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After the official commencement of the UK feed-in tariff on April 1st we were surprised by the relatively mute response that it received in the UK media. The event did get some press coverage, but the general impression given was that this was just another green initiative, rather than the introduction of a program that has caused a major renewable energy boom in every other economy where it has been introduced.

Since then however, signs have been emerging that there is an ever increasing wave of companies entering this market, and that solar energy in the UK is getting interest from international investors.

As you may well be aware, qualifying for the feed-in tariff requires an MCS accredited installation company. Newly qualified installers have been added to the MCS list every day since April now and the range of companies now offering MCS solar installations is very broad. Some companies are one man, local electricians whilst at the other end of the spectrum are large energy companies such as E.On with thousands of installers, there is a large choice for those wishing to have solar panels installed.

One trend to look out for is the increasing number of professional investors who see an opportunity to make money from the feed-in tariff. By paying for a solar installation on a rented roof or field, investors can have access to the feed-in tariff revenue. Owning the PV system can provide up to 10% annual returns over a 25 year period with a high level of security.

Quite how these arrangements will work is not yet clear. There are a number of ways the contracts between the investor and property owner can be written, and great care to needs to be taken to ensure that all liabilities are covered in the case of a property sale or an accident. Despite this, a number of companies are exploring this type of agreement for the UK, which is already very common in the rest of Europe.

For land owners or property owners with suitable roofs, leasing space for solar panels can be a very attractive option. It requires no upfront investment, generates significant revenues, carries little risk, and improves the environmental credentials of the building. A property owner might earn more money if they own the solar system themselves, but that would require significant initial capital expenditure, something which many companies may not be able to afford.

The feed-in tariff is obviously very attractive to investors as there is little risk. Once you are in the scheme, the payments are guaranteed for 25 years. Photovoltaic systems are generally reliable, so long as you use good quality products. Solar panels are guaranteed for 25 years (to 80% of their power production) and inverters usually for 10 years (you should expect to replace an inverter at least once in the lifetime of the installation). Other than this, the only risk is that the sun will stop rising each day, and if it did, you’d have something a bit more serious to worry about than your profits…

If you would like to invest in a photovoltaic system, or have a suitable roof that you would like to rent, you can contact us for more information.

3 comments

s a yocom

May 19, 2010

Congrats UK!
Now maybe the U.S. will be inspired to do the same. Please do well as another successful example!

Solar is the no brainer to stabilize our economy and lift us from our debts.

Yes, once you’re in the scheme, i say “As long as you got the sun, you got the money!”

South East Solar

May 24, 2010

The penny has not dropped for the majority of the public. It is now possible to make a guaranteed return on your money that exceeds the return you can get from a pension, an ISA or any other investment scheme, by investing in solar PV for your roof! Surely it wont be too long before people wake up!?

Jon Woolley

August 24, 2010

Agreed South East Solar. The Government has never given the Clean Energy Cashback Scheme the ‘fanfare’ that it actually deserved. At the moment it is all about educating people but I am confident it will come good. My contacts in Germany say it took 2 years to get to where they are where upon they can’t make the panels and inverters fast enough to meet demand. It will come. Bring on the UK Solar revolution. :o )

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