UK Homeowners Trapped By 25-Year Solar Panel Contracts

  • Date: 25/11/18

Householders who lease their roofs to power firms find it hard or costly to move home

Julie Griffiths* bought her wanted to reduce her carbon footprint by installing solar panels. The cost would have been a prohibitive £12,000, so she signed a deal to lease part of her roof to a solar power company, which would fit the panels for free. It would pocket the newly introduced feed-in tariffs (FITs) – subsidies paid by the government for the electricity generated. She, meanwhile, would have lower energy bills. At the end of the 25 years, the panels and the tariffs would be hers.

It seemed a win-win situation until recently, when she needed to sell the house. Her buyer’s mortgage application was refused because of the lease agreement, which had effectively signed over a large part of the roof to the solar company.

“A clause in the lease allowed us to buy out the panels for a fee to compensate the company for the loss of their FITs,” she says. “We were prepared to do it to be able to sell our house and move on with our lives, but the company had passed the management of the panels on to an agent, who seemed reluctant to let us proceed.”

Eventually, after the Observer intervened, Griffiths was allowed to buy the panels for £20,500, an uncosted sum that she was told was non-negotiable. Not only was this nearly double the price she’d have paid to install the system herself, but she had also missed out on nearly eight years of FITs worth, around £7,300. All in all, the “free” system has left her around £16,000 out of pocket. […]

Many are discovering the high price of their “free” deal as they try to sell. The 25-year leases apply to the property regardless of who owns it, and they have to find a buyer willing to take on the remaining years. And even if a buyer is happy, mortgage lenders may not be. The deal is treated as a leasehold, and contracts skewed in favour of the company are deemed risky by banks and building societies. […]

Government subsidies on solar panels will cease at the end of next March. Miss the deadline and it would take a working household up to 70 years instead of the current 20 to recoup the average £6,500 cost.

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