Solar photovoltaic panels - leases of roofspace

The Department of Energy and Climate Change, via the Energy Act 2008, introduced a system of Feed In Tariffs (FITs) to incentivise small-scale low carbon electrical generation. These FITs intend to incentivise the generation of heat from renewable sources on all scales.

FITs went live on 1 April 2010. Since then, a market of solar photovoltaic panel providers has emerged, offering free installation of solar panels onto roofs of residential housing in the United Kingdom. The providers receive a FIT payment, and those who have the solar panels installed, receive free electricity generated by the panels. Providers have settled on the use of a lease of airspace above the roof to protect their interest (they retain ownership of the solar panels).

CML and BSA have produced joint guidance for providers on what lenders will typically seek comfort on before consenting to the lease of roofspace. The guidance includes a template letter which can be used by the panel providers to confirm to lenders that their lease complies with the minimum requirements set out in the guidance. At this stage, the guidance applies to England and Wales only, however guidance for Scotland and Northern Ireland will be considered.

Please note that this is guidance and as such, it is issued to inform the market of typical lender requirements. Given the complexity and variation of solar (PV) schemes and leases it cannot cover all issues but sets out areas where lenders may have minimum requirements. As with all guidance, it will be reviewed regularly.

NB: We are aware that some leases are being described as 'CML approved'. CML does not 'approve' solar (PV) leases, as the decision to consent to a solar (PV) lease is entirely up to the individual lender.