A to B 80, October 2010
My mum has recently seen details of a company called ‘Homesun’ who offer to install solar power on your roof for free, you get any electricity you use for free, but they get the feed-in tariff. My mother is both very environmental, and not very well off, so this seems like a potentially good deal for her. On the other hand it is a 25-year contract, and although you can buy yourself out, it is straight-line depreciation, that is to say you have to pay half of the cost after 121/2 years and so on. Realistically my mother may not be alive in 25 years!
Do you know anything about this company, or this sort of scheme in general? She would have to pay £100 for a survey, which is refunded if you go ahead, but is not refunded if they say your roof is not big enough, or that there are issues of shading etc that mean they’re not very keen on your roof. So it could be a scam to get £100 out of lots of vulnerable pensioners, or it could be a perfectly bona fides scheme. Equally, if the feed-in tariffs are super, super generous, then it might be more sensible for me to pay £15,000 to have such a system installed on my mum’s roof, and to collect the feed-in tariff myself! I think her roof is about 26 square metres, and is close to south facing (slightly east, but not by more than 20°). Homesun would fit 18 square metres of solar panels.
John Wilson
Southend
Inevitably, with the arrival of the generous new ‘feed-in’ tariffs for small solar power generators, commercial companies have seen an opening, and these schemes have caused a flurry of interest, HomeSun and others being overwhelmed with enquiries. Basically, the company puts a solar PV system that would normally cost £15,000 on your roof at no cost to you, but keeps the feed-in payment, currently worth 41.3p for each Kwh generated, plus 3p for each Kwh exported to the grid. Commercially, the company is in a win-win situation. It will have to borrow a lot of money initially, but not as much as you, because it’s fitting the systems at cost price, yet taking advantage of a grant system designed to encourage individuals paying a full market price for the solar panels and other equipment. As the income from the government is guaranteed for the 25-year life of the contract, HomeSun is more or less guaranteed to make an excellent return. It doesn’t even need to gamble on the suitability of the site, because you’re paying them to do the survey. In John’s case, the site is close to ideal, as there is some evidence that a morning sun is more reliable, so panels slightly east of south make a better return.
You may be wondering what is left for the home-owner? As widely advertised, your mum will get to use any electricity the panels produce for nothing.This will cost HomeSun 3p for each Kwh she consumes, and save her about 13p per Kwh, which will be deducted from her normal electricity bill.
It all sounds very tempting, but for most people there are some serious disadvantages. The main problem is that you’re not always able to make use of your free solar power. Think how often you turn on the oven, washing machine, dishwasher, lights and other equipment when the sun is shining? If the sun’s out, the chances are most people will be at work, or out enjoying the fine weather. Under these circumstances, your free electricity will be exported, an extra 3p per Kwh will go to HomeSun and your neighbours will pay a market rate for ‘your’ electricity. The only way to make good use of the free energy would be to programme your washing machine, dishwasher and other equipment to come on by rotation during the day, but for the meagre savings, it’s unlikely anyone would be willing to go to that much trouble.
Clearly the HomeSun scheme is an interesting option for pensioners, the unemployed, or perhaps those registered sick, who are more likely to be at home, and less likely to have the capital to fit the panels themselves. They will be in a position to make good use of the free energy, with the option to buy the panels at a later date should they find the capital to do so. Thereafter – like all those who have bought their own solar PV panels – they will receive the generous feed-in payment whether they use the power or not, but obviously it would still make sense to use power-hungry equipment when the sun is out if possible.
For anyone else, these schemes would be a big mistake.With interest rates so low, solar panels are now one of the best investments you can make, so if you have money available, you really should invest yourself by loaning the purchase cost to your mum, or anyone else who wants solar panels and free electricity, but can’t afford to make the installation. Suddenly, you’re in the HomeSun business!
So much for new solar PV generators. Long-term readers may recall that A to B fitted solar panels a few years ago, when the generating tariff was very small. When the last Labour government announced the new feed-in tariffs, the small band of early-adopters were left in the lurch, although the Tory party faithfully promised to correct this anomaly once they were in power. In the event, the Tories found themselves in a coalition, and in the rather odd position of blaming the normally ‘green’, anti-nuclear LibDems for shutting the door on the people who blazed a trail for green power.
To quote Tory MP Oliver Letwin: ‘Chris Huhne [LibDem] very carefully considered the possibility of adopting the Conservative policy as a Coalition policy, but I am afraid that his investigations led to the conclusion that this would not represent value for money – and, indeed, his Department made clear that they would require an explicit Ministerial direction to do something that did not represent value for money if you were to pursue this policy.’
Some, but not all, of these early adopters received grants for the original installation, but it seems unfair that those who invested in solar power for philanthropic reasons are now receiving a lot less than those who have signed up with a prospect of a sound financial return. A politician’s promise is a delicate and fragile thing!
A to B 80 – Oct 2010
