When the huge subsidy payments were first introduced, we could see how installing solar panels might make sense if you paid for them yourself.
If you did, you would see a fall in your energy bills and you would get to sell energy you couldn’t use back to the grid. The whole thing would have made you a tax- free and inflation-linked return of about 10% a year.
However, we really couldn’t see how it would make much sense if you used one of the rent-a-roof companies to put a panel up for you. Sure, you might save around £70 a year on your bills. But we were concerned that having panels on your roof might hit the resale value of your house. It turns out that we hadn’t even begun to realise the extent of the potential problem. John and Rebecca Welton had panels installed on their roof by a firm called My Energy Station (MES). MES was to pay for the panels and harvest the astonishingly generous feed-in tariffs. The Weltons were promised free electricity from the panels during daylight hours (apparently around £150 worth). Their mortgage provider okayed the deal. But then they tried to remortgage on to a cheaper deal with the Skipton Building Society. No go. Skipton told their broker it won’t offer mortgages on houses with a solar lease in place. It was the same story everywhere else they tried.
The whole thing has turned out to be a nightmare for the Weltons. And a very expensive one at that: according to a representative of My Energy Station, the couple can buy out of the scheme for £15,000, which would solve the problem. Perhaps it would, but I can’t help but think that if the Weltons had had £15,000 to spare in the first place, they would have been unlikely to hand over the rights to their roof and the sun above it for 25 years for a mere £150.
Rooftop solar panel leasing can be an attractive option for homeowners who want to adopt renewable energy without the upfront costs of purchasing and installing solar panels. However, it’s important to weigh the pros and cons before deciding if leasing is the right choice for you. Let’s explore the advantages and disadvantages of rooftop solar panel leasing:
Pros of Rooftop Solar Panel Leasing:
- Lower upfront costs: One of the significant benefits of leasing solar panels is the reduced upfront cost. Instead of paying the full price for the solar panels and installation, you typically pay a fixed monthly lease payment, making it more affordable for homeowners who may not have the immediate capital to invest in solar.
- Maintenance and warranty coverage: When you lease solar panels, the leasing company is responsible for maintenance, repairs, and warranty coverage. This can provide peace of mind, as you won’t have to bear the costs or hassle of maintaining the panels yourself.
- Immediate energy savings: By installing leased solar panels, you can immediately start saving on your energy bills. Solar energy generated by the panels offsets the electricity you would have otherwise purchased from the grid, reducing your reliance on traditional energy sources.
- No ownership responsibilities: Since you don’t own the leased solar panels, you are not responsible for system performance, upgrades, or eventual replacement. This can be advantageous for homeowners who prefer a hassle-free approach to solar energy.
Cons of Rooftop Solar Panel Leasing:
- Long-term financial commitment: Leasing solar panels typically involves signing a long-term contract, typically ranging from 15 to 20 years. Breaking the lease prematurely can incur significant fees. This lack of flexibility may not align with homeowners who have plans to sell their property or who anticipate changes in their energy needs.
- Limited financial benefits: While leasing can result in immediate energy savings, you won’t benefit from incentives like the government’s Feed-in Tariff scheme or receive income from exporting excess energy to the grid. These financial incentives are typically reserved for homeowners who own their solar panels outright.
- Limited customization options: Leased solar panel systems are usually standardized and may not offer customization options to meet specific energy needs or aesthetic preferences. If you have specific requirements or design preferences, leasing may not provide the flexibility you desire.
- Potential ownership transfer challenges: If you decide to sell your home before the lease term ends, transferring the solar panel lease to the new homeowner can present challenges. Prospective buyers may be reluctant to assume the lease agreement, potentially limiting your pool of potential buyers.
- Long-term cost implications: While leasing solar panels can result in immediate energy savings, it’s important to consider the long-term cost implications. Over the lease term, the cumulative lease payments may exceed the cost of purchasing a solar panel system outright, meaning you may end up paying more in the long run.
Conclusion:
Rooftop solar panel leasing offers certain advantages, such as lower upfront costs, maintenance coverage, and immediate energy savings. However, it also comes with drawbacks, including long-term financial commitments, limited financial benefits, and potential limitations on customization and ownership transfer. Before deciding on leasing solar panels, it’s crucial to evaluate your long-term goals, financial situation, and personal preferences. Consider comparing the costs and benefits of leasing versus owning a solar panel system to make an informed decision that aligns with your specific needs and circumstances.
Q: What is rooftop solar panel leasing?
A: Rooftop solar panel leasing is a contractual agreement between a homeowner and a solar leasing company, where the homeowner agrees to lease and use solar panels installed on their roof in exchange for regular lease payments.
Q: How does rooftop solar panel leasing work?
A: In rooftop solar panel leasing, the leasing company installs and maintains the solar panels on the homeowner’s roof. The homeowner benefits from the solar energy generated by the panels, which offsets their electricity consumption. In return, the homeowner pays a monthly lease payment to the leasing company.
Q: What are the advantages of rooftop solar panel leasing?
A: Some advantages of rooftop solar panel leasing include lower upfront costs, as the homeowner does not need to pay for the purchase and installation of the panels. Leasing also provides hassle-free maintenance and repair services, and immediate energy savings without the need for ownership responsibilities.
Q: Can I save money with rooftop solar panel leasing?
A: Yes, rooftop solar panel leasing can result in energy savings. By using solar energy, homeowners can reduce their dependence on the grid and lower their electricity bills. However, it’s important to consider the lease payment and compare it to the potential savings to ensure it’s a cost-effective option.
Q: Are there any downsides to rooftop solar panel leasing?
A: Some downsides of rooftop solar panel leasing include long-term financial commitments, limited financial benefits compared to owning the panels, potential limitations on customization options, and challenges when transferring the lease to a new homeowner if the property is sold.
Q: Can I buy the leased solar panels later?
A: In some cases, leasing agreements may provide an option to purchase the solar panels at the end of the lease term. However, the terms and conditions can vary, so it’s important to review the leasing agreement or consult with the leasing company for specific details.
Q: What happens if I want to terminate the lease early?
A: Terminating a rooftop solar panel lease before the contract ends can result in penalties or fees. It’s crucial to review the lease agreement and understand the termination clauses before entering into the lease to avoid any potential financial implications.
Q: Do I still benefit from government incentives with rooftop solar panel leasing?
A: In many cases, homeowners who lease solar panels do not directly benefit from government incentives, such as feed-in tariffs or tax credits. These incentives are often reserved for homeowners who own the solar panels outright. However, the leasing company may indirectly benefit from such incentives, which can be reflected in the lease terms.
Q: Is rooftop solar panel leasing available for commercial properties?
A: Yes, rooftop solar panel leasing is also available for commercial properties. Businesses can lease solar panels to reduce their energy costs and promote sustainability without the upfront investment required for purchasing and installing the panels.
Q: How can I determine if rooftop solar panel leasing is right for me?
A: To determine if rooftop solar panel leasing is the right option for you, consider factors such as your financial situation, long-term goals, duration of stay in the property, expected energy savings, and willingness to take on ownership responsibilities. It’s advisable to compare leasing options, evaluate financial implications, and seek advice from solar experts or financial advisors to make an informed decision.