Solar panels: a warning

welshwizard1927

I write this post in order to pass on the huge amount of knowledge that I have learnt over the past week about solar panels, and more particularly, the huge risks attached to them.

By way of background, I had recently put in an offer, which had been accepted on a property that had solar panels on the roof. We were aware that there were issues with solar panels in general, however decided that this was a risk we were prepared to take because the house was so perfect.

We had been told the panels were leased from a company which, according to their website, were accredited and approved by the relevant UK Government agencies, which gave us a degree of assurance that we wouldn't have any problems, and that the company was not a cowboy "wheeler and dealer".

Anyway, months passed and more information started to drip through. In particular, despite being told by the owner that we would receive an income from the panels, we would not. This would be retained by the company in return for the free installation and maintenance of the panels. Of course, no such thing as free, indeed they would receive a healthy profit for their work.

We then moved on to legal processes regarding the lease itself. I was sent a copy of the lease by my solicitor and immediately become concerned that the company we were told that owned the panels were not named on the lease. Infact, it was a separate subsidiary company. This immediately rang alarm bells - a subsidiary company, whilst may be linked with another, is a separate legal entity and thus can do what it wants. And quite crucially, the subsidiary company was not accredited or approved like the original company was.

Unsurprisingly, on this basis the lender refused the mortgage until the company became accredited or approved. Which, now they had their money and signed contract, couldn't care less about.

The seller was naturally devastated that we had to pull out, and so are we. In my opinion, I think he was missold these panels, but it seemed quite clear: these panels were owned by a company that was not approved and CML guidelines advise against lenders giving mortgages over properties with unapproved solar panel leases. Thus, unless he was going to find a cash buyer, or pay the extortionate £16k to terminate the lease, he wasn't going to sell his house.

It also followed that having obtained house insurance quotes, the property was not actually covered and a few insurance companies would not cover the property. Potentially a huge issue.

This is simply a warning: if you plan on getting these panels through a lease, give serious consideration over whether you will want to sell your house within the lease period. My suspicion is that in five years or so there will be a boom of properties that cannot be sold because of these panels, which for some people I guess will mean bankruptcy. Apologies for sounding so doomy and negative about this - I know there are also advantages to them, and if you own your house outright and never plan on moving, dare I say this probably won't be so much of an issue, but these panels have the potential to be fatal to any house sale.

rogerblack

As I understand it, the lender had poor advice.
'Unsurprisingly, on this basis the lender refused the mortgage until the company became accredited or approved. Which, now they had their money and signed contract, couldn't care less about.'

The company actually owning the lease does not need MCS/... approval.

Cardew

There are literally hundreds of posts about 'free solar panels' termed 'Rent a Roof' PV systems. The principle is simple! You sign a 25 year lease on your roof, the company gets all the income(subsidy) and the householder gets as much of the generated electricity as he can use. An arrangement very much in favour of the rent a roof firm.

The new owner of a house must also accept the terms of that lease.

One of the biggest companies(and by repute the best) in this field 'A Shade Greener' have a representative who has commented on MSE on this subject of selling a property with their panels. Apparently their leases are all approved and they don't have problems.

However there have been several reports on MSE that Rent a Roof panels with a 25 year lease have caused problems with house sales and applying for a mortgage.

The_Green_Hornet

It would be useful to know who the lease company concerned was.

welshwizard1927

The company party to the lease in question was 'Sun Solar 6 Limited', which is a subsidiary of 'Paul O'Brien Solar (UK) Limited' (or something along those lines).

PoB held 49% of the shares in Sun Solar 6, hence neither a wholly owned subsidiary or even a majority shareholding. One is accredited (and it would appear, installs under the premise that they will be managed by an accredited firm), whilst the other is not accredited.

The_Green_Hornet

A quick company check on Sun Solar 6 Limited shows that it was incorporated on 11th November 2011 with a registered office in Bristol but is now classified as a dormant company and has never filed any accounts.

http://companycheck.co.uk/company/07845463

One of it's directors/shareholders is Mr Paul Dean O'brien which is where I assume the other company comes in. He appears to hold 51 current appointments, resigned from 21 others and has held appointments at 11 dissolved companies.

http://companycheck.co.uk/director/908613323#current-appointments

Ashadegreener_representative

Hi,

It is important that an individual does their research before they decide to go with a FREE solar panel company, ASG are happy to provide copies of our lease for solicitors to go through.

The owner of the panels does not need to be accredited but the installer must be. This is the same as when an individual buys panels for their property.

Rogerblack hit the nail on the head when he stated that it was poor advice on the part of the mortgage provider and is the result of a lack of knowledge on the issue. Personally I think this is a cause for concern that they are operating under false assumptions as they are seen as an authority on mortgage issues and so they should make it a priority to be well informed.

If they refused a mortgage on the grounds that the owner of the panels is unaccredited then this means that almost everyone who has purchased panels for their property will be unable to sell them as they will not have accreditation themselves and we already know that this is not the case.

