UK start up announces £1bn solar panel giveaway

UK solar start up HomeSun will this week launch an ambitious £1bn plan to install free solar panels on 100,000 homes within the next three years.

The company, which was launched by a group of executives from the energy, building and carbon offsetting industry, will cover the cost of installing and maintaining rooftop solar photovoltaic panels in return for keeping the revenue generated by the panel through the government's feed-in tariff scheme.

HomeSun claims that homeowners who sign up to the scheme will be able to reduce their electricity bill by up to a third, without having to spend the £11,000 it typically costs to install a rooftop solar panel.

It has raised £20m from a group of undisclosed private investors and banks to fund the initial wave of installations and has set a target of installing 2,000 rooftop solar panels within the next year.

Only homeowners with a large unshaded south facing roof will qualify for the free installation service, although the company is also offering a separate scheme, dubbed SolarShare, where a household with a roof that "isn't quite perfect" for solar panels can pay a one-off £500 fee followed by a £5 a month maintenance payment towards the cost of the panel.

Daniel Green, chief executive at HomeSun, said the availability of free solar panels will help to rapidly accelerate the rollout of rooftop systems.

"Solar power is natural, free and clean – it’s the price which has slowed widespread take-up," he said. "We are changing that. Today is the beginning of a new era as HomeSun takes solar power out into the mainstream."

Under the scheme, HomeSun effectively leases roof space from domestic customers, meaning that it is responsible for the maintenance and insurance of the panels. Households can then buy the solar panels from HomeSun at any time during their life, giving the homeowner access to the income generated through the feed-in tariff.

The scheme is likely to attract plenty of interest from households keen to cut their energy bills and carbon footprint.

However, HomeSun is likely to face intense competition as growing numbers of solar firms use the feed-in tariff to introduce similar business models that reduce or remove the upfront costs for customers.

A number of firms are currently developing alternative financing arrangements that would allow customers to use low-interest loans to purchase solar panels, meaning that they can keep payments generated using the feed-in tariff which can reach around £900 a year.