Panels

As more people take personal accountability for their environmental impact and technology advances, the generation of solar power in the UK has grown exponentially over the past 10 years (2008-2018: growth by a factor of c. 700). From a consumer perspective this is an environmental, rather than a financial initiative. Yields are still low, and installation costs have until recently been high, which leads to long amortisation periods (up to 25 years), under which many homeowners will register a loss. The Guardian reports this week on the reduction of FITs (feed-in tariffs, paid by the government for energy supplied to the grid). Having fallen by 90%, the payback from solar panels has reduced and the amortisation periods pushed out to up to 70 years. Whilst most companies which profited from FITs have stopped trading, in many cases the homeowner remains obliged to keep the solar panels until the expiry of a lease of the roofspace to the installer (often 25 years). In turn this is impacting on the value and mortgageability of affected homes, with anecdotes of huge payments being made to buy out these contracts. There are some lessons here. Firstly, consider carefully before granting rights over your freehold. Secondly, in a broader sense, with the pace of technological change accelerating, costs coming down and product lifecycles shortening, don’t tie yourself into a long-term position on tech that might look outdated in the medium term. Finally, always read the small print!