In the UK recently there has been a lot of buzz about mortgage lenders refusing mortgages and re-mortgages on homes that have solar under the rent a roof scheme. Is there any truth in this, are people actually finding themselves unable to get a mortgage?
Prior to April 2010 there were no free solar installations in the UK, in fact there were very few paid solar photovoltaic installations. Two years later there were some 300,000 domestic solar systems installed on people’s homes.
There are no official figures that show how many of these installs are paid and which are free. Reza Shaybani, chairman of the British Photovoltaic Association recently estimated there to be around 30,000 systems installed for free under the rent a roof schemes. Installer A Shade Greener, one of the largest free installers has given a higher estimate of around 50,000. Given the number of companies who have offered free systems during this period and considering the claims of the number of installs from their websites I would say the number was closer to 50,000.
Lenders and roof leases
To date there only seems to be one case where there has been a problem; this is the case of the Welton’s, published some time ago in the Guardian. This same story has been regurgitated ad infinitum with no new examples of anyone not being able to get a mortgage due to having a “solar lease”.
The issue stems from the fact that when these leases were introduced the mortgage lenders were unsure of how they would affect the mortgage process. The solar industry was consulted and a set of guidelines were introduced that both the lenders and installers would be happy with.
Have there been any mortgages or re-mortgages issued under the rent-a-roof scheme?
The term rent-a-roof is a bit of a misnomer, as you are not technically renting out your roof. There is a lease agreement in place that covers the airspace above the homeowner’s roof. This is in place to ensure that the panels are never obscured and that the installer has access if maintenance and repairs need to be carried out.
After consulting with one of the larger installers they confirmed that they are aware of dozens of homes that have been sold with their free solar panels in place. Under the agreement the homeowner does not have to inform the installer that they are selling the house or re-mortgaging so these figures may be much higher.
So what are the mortgage lenders views of these types of schemes?
It seems that most if not all the major high street lenders are providing mortgages and re-mortgages on homes that have free solar panels. Some of the lenders include:
- Bank of Scotland
You can see the full list of free solar friendly mortgage lenders, which contains a list of about 30 Banks and Building Societies at the time of writing.
Is free solar still a good idea?
Some 300,000 homes are now fitted with solar and now contribute a combined capacity of 846MW, enough to replace a nuclear power station. Free solar has allowed those that cannot afford to or do not want to invest the opportunity to lower their bills. Installing a solar PV system reduces the average electricity bill by 37%.
With the cost of solar photovoltaic systems having more than halved over the past 2 years, solar PV is a good investment with possible returns of almost a thousand pounds in the first year alone. There are also a number of self-funding schemes available that reduce your initial investment costs.
Installing solar reduces your bill; it reduces the amount of pollution and our reliance on imported power. The more solar capacity we have in the UK the cheaper our energy costs are going to be as a country and the less we are going to have to subsidies nuclear.
Written by Allan Burns, creator of Free Solar Panels UK a resource on renewable technologies and energy saving for the home.