How Will Installing Solar Panels Affect the Value of My House
Do solar panels add value to your house?
Solar panels can add value to your home in a few different ways. Firstly, the lower electricity bills are a great draw to buyers due to the steeply rising price of traditional energy. A recent study has shown that a third of UK buyers would be willing to pay more for a house with solar PV installed, in order to benefit from these lower energy bills. Solar panels also last for a long time with little maintenance, when properly installed by an MCS approved installer.
One way solar panels can significantly increase your home’s appeal, and subsequently its value, is through the Feed-in Tariff (FiT). The Feed-in Tariff is an ongoing payment the government offers homeowners for creating clean, renewable energy through solar panels.
If you are planning on selling your house within 20 years of installing solar panels the FiT payments will pass directly onto the new homeowner. As the new owner did not pay out for installing the solar panels, this is essentially a small, free income. An attractive prospect which should help raise the overall value of your property.
Solar panels can also add value to your house by raising the house’s EPC (Energy Performance Certificate) grade. Every house being bought or sold in the UK needs to have a valid EPC. After being assessed your house will be awarded a grade from A (highest) to G (lowest). EPC ratings can have a significant effect on house values. Solar panels have been known to raise a house’s EPC rating by at least 2 grades, this is reflected in the house's value. For example, increasing the EPC from a band D to a band B could raise the value of an average house by more than £16,000.
Selling a home with solar panels
The benefits of selling a house on which you have installed solar panels depends greatly on the age of the solar panels. The earlier you sell your property from the installation of the solar panels the more appeal your property will have, due to the many years of FiT payments that the new owner can take advantage of. The solar panels will also be under warrenty for many years to come, which could give potential buyers peace of mind.
The downside to selling your home so soon after installing solar panels is that you may lose out from the initial investment. Solar panels are still fairly costly to install. This cost is usually justified, as you should earn the initial payout back in energy savings and FiT payments within about 7-8 years. Therefore, it may be more beneficial to install solar panels if you are planning on staying in your home for a while and not if you are planning on moving within the next 5 years.
It is probably most beneficial to sell your house within 10-15 years of installing solar panels. That way you would have earnt back the money you initially paid out for installation and benefitted from years of cheaper energy bills. If you sell less than 20 years after installing the panels the new owner will benefit from the remaining FiT payments and cheaper bills. This makes your property a very attractive prospect and the value of the house should reflect that.
If you sell your property over 20 years after installing solar panels your house value could still see some advantage. You will have benefitted from all of the government's clean energy payments but your home will still offer cheaper energy bills. Solar panels are an attractive prospect even after 20 years as most come with a 20-30 year warranty and some systems have been known to last for 50 years.
Top tips for selling a house with solar panels:
- Find an MCS registered company to install your solar panels. This will guarantee that you qualify for the FiT scheme and that your panels have a secure warranty.
- To benefit the most from the savings and earnings of your solar panels, as well as the value they add to your home, it is best to sell your property around 10-15 years after installing the system.
- Be sure to provide evidence of the benefits of solar panels to prospective buyers. For example, you can show them your energy bills before and after installing the solar panels.
- Find an estate agent who understands and appreciates the value of solar PV. Some have not yet realised the full potential value that solar panels can bring to a property.
Buying a home with solar panels
There are many benefits to buying a house with solar panels on the roof. Firstly, you will benefit from cheaper energy bills. The price of household bills are expected to continue rising for the foreseeable future. Solar power can significantly reduce these bills by using the Sun, a free source of energy, to power your appliances throughout the day.
If the solar panels were installed within the past 20 years you may also benefit from the Feed-in Tariff. This is a government incentive which pays people who produce clean, renewable energy. You are paid both for the energy you use and any leftover energy, which you can sell back to the National Grid. The payments are tax-free and pass directly to the new homeowner when a property is sold.
If the house you are planning on buying installed solar panels over 20 years ago you will still benefit from cheaper energy bills. Solar panels are simple, long lasting, low maintenance systems. Most panels come with a 20-30 year warranty and some have been known to produce clean, sustainable energy for up to 50 years.
One important thing to ask the current homeowner is whether they installed the panels themselves or through a free installation scheme. Many companies offer to install solar panels for free in what are essentially ‘rent a roof’ schemes. You should not necessarily avoid properties with solar panels installed this way as you will still benefit from cheaper energy bills. However, you may not receive FiT payments as these normally go directly to the company as repayment for installing the free solar panels.
Ask the seller about the details of their contract with the installation company. If you find that you are completely against the terms of the deal you can ask for the panels to be removed as a condition of sale.
Top tips for buying a house with solar panels:
- Ask the sellers how long ago they installed the system.
- Ask the sellers if they installed the panels themselves and whether they used an MCS approved company.
- If the sellers used a free solar panel scheme to install their system ask to see the conditions of their contract with the installation company.
- Do not be put of by the look of the solar panels. Some people do not consider traditional solar panels attractive. However, modern solar panels are becoming sleeker, thinner and more aesthetically pleasing. With the current climate conditions being the way they are, renewable energy is becoming a necessity. This means that solar panels are likely to be the future of the British landscape.