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Is it too late to plug into solar power?

on Thursday, 12 November 2015.

Since the introduction of the government's subsidy programme for the small-scale installation of solar panels, schools up and down the country have taken advantage of the opportunity to lock into cheap and predictably priced electricity.

Whilst the roofs of houses is perhaps the image most of us have when we think of solar panels, there have also been attractive opportunities for the installation of solar PV equipment on large public and commercial roof spaces.

There are various structures for the delivery of these schemes. Schools will often purchase the equipment themselves, thereby benefitting from both free electricity, and a subsidy payment for the electricity generated. Where there isn't the appetite to meet the up-front cost of the panels, schools will often rent their roof space to a specialist company which installs and owns the equipment and provides the school with cheap and fixed price electricity - often at a price fixed for as long as 20 years.

However, the regime has been something of a victim of its own success. Although the rates published by the government on 30 October appear likely to fix the subsidy until March 2016, it seems certain that subsidy levels - and therefore the viability of these schemes - will continue to be eroded by the current government over the next few years.

Our contacts in the industry tell us that the continuing tariff reductions make delivery of these schemes very challenging, but we understand that for the most viable premises there is still likely to be a commercial case for their installation - and the government appears inclined to soften the effect of future changes for schools and other community organisations specifically.

Although these schemes do not need to be complex (and we can help you to ensure that they aren't), there are inevitably aspects which take a little time. Agreeing the terms of a roof space lease and electricity purchase agreement, and any necessary consents from mortgagees, is a process which needs to be worked through. For charitable schools, this also involves ensuring that the charity has complied with the usual statutory disposal procedures set out in the Charities Act 2011 in relation to the lease.

With the continued reduction in tariffs over the next couple of years, for schools which are considering their options, we recommend that the sooner you act, the better the chances of securing a viable scheme.


For more information please contact Ed Rimmell in our Independent Schools team on 0117 314 5232.

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