Introduction of Feed In Tariffs by Department of Energy and Climate Change
Since the introduction last year of Feed-In Tariffs (FITs) by the Department of Energy and Climate Change, a market has developed in offering Homeowners free installation of photovoltaic panels on to their roofs. The Homeowner receives free electricity and the solar panel provider obtains payment by exporting the surplus electricity generated to the National Grid. In return for the installation of the solar panels, Homeowners will be expected to enter into a lease of some or all of the roof and the air space above the panels.
- In considering entering into a lease Homeowners should have regard to the following:-
- If the Homeowner has a mortgage, the Homeowner must first check with their Lender to obtain consent before proceeding with the lease.
- A check should be made with the installer of the panels that both the installer and the equipment is accredited by Ofgem under a Microgeneration Certification Scheme (MCS);
- A check needs to be made as to how long the installer requires the right to retain the solar panels on the roof.
- A check needs to be made on what rights of entry the installer requires for the purposes of carrying out any repairs.
- Advice needs to be taken on the effect on re-sale values on the home due to the existence and terms of the lease and the presence of the solar panels and the benefits obtained from them.
- Apart from free electricity, does the installer provide any other financial benefits?
- If a rent is payable for leasing the roof space, is this to be increased over the term of the lease?
- Has the installer obtained planning permission for installation of the solar panels and where necessary, Conservation Area and Listed Building Consents?
- Does the installation of the solar panels breach any restrictive covenants affecting the home?
- What rights are there either for the Homeowner or the installer to terminate the lease at an earlier stage?
- What are the repair obligations in relation to the solar panels and the roof during the duration of the lease?
- If the installer is able to terminate the lease early, what happens to the solar panels?
- Is any compensation payable to the installer on early termination?
- Does the lease provide the installer with a right to renew the lease?
- Who pays the fees for the preparation of the lease?
There are numerous ramifications in pursuing these kind of arrangements and any Homeowner approached by an installer to enter into a lease must take advice before proceeding.