New guidance released on roof space leases for solar PV panels

The Council of Mortgage Lenders (CML) and the Building Societies Association (BSA) released new guidance and minimum requirements in June 2011 in relation to leases of roof space for installing solar photovoltaic (PV) panels.

Although the government's Feed-in Tariffs (FITs) scheme has been around for over a year, there has been a degree of reluctance among providers of 'free' solar PV panels to consider mortgaged homes as candidates. As a result, those homeowners were missing out on the possibility of free electricity. This is because the providers offer this package in return for an entitlement to the FITs payments, under an arrangement where they take a lease of airspace above the roof, in order to protect their ownership of the solar PV panels.

For such a lease to be registered, the mortgage lender must grant their consent to the lease registration. Mortgage lenders will only want to do this if the lease complies with certain minimum requirements.

The guidance from CML and BSA (which only applies in England and Wales) includes a template letter which is designed to ensure that the providers certify to the lenders that the specified minimum requirements have been met. These minimum requirements include the provider certifying that they will insure the solar panels, maintain them, and that they are liable to repair any damage caused to the property when installing, maintaining or removing the panels. There is also a minimum requirement that the lease agreement is for no longer than 30 years.

For more information on the Feed-in Tariffs please see our article Government announces outcome of fast-track review of Feed-In Tariffs

See also our video guide 'Renewable Energy: For your investment and energy needs'.

Ian Holyoak is Partner and Head of Energy & Renewables at Michelmores. For more information on the minimum requirements for mortgage lenders to roof space leases please contact Ian at ian.holyoak@michelmores.com or on 01392 688688.