Despite months of negotiation and many deals being agreed with PV providers, just a handful of landlords have actually been able to install PV on their roofs because banks have held off granting ‘lender’s consent’ – despite an impending April deadline.
Banks that hold housing association homes as security for loans are concerned that installing PV could reduce the value of the properties in the event of a default.
But with just six months to go until the government cuts the feed-in tariff – an amount paid to generators of renewable electricity – housing associations say lenders are jeopardising savings of up to £250 a year on individual tenants’ energy bills.
Frustrated associations and PV providers, which offer to install PV for free and rent the roof space but keep the majority of the FIT, are scrabbling to install PV before April next year after which many deals will no longer be viable.
Last week three major lenders to the sector were called into crisis talks with 20 associations – none of which have been able to complete any of their deals.
Success in the talks is essential ahead of the introduction of similar schemes which also require landlords to obtain lenders’ consent, such as the government’s renewable heat incentive and its green deal retrofit programme which is being finalised by ministers this week.
Malcolm Wilson, commercial director at Westwood RCT Homes, said: ‘We have been talking about this with our bank for almost a year. They are being difficult over a very unlikely apocalyptic scenario.
‘Every week we are not installing it stops us putting up 100 units up – they are taking the money out of our tenants’ pockets.’
Until recently, some banks have been accused of ‘trying it on’ with associations in an attempt to capitalise on the FIT.
One bank asked an association for a payment of £250 per home – while another association was told there would be a minimum fee of £50,000.
However Robert Beiley, partner at law firm Trowers & Hamlins, which called last Thursday’s summit, said progress is being made and banks typically only want to cover their costs and are not trying to renegotiating existing loans.
Mark Amis, head of social housing at Lloyds, said he expected most deals to be signed – although he would not comment on how soon.
He said: ‘From our perspective it’s not a major issue, there are a number of technicalities and we are dealing with them.’