Unfortunately it appears that the mortgage company has turned you down because they were ignorant of the facts. Last year the media sensationalised many similar cases where customers who had FREE solar panels installed by a company based in Birmingham could not get a mortgage for their property from Skipton BS. It later transpired that many of those refused were due to a misinterpretation of company policy and the society had no issues with the presence of the panels or lease.

The subsidiary company that owns the panels are still bound by the lease and they are not able to do as they please. The lease protects both the panels and the homeowner; if the homeowner changes then the panels remain; if the panels change hands then the homeowner is unaffected.

welshwizard1927

Ashadegreener_representative wrote: »

The owner of the panels does not need to be accredited but the installer must be. This is the same as when an individual buys panels for their property.

If this is the case, perhaps you can answer:

1. How does a future buyer/lender know whether the panels have been fitted by an accredited company?

2. How can a future buyer/lender be confident that the owner of the panels will comply with the code of conduct that is attached to beng accredited, if it is not accredited?

The whole business model, in my view appears completely flawed for the owner. Of course, it works well for the panel owners, who may do what they wish with their trading business without jeopardising the status of the subsidiary that owns the panels. Note the companies I referred to were not linked by a shareholding greater than 50% - thus a minority shareholding at that . Separate registered companies attract an entirely separate and independent legal entity.

Ectophile

welshwizard1927 wrote: »

If this is the case, perhaps you can answer:

1. How does a future buyer/lender know whether the panels have been fitted by an accredited company?

Presumably because the owner has a big pile of paperwork, including the MCS certificate.

2. How can a future buyer/lender be confident that the owner of the panels will comply with the code of conduct that is attached to beng accredited, if it is not accredited?

The point is that you need to be accredited to install solar panels. Once they are installed and the paperwork is done, that's the end of it. It doesn't matter who owns them - there's no accreditation for owning solar panels.

The whole business model, in my view appears completely flawed for the owner. Of course, it works well for the panel owners, who may do what they wish with their trading business without jeopardising the status of the subsidiary that owns the panels. Note the companies I referred to were not linked by a shareholding greater than 50% - thus a minority shareholding at that . Separate registered companies attract an entirely separate and independent legal entity.

Martyn1981

welshwizard1927 wrote: »

If this is the case, perhaps you can answer:

1. How does a future buyer/lender know whether the panels have been fitted by an accredited company?

Hiya.

As Ectophile says, because it presumably qualifies for FITs, which requires MCS certification.

Just a thought, but having re-read this thread, you say you really liked the house "'was so perfect". Have you and the current owner considered buying out the lease?

£16k is a lot of money, but I've heard people being quoted £25k to £30k. So you'd need to find out what size the system is and when it was installed (to ascertain the FIT rate). For that money a 4kWp system might be very worthwhile, but a 2.5kWp marginal.

Output - presumably the owner can see the TGM reading, so can quickly work out annual generation. A 4kWp system on the oldest tariff could generate annual incomes of £1500+.

If both parties still want to buy/sell the house, then negotiate the split of the £16k. Perhaps you pay £10k(ish) more for the house, and the current owner buys out the RaR at £16k.

Loads of numbers to consider, but just a thought if you haven't already given up.

Mart.

welshwizard1927

Martyn1981 wrote: »

Hiya.

As Ectophile says, because it presumably qualifies for FITs, which requires MCS certification.

Just a thought, but having re-read this thread, you say you really liked the house "'was so perfect". Have you and the current owner considered buying out the lease?

£16k is a lot of money, but I've heard people being quoted £25k to £30k. So you'd need to find out what size the system is and when it was installed (to ascertain the FIT rate). For that money a 4kWp system might be very worthwhile, but a 2.5kWp marginal.

Output - presumably the owner can see the TGM reading, so can quickly work out annual generation. A 4kWp system on the oldest tariff could generate annual incomes of £1500+.

If both parties still want to buy/sell the house, then negotiate the split of the £16k. Perhaps you pay £10k(ish) more for the house, and the current owner buys out the RaR at £16k.

Loads of numbers to consider, but just a thought if you haven't already given up.

Mart.

Unfortunately not possible - the FIT is claimed by the owners of the solar panels - hence the only benefit to the home owner is free electricity during the day.

It is not possible to buy the house for an extra £10k, as the mortgage company would not lend to do so.

Having been through the process of attempting to purchase a property with leased solar panels, as well as trying to obtain home insurance, it is my personal view that people should steer well clear of them. I appreciate those who have the panels, and those who try to flog the panels will think otherwise, but genuinely think this will be a massive 'time bomb' in a few years where people can't sell/remortgage/renew home insurance on properties with such panels.

If you really with to have them - either buy then outright or get a loan to buy them. Either way I cannot see any merit in leasing them under such onerous, unfair terms.