Friday, 31 October 2014

NHF worried HAs could miss out on long-term income from feed-in-tariffs

Landlords warned over renting out roof space

The National Housing Federation has warned landlords to think twice before allowing companies to rent their roof space for microgeneration.

In an email to its members, the NHF advises social landlords to ‘carefully evaluate any proposals’ from companies offering to rent their roof space and install photovoltaic panels for free.

A number of housing associations have been approached by companies who pay to rent their roof spaces in return for the feed-in-tariff income generated by installing renewables. The federation said the interest from such companies was particularly high in the south west of England.

The FiT scheme opened in April, and pays those who install devices such as photovoltaic panels or wind turbines on their properties for the amount of energy they generate, and the amount that they are able to sell back to the national grid.

The tariffs are paid for by energy suppliers, funded through higher across-the-board energy bills. The total cost of the scheme is expected to be £8.6 billion over the next 20 years, of which £6.7 billion will come from higher consumer bills, and £1.9 billion from higher business bills. The government expects only 5 per cent of the investment in the scheme to be returned, in the form of £420 million worth of carbon savings by 2030.

The NHF is advising landlords to consider whether they would gain more benefit from investing in feed-in-tariffs themselves. It suggested income from the FiT could eventually be invested in other parts of housing associations’ business, such as other retrofit work. The email also said housing associations would need to consider how to organise maintenance and repairs for the panels.

Olivia Powis, NHF London regional manager, said the federation was not saying that the rental schemes were necessarily a bad idea, but that landlords would need to be careful.

She said: ‘We are simply highlighting to them the risks as well as the benefits of these schemes and the potential revenue streams attached.

‘The housing associations own the assets and once the agreements have been signed, they may be tied in for the length of the FiT contract which is likely to be 25 years.’

One senior sustainability figure said: ‘Housing associations need to beware that there are a lot of firms who will tell them that it will make them a lot of money when they’d be better off alone.’

Nicholas Doyle, head of sustainability at housing association Places for People, said his organisation was currently considering a rent a roof proposal from one company.

He said: ‘As with any contract, you need to walk into it with open eyes and be sure what you are getting yourself into. You’ll need to be particularly clear on areas such as insurance and maintenance: who mends the panels and the inverters if they break?

‘But with agreements like this you are essentially paying someone else to take on all the installation and legal work, which is attractive and gives tenants lower bills.’

FiT fact file:

£8.6bn The cost of the feed-in-tariff scheme over 20 years

95 per cent Loss previous government expected from FiTs investment

25 years The duration of the FiT for photovoltaic panels

29.3p to 36.1p The rate paid per kilowatt hour for generating electricity using PVs

3p the rate paid per kilowatt hour for selling surplus energy back to the grid

£1,000 the maximum amount of money a homeowner could make through the FiT per year

Readers' comments (1)

  • Small editorial point, the 'FACT FILE' contains two pieces of incorrect information.

    The rate paid per kilowatt hour for generating electricity using PVs is in fact 41.3p for retrofit property, and 36p for new build. These tariffs are index linked and therefore rise with inflation.

    There is no 'maximum' that a homeowner could make through the FITs per year -- the only limit is the size of the roof and therefore the installation, when talking about 'generation' and 'export' tariffs...

    and the further 'savings' made from not buying grid electricity is greatly affected by the cost of grid electricity which is set to rise significantly with the decommissioning of coal and nuclear power plants around 2016-2017.

    Please could you adjust the 'facts'.

    Unsuitable or offensive? Report this comment

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