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Domestic UK Solar Power Finance: ‘Free Solar’ Alternatives

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Editor’s note: this looks like a great UK solar financing option and I’m happy to give Jarrah the platform to write about it here — check it out:

solar panels money investment

Recent developments in the United Kingdom have detrimentally affected one of the most popular methods of domestic solar PV finance. The Council of Mortgage Lenders (CML) and the Royal Institute of Chartered Surveyors (RICS) have both issued public warnings to property owners that the ‘Free Solar’ approach could result in issues with re-selling and mortgage applications. To overcome this, a new approach has surfaced that offers property owners zero-outlay solar installations with full ownership throughout the process. This article explores this development.

First of all, let’s summarise how the existing ‘Free Solar’ scheme worked in order to understand how it has been effectively shunned.

Free Solar, or the Rent-A-Roof Scheme

The ‘Free Solar’ scheme worked by allowing a home owner to install a solar power system on their roof for no cost and utilise the energy produced around the home to lower their bills. A finance company would contract and pay an accredited solar installer to then install a system on the roof. The finance organisation would own the system and a small amount of space around it through a contract with the roof owner and use the Feed-in Tariff (FiT) payments to reimburse their outlay.

With the FiT’s guaranteed for 25 years, the finance institutes made a healthy profit out of the system whilst the homeowner had no ongoing concerns and simply saved on energy. As far as alternative energy upgrades go, it has been one of the most advertised in the UK throughout the last six months due to this accessibility. Thousands of domestic properties have installed solar PV in this way, indicating the impact that the canceling of this scheme could have on the domestic installation market.

The Ownership Dilemma

The CML and RICS have agreed that the primary issue with the scheme was the transfer of ownership regarding the roof area. As soon as the property owner enters a contract that splits up the ownership rights of any part of the property, mortgage lenders and property sellers are from this point going to have justifications to refuse their services and consideration of the site.

So how to overcome this? Despite the falling procurement costs the UK alternative energy industry has seen, the upfront investment with solar PV is still in the thousands of pounds. The obvious advantages to a zero-outlay solar PV approach is that it is accessible to anyone with the credit and collateral to become involved. In the chasm that has opened up, we can move on to a new approach for solar power finance that has arisen. An approach that overcomes these issues of system ownership and mortgage applications by using the 25-year guaranteed FiT as the security for a loan.

Solar Selections and Cash Flow Positive Finance

Solar Selections is spearheading a campaign to offer a UK-wide finance service for people considering solar power for their homes and small businesses. Different from the ‘Free Solar’ approach, this unique method involves customers purchasing the system for a deposit of £250 and then paying off the system’s value with their feed-in tariff income.

Available for all domestic installations under 4kWp, this solar PV finance utilises the 25-year guarantee on the feed-in tariff as security for repayments. The mortgage situation is not an issue as the customer owns the system during the entire process. By choosing a repayment plan in line with their tariff income, the approach works just as well as the ‘Free Solar’ method as it involves no negative financial position being reached.

Some more information on this offer is outlined below.

Recent articles on planning permission victories are indicators that not all institutions are against the industry and, with applied efforts, the market can continue to grow. This is just one example of how the industry can adapt and continue to prosper despite the hurdles placed before it via council and government restrictions on solar installations.

Key Benefits:

  • Ownership of the solar power system is retained the entire time.
  • Small deposit of £250.
  • Installation of a solar panel system (<4kWp) by our dedicated MCS- & REAL-accredited installation team at zero cost.
  • Above-industry standard 5-year workmanship and post-installation service provided by experienced installation company.
  • Insurance underwriting available.
  • Spreading the cost of the system means the tariff income alone covers all repayments.
  • First payment is deferred for 12 months.
  • The property benefits from electricity savings throughout the repayment process.
  • Choose to borrow from 1 year to 25 years — pay the remaining amount off at any time.
  • Choose from a range of accredited panel and inverter options.
  • Credit available to most, >95% success rate.

Cash Flow Positive Example with No Outlay

As can be seen from the below table, the first 12 months require no payments and allow the customer to build up a small net profit. By using these savings as a buffer as the payments commence a cash flow positive position can be maintained and no out-of-pocket expenses experienced besides the initial £250 deposit. That way the best solar panels can be installed via the MCS accredited team, yet the cost does not drag customers into any negative cash flow during the process.

Example* for a 4kWp system Financed over 10 Years


Avg. 4kWp Income/month


Cumulative Net Profit





























































Note: These figures do not include the bill savings made through installing a 4kWp system on your home. A 4kWp solar power system will save approximately £220 (assuming 50% consumption) in year 1.

*This is for example purposes only — repayment amounts will change depending upon system selection, credit rating, etc. Repayments may be slightly lower or higher. Terms and conditions apply and eligibility is limited.

For more information on the finance offer in this article, contact Solar Selections on T: 0844 567 9835 or

Written by Jarrah Harburn

T: 0844 567 9835

© 2012 Solar Selections Ltd for

Image: solar panels & money via Shutterstock

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