Sun rises on British Gas solar panel offer

British Gas has today become the latest energy giant to try to break into the booming market for domestic renewable energy technologies, unveiling a new service that will allow households to install solar panels at no up-front cost.

Following the launch of the UK's feed-in tariff incentive scheme in April, many energy companies and specialist renewable energy firms have launched new financing and installation schemes designed to help households deploy rooftop solar panels.

British Gas has now joined them with the expansion of its mySolar Energy pilot scheme, which provides customers with the choice to either pay for a solar panel themselves or take advantage of an offer from the company that involves no up-front cost.

Under the terms of the deal, customers taking up the free panel will effectively rent part of their roof space to British Gas, meaning they can use the energy generated by the solar panel, but British Gas keeps the revenue generated through the feed-in tariff scheme. The deal will only be open to British Gas customers and will initially be limited to 1,500 installations.

Alternatively, households can take advantage of a two-year, zero per cent APR finance deal and pay for the panels and installation themselves, allowing them to keep payments received through the feed-in tariff scheme which can reach up to £1,000 a year.

"Installing solar panels will create a regular, tax-free income for homeowners," said financial expert and broadcaster Jasmine Birtles. "Not only that, but the income is index-linked and guaranteed by the government for the next 25 years. As it typically gives returns of five to eight per cent it's potentially far better than most current bond or gilt investments. It is also a great way to keep your electricity bills down."

British Gas already provides solar installations to businesses through its wholly owned subsidiary Solar Technologies and Jon Kimber, managing director at British Gas New Energy, said the firm had now set itself the target of becoming the "leading player" in the domestic solar sector.

However, the company is likely to face stiff competition from rival energy firms such as E.ON and Npower which are also offering services designed to take advantage of the feed-in tariff, as well as specialist firms such as Solarcentury and HomeSun.

To coincide with the launch of the new service, British Gas released new research revealing that about half of British homes could generate £600 a year from rooftop solar panels using the feed-in tariff, while some could earn up to £1,000 a year. The company estimated that in total British homes could generate £7bn in additional revenue while slashing their carbon footprint.