Buyer Beware: Every Silver Lining Has A Cloud, So Learn From Others’ Mistakes

Should you get solar panels put on your roof? That depends on how you intend to pay for them. Until recently the Energy Savings Trust (EST) estimated that fitting solar panels would knock £120 a year off average energy bills. That ’s thanks to the fact that around 50% of the power captured would end up being used by a householder. Now they have changed their mind. Noting that there is no way of storing the energy from solar panels and that most people aren’t at home during the day (when most of the power is captured), it seems that the actual energy used will be more like 25%. That brings the annual savings down to a mere £70.

This will be of little interest to anyone who can pay to have the solar panels fitted out of their own pockets. Any energy they aren’t around to use is sold back to the national grid under the government ’s feed-in tariff scheme (FITS), typically earning them over £1,000 a year.

But anyone who has embarked on a ‘rent-a-roof scheme, or is considering doing so, will be unimpressed. Under this scheme a firm installs panels on your house for free (these would normally cost £14,000 or so). That saves you the up- front costs. But the catch is that the firm gets to keep all the money made from selling excess energy back to the national grid, while you just get the reduction in your bills from the solar power you use.

So you go through the hassle of having the panels fitted and having equipment owned by someone else on your roof, which could reduce the resale value of your house and irritate your neighbours. And, under the new estimates, you will do so for a saving of around £5 a month. Hardly worth it, really. You could also be taking a risk with your provider. The number of companies offering to fit solar panels for free has exploded in recent years from about 400 a couple of years ago to 2,000 today – and not all are entirely reputable. So if you do decide to go ahead, make sure you check out the firm and any small print – some contracts run for 25 years, longer than you are likely to own your house.

So what if you can pay the up-front costs yourself? This makes panels a much better deal (see box below). Under the government ’s FITS scheme, any money you make from selling excess energy back to the grid is tax-free, the scheme is guaranteed to last for 25 years and payments will rise in line with inflation. But there are some risks, the main one being the guarantee. The government is already reviewing the tariff system and the payments to new panels are widely expected to be reduced in the near future. And who knows what future cash-strapped governments may do? So if you fit solar panels, be aware the deal may not always be as good as it looks now.

Beware This Bogus Funds Scam

The Financial Services Authority (FSA) has issued a warning that a rogue company is pretending to be Invesco Perpetual and attempting to sell bogus funds. The FSA has warned investors to be on their guard for anyone attempting to sell them funds with the same name as Invesco Perpetual products or a similar name. The funds being marketed include an Asian Precious Markets fund and a Gold Precious Metals fund.

The real Invesco Perpetual has described this as a “sophisticated attempt at fraudulently acquiring investors’ money”. It has also reminded investors that the firm is not authorised to give out investment advice and would never make cold calls to make investment recommendations.

Eco-Fraud

Boiler-room scams – in which overpriced, worthless or bogus investments are aggressively peddled to the unwary – have long been a scourge, not least because the gangs behind them are so adept at playing on human psychology. Hitherto, they tended to specialise in com- modities like oil and gold. But an insidious new trend is to focus on ethical and environmental investments. According to City of London police, the tactic has proved so successful that thousands of UK investors (including supposedly savvy punters) have been gulled out of millions. One sophisticated Spanish-based operation, Bio Fuel Solutions, is alone alleged to have scammed £20m from victims on its “sucker lists”, leaving many ruined. As ever, the advice is never to deal with any company not registered with the FSA – and never invest on the basis of a cold-call or unsolicited letter.

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