| You may have seen recent announcements in the | | | | panel schemes is a different network such as the |
| press regarding 'solar panel giveaways' from new | | | | Mark Group and Eaga, firms which have over a |
| companies offering to install photovoltaic panels on | | | | thousand installers. They grew by doing boiler |
| your home completely for free. Solar PV panels are | | | | replacements and installation fitting for utilities such as |
| known to be extremely expensive, so how on earth | | | | British Gas. This arrangement means company who |
| could a company offer them for free, and why would | | | | actually sells you the system is in fact a middle man |
| they do it? | | | | between you, the bank and installer. There isn't |
| The answer is relatively straightforward, the | | | | necessarily anything wrong with this, but its important |
| companies involved stand to make a considerable | | | | to understand what is going on. |
| amount of money from the scheme. The key behind it | | | | The other way of looking at it is that the investment |
| is that installing photovoltaic panels under the feed-in | | | | banks are providing a service. Not everyone is in the |
| tariff is a very good investment. Installing them on your | | | | position to invest 10k in a solar PV system and the |
| home is especially good because the feed-in tariff | | | | 'free solar' schemes allow a wider range of people to |
| pays the most money for small PV installations. | | | | experience solar energy and benefit from it. The |
| Anyone deciding on where to invest their money | | | | arrangement means that the feed-in tariff payments |
| should definitely look at getting a solar installation, it's a | | | | go to the investment bank, but the savings in electricity |
| tax-free, index linked investment that can be a great | | | | bills at least are retained by the resident. |
| help to families and the environment. | | | | Overall these financing schemes will help to quickly |
| Unsurprisingly for the UK economy however, where a | | | | grow the industry in the UK, but beware of how they |
| good investment is to be found it doesn't take long for | | | | work and know that you would make a lot more |
| the investment banks to come lurking. All of the free | | | | money if you self-financed. In Germany and other |
| solar schemes offered are actually based on | | | | more mature solar energy markets, what you find is |
| investment funds set-up by a well known UK | | | | that 'solar loans' are widely available. This is the |
| investment bank. The fund is created to pay for solar | | | | cheapest way of financing a solar installation. You just |
| installations on suitable UK homes, and then all the | | | | get a loan for however much you need in order to buy |
| revenues from the solar panels go directly back to the | | | | your system and pay it off with the feed-in tariff |
| bank. Some electricity savings are passed to the | | | | revenue. It means you still get to own the system and |
| resident, but the big majority of returns go straight to | | | | receive at least a portion of the feed-in tariff. |
| the bank. | | | | So if you would like solar panels but can't afford to |
| The second critical ingredient to this arrangement is the | | | | invest 10k over 25 years then getting some sort of |
| network of installers to design and install the | | | | financing is a good idea. It might just be worth waiting |
| installations. In the UK there are not a huge number of | | | | for better financial products rather than lining the |
| these installer networks. Behind each of these solar | | | | pockets of investment bankers however. |