Solar PV - Free Or Paid?

The government introduced a generous FIT (Feed in Tariff) scheme in 2010 to promote fast take up of rooftop solar PV installations on properties across the UK.

These offer householders and commercial building owners free electricity for the life of the panels, typically up to 40 years. The FIT payments over 25 years can either be retained by the building owner (if they wish to pay for the installation and maintenance themselves) or as in most cases, can be transferred to a specialist company who will install, insure and maintain the panels absolutely free. After 25 years the panels are then transferred to the building owner for free. Installation is simple and normally takes less than a day on a residential house, and around a week on a large commercial or community roof.

The decision of whether to pay for the panels and keep the FIT payments or accept a free installation depends on three major factors:

1. Cash available to pay for an installation, which for a householder would be between £12K and £15K. Payback on average would then be over a period of between 10 and 12 years.
2. As the panels remain on the property roof irrespective of who the owner is, the householder would need to be certain they would still be living at the property for at least the 10-12 year payback period.
3. Whether the cash outlay or loan taken out might be needed for anything else in the future or invested elsewhere.

With the rising cost of energy (projected to increase by up to 100% in the next 5 years), householders should take advantage of the scheme as soon as the decision of free or paid installation is made, as the FIT scheme is to be reduced by the government from March 2012.

Paul Williams is CEO at Freetricity, who offer high level technical expertise on solar and other clean energy products, including solar PV installation and maintenance through the FIT scheme.

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