Solar Panel Systems to be Part Financed By Goverment's Green Deal
The Department of Energy and Climate Change (DECC) has confirmed that Green Deal finance can be
used to part-fund the cost of installing solar PV.
How the Green Deal and Feed-in Tariffs works together sets out in detail how the two schemes
work together following a period of uncertainty. According to the document, the amount of
Green Deal finance available will depend on how much money a proposed solar array will
save homeowners on their electricity bill. Crucially, even if the amount saved is not enough
to fund the entire cost of the installation, Green Deal finance can be used to pay for part of the
cost.
In order to calculate how much finance will be available under the Green Deal to fund the cost of
a solar array, assessors will take into account the current ‘deemed’ 50% annual electricity consumption
of a system alongside 50% exportation.
The document includes a worked example of how the combination of Green Deal and FiTs will work:
The Green Deal Swings into action for homeowners interested in installing solar panels. A Green Deal Loan could provide up to 37% of the total cost of the installation.
Source: Solar Power Portal Apr 02 2013
But is it a Good Deal?
Borrowing £2,600, only to pay back £5,100 over 20 years may be a Deal Breaker for some.
DECC reconsidered the manner in which the Green Deal and FiTs interfaced following a number of concerns raised by solar installers during the recent series of industry roadshows organised by Solar Media.
The news will come as a boon to the residential sector, which has seen the level of installs dramatically drop following the FiT fiasco last year. The registration of imported Chinese solar products has also caused module prices to rise recently, further damaging the market’s prospects.
The availability of green deal finance effectively substantially lowers the upfront cost of purchasing solar PV – one of the largest barriers to uptake in the residential market. However, serious concerns remain over the interest rate after the Green Deal Finance Company (TGDFC) confirmed that the initial interest rate will start at 6.96% and rise to 7.96% for a 10-year loan.
Commenting on the factsheet, Paul Barwell, chief executive of the Solar Trade Association said: “This is a useful help sheet. It is great to see DECC using figures from our solar calculator, and it is of course helpful that solar PV is among the measures up for part finance under a Green Deal package, meaning that Green Deal assessors can help raise awareness of the benefits of solar. This puts solar within reach of more consumers, as long as they are willing to accept a slight reduction in return on investment.”
If you would like more information about this, contact your solar panel installer in Warwickshire - SolarTech Energy.