Selling A House With Solar Panels

You may have noticed that over the last decade or so, solar panels on housing have become increasingly common. They have many benefits for homeowners, and the prospect of cheap/free electricity is enough for a lot of people to take the leap and have them installed. But it’s not always sunshine and rainbows as they can wreak havoc when trying to sell your home. 

Pros and cons of solar panels 

There are some aspects of having solar panels which are likely to appeal to buyers if you were to sell your home: 

Improved EPC rating – A good EPC (Energy Performance Certificate) can make a home more saleable and generally, solar panels will have a positive impact on the EPC. 

Low Electricity Costs – The prospect of cheap or even free electricity can be very attractive to buyers looking at your home. 

Less Environmental Impact – Whilst it will almost never be the deciding factor, a lot of buyers will approve of the smaller carbon footprint. 

Adding on to this, if you were in receipt of FIT payments (Feed-In Tariff – payments made to homeowners in return for generating green energy for the grid) these will usually be transferred to the new owner when you sell. 

However, some potential buyers may have concerns surrounding the structural integrity of the roof due to the addition of solar panels. Specifically, they may wish to know what would happen if the roof needed to be repaired. Buyers will find it hard to secure a mortgage on a house with solar panels, especially if the panels are leased rather than fully owned. 

Selling a house with leased solar panels 

A majority of all solar panels in the UK were fitted for free by solar power companies. The homeowner then leases them back to the installer (usually a 25-year term). The installer then had the benefit of the FIT payments, and has led to issues for both buyers and sellers: 

  • Because a large portion of the roof is leased to the solar power company and not owned outright by the homeowner, a lot of mortgage lenders wouldn’t offer a loan on the property. 
  • Some power companies have also been known to sell the lease of the panels to an agent or investment company. Tracking down the company can be a major delay and they could also charge a substantial fee when you sell the house. 
  • Occasionally, some leases will stipulate that you’re not permitted to extend the property or even sell it in some cases. There may also be clauses that could leave you paying compensation for loss of revenue should the panels have to be temporarily removed (e.g. for a roof repair). 
  • A large amount of the original solar power companies are no longer around so it can be extremely hard to prove who owns the panels. 

Mortgage lenders, generally, will agree to a loan if the people installing were properly accredited (Microgeneration Certification Scheme) and the installation is insured and approved. They will definitely also want to look at the terms of the lease, and in specific, what should happen if the property is repossessed. 

It can be possible to buy out the lease, but be aware that usually this comes with a hefty price tag. 

Some cash investors who buy houses in any condition be able to help, because they don’t rely on financing to buy houses, they may wish to purchase your property. 

Don’t know who installed your solar panels? 

Ofgem keeps a register of all installations which have been accredited and registered with the FIT scheme. As long as you can prove that you’re the property owner, you should be able to find out who owns your panels. 

Selling a house with fully owned solar panels 

If you own the panels outright, things are way more simple. Most of the issues above are cause by the fact the panels are on lease. The only thing that you have to worry about in this scenario is that the buyer has to be willing to maintain the panels. Making sure that you have all the documentation ready to go will help prevent delays in your sale. 

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Sam Wadey

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