Sound-off

In return they require the assignment of the benefit of the tariff – which is guaranteed at an above-inflation rate by the government for up to 25 years paid by the utility company – as consideration for the works.

Losing out on an inflation-proof 25-year investment is not the only catch to this ‘free’ offer; there are a number of other issues that need to be considered. For example, anyone looking at entering into an agreement with a contractor needs to think about procurement; these contracts are often structured as concessions contracts and, on the basis that many of these contracts are likely to have a ‘crossborder interest’, should be transparently procured accordance with general EU Treaty principles.

There are also potential problems with the design and installation of panels, like who is responsible for ensuring the roofs of the selected properties are able to withstand the weight of the panels? Another equally tricky hurdle is insurance obligations. Social landlords need to consider whether their property insurance policy wording includes solar panels as standard within the definition of ‘buildings’.

Finally the contract will also need to cover obligations on the contractor to check and maintain the panels in accordance with an agreed maintenance schedule and to cause the least disruption to the tenants while doing so. All too often these are not covered satisfactorily by contracts put forward by the contractor.

The offer of ‘free’ retrofitting is unlikely to be the opportunity it’s cracked up to be. Such deals should be considered carefully if social landlords are not to lose out on lucrative revenue streams or leave themselves open to liabilities for other issues going forward.

Chris Paul and Rebecca Rees, partners, Trowers & Hamlins LLP