the huge demand this programme has generated already, it makes sense to begin your own investigation as soon as possible to see if this is right for you.

It should be noted that some companies and organisations that either install bespoke solar electric systems, or have close ties to those who do are less that happy with the competition offered by the rent-your-roof alternatives. From our research, the caveats they raise are not issues at all.

As with most opportunities, the devil may be hidden in the details.  That’s why several villagers have come together to form an ad hoc energy co-op under the watchful eye of the HI Courier’s editor.  They will be tasked with digging deeply into the details to get the best deal for village residents. As with any co-op the best deals come with larger volumes. For example, if there are 100 residents interested in purchasing systems or renting their roofs, we are likely to get a better deal that a single homeowner going on their own.  The programme is also available to businesses, schools, local government and others. These stand to gain the most since they use large amounts of electricity during the daytime hours when the sun is shining. 

To register your interest (no obligation), please email solarpanels @ hicourier.co.uk giving your contact details.

A big 'thank you' goes to Hollyoak Veterinary Surgery in Impington for their financial and technical support. Without it this website would not be possible.

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