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  • Writer's pictureBrad Martin

Leasing Solar Panels? May Not Be Far Away.

Leasing solar panels can provide energy for '10 years free of charge'

While electricity prices shoot through the roof, households have been looking for alternative means to source energy for lower costs. Solar energy is a popular option, but just how much can people save and how can they go about investing?

Solar panel investments have seen a boom over the past year as extortionate energy prices paired with reported savings households can make have boosted demand fourfold. Express dot co dot uk spoke to an expert to find out how much people can save, and what the options and support there is to help those interested in investing in solar energy.

Solar panels are typically placed on the roof of a house and work by absorbing sunlight with photovoltaic cells. This generates direct current (DC) energy and converts it into usable alternating current (AC) energy through inverter technology.

The AC energy will then flow through the home's electrical panel to power appliances.

Andreas Thorsheim, founder and CEO of online solar marketplace Otovo said: “A key and crucial benefit of opting for a solar power system is that your power will eventually be free.

“After around five to 10 years, your total savings outweigh what you paid for the system, meaning thereafter all of your solar-generated power, will be free.”

The cost of rooftop solar panels has declined by as much as 60 percent since 2010 in the UK, reducing the price from around £20,000 to prices varying between £4,000 to £6,000 per household.

Mr Thorsheim said: “Rooftop solar can save individual households over £500-£600 per year in energy costs, while increasing a property’s value at the same time.”

Consumer polling shows that installing solar panels is the third biggest home improvement priority for homeowners, after fitting a new kitchen or bathroom, and windows.

Although prices have decreased for panels, it’s still a hefty sum unaffordable for many people. However, there are additional ways Britons can fund the project.

What are the options to pay for solar energy?

At Otovo, Mr Thorshiem said: “Installing solar systems and batteries typically costs £5,500 to £6,000 per household, with many consumers opting to pay for their solar kit out of their savings.

However, he continued: “There are other options available to make the solution more affordable, including a solar loan (bank loan for solar panels), or lease agreements.

“With recent changes, such as the UK government's announcement that VAT on green home improvements is now set at zero percent - including on the installation of solar panels - banks may be more lenient and willing to loan the money for these solar improvements.”

Leasing solar panels - how does this work?

Leasing solar panels can be a great way for those customers who do not have the cash upfront to invest in solar systems in an attainable switch to solar energy.

Energy rebates announced by Rishi Sunak last week promise to help Britons weather some aspects of the cost of living crisis this year, with the Government planning £15 billion worth of intervention in a new package.

However, unlike buying solar panels or using a payment plan toward the purchase of solar panels, leasing will mean that the customer will not own them.

Mr Thorshiem explained: “Solar leases are a form of third-party ownership. Under a solar lease, the third party installs solar panels on your property and then sells you the electricity produced.

“Your monthly lease payment is based on the estimated annual production of your solar system. At the end of the leasing period, 20 years, the panels belong to the homeowner.

“The panels have a life expectancy of 30 years, which means the power produced in the last ten years will be free of charge.”

The advantages of leasing solar panels include the low or no upfront cost, meaning people don’t have to buy the panels and other equipment upfront.

Mr Thorshiem said: “If you are worried about maintenance, this can be a great alternative due to there being no maintenance responsibilities - the solar company will monitor the system and arrange for any necessary maintenance and insurance.

“You will also notice an improved EPC rating (Energy Performance Certificate), which can make your home easier to sell in the long term.”

How will this help option help against rising energy bills?

Mr Thorshiem said: “The cost, though subject to inflation adjustment, is fixed, meaning that for the next 20 years you pay the same for the power produced through your solar panels no matter what the spot price for electricity is.

“This is a good way to hedge against increasing power prices and bills.”

Otovo is set to launch across the UK in autumn of this year and is developing a programme that will allow UK consumers to lease solar solutions from next year.

NOTE: We claim no right or title to this articles which appears in express dot co dot uk Author: Katie Elliott.

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