Buying a House with Solar Panels

Buying a home with solar panels is becoming increasingly common these days because of greater emphasis on renewable energy, the possibility of reducing your energy bills and the technology becoming cheaper, helped further by government grants. They can be fitted on pitched or flat roofs

This article purely examines when you're buying a freehold property with solar panels rather than a leasehold property. This is because, as a leaseholder, your freeholder owns the roof space, so the decision about whether to install solar panels or not would purely be a matter for them alone.

• What are solar panels?
• How much are solar panels and how long do they last for?
• Can you get a mortgage on a house with solar panels?
• What effect do solar panels have on the value of your house?
• What problems accompany selling a house with solar panels?
• Are solar panels portable?

If you buy solar panels outright, you can benefit from much lower energy costs and might be able to get an income from selling electricity back to generating companies ( Smart Export Guarantee  – see below). This would be the case also if you buy a property on which the previous owner has sited solar panels which they bought outright.

However solar panels are still relatively expensive to buy outright, so many people opt to lease out their roof space to solar panel companies to install the panels, normally for 25 years. They may also buy a property where the roof space has been leased out in this way.

The incentive for the home owner here is that they get free or subsidised cost electricity and possibly an income (export SEG tariff). The solar panel companies benefit from selling you the power generated by the panels, albeit that you'll benefit from a reduction in your electricity bills of between 5% to 25%.

The leasing option has some complications to consider, however, regarding mortgage lenders and when it comes to buying or selling the property. Most mortgage lenders' terms dictate that the lender's consent is required when the owner of a mortgaged property wishes to grant any lease involving the dwelling to a third party, which a 25-year lease of the roof space clearly is.

So if you're looking at leasing out your roof space to solar panel companies, you should contact your lender about it at the earliest opportunity to avoid being in potential breach of your mortgage terms and conditions.


If you're looking to buy a property which has roof space granted as a lease to solar panel providers, you can expect your conveyancing to be treated and charged as a leasehold transaction because of the extra work which always accompanies investigating a leasehold title. We can help you throughout the entire process.

1

What are solar panels?

Solar panels are 3-dimensional cuboid objects containing material which, when the sun shines its light – or photons – on them, are able to absorb the energy given off. They contain circuitry which can generate heat or electricity from the sunlight.

There are 2 types of solar panel:

• Photovoltaic Solar (known as solar PV)
• Solar Thermal

The Solar Thermal system involves solar collectors, pipes and a hot water tank and allows you to heat water and cut down heating bills. It is also much simpler in design.

The Solar PV catches the sun's energy and converts it into electricity that can be used to power household goods and lighting. Each panel, or photovoltaic module, typically contains 6 x 10 photovoltaic solar cells which capture the sunlight. Each panel also includes an inverter, a battery pack for storage, interconnection wiring and possibly a solar tracking system.

The solar PV type is the one which previously allowed you to earn you money through the feed-in tariff, as well as reduce your electricity bills. It is now an eligible installation for the SEG Scheme.

Most commonly, solar panels are used for solar water heating systems and it's increasingly the case that solar power, once the panels are in place, is far cheaper than buying the equivalent amount of power from a fossil fuel source.

2

How much are solar panels and how long do they last for?

To buy a solar PV system for a house outright, you can typically expect to pay a minimum of £5,000 for a basic system but if you want a larger potential electricity output, using solar tiles rather than panels, you can expect to pay upwards of £10,000. The total costs will vary depending on the numbers of panels installed.
For a solar thermal system, you can expect to pay between £3,000 and £6,000.

How long do solar panels last for?

Solar panels normally carry a 25 – 30 year warranty and some older versions are known to have lasted for more than 40 years.

Solar panels are generally regarded as low maintenance although you'll probably need to replace a part called the inverter within about 25 years (cost around £800) and things can obviously go wrong. You should check that your installer warranty covers you properly against this happening and you must inform your insurer – your monthly premiums may increase.

3

Can you get a mortgage to buy a home with solar panels?

Previous owner has bought the solar panels outright

If you're looking to buy a house on which the previous owner has installed solar panels which they bought outright, assuming that owner produces all the required warranties and guarantees and that you can get insurance which covers the panels, you should be able to apply for a mortgage as normal.

Solar panel company owns the panels and has a continuing lease on the roof space

Potential mortgage lenders are likely to apply increased scrutiny when an applicant wishes to buy a home with solar panels for which a solar panel company has leased the roof space.

The lender will need to be satisfied with the lease agreement because the terms of the lease will continue to apply to a new buyer and will affect any new lender who subsequently grants a mortgage on the property.

The lender will wish to know, for example, who is responsible for removing the solar panels if the roof needs repairing.

In practice, with the number of homes with solar panels increasing rapidly, mortgage lenders will generally allow you to get a mortgage for such a home, subject to certain minimum requirements. You can click here to view the Council of Mortgage Lenders' guidance on Solar Panels

It has become common practice for solar panel companies to give new owners the option to buy the panels outright or to carry on with the arrangement under the terms of the original lease. If you're given this option, whichever path you choose, you have to inform your mortgage lender.

4

What effect do solar panels have on the value of your house?

Our research suggests that having solar panels installed has no clear effect on the likely value of your property when you come to sell up, although some buyers may view them as an attractive add-on. On the other hand, some buyers might be put off by how the panels make the house look.

5

What problems accompany selling a house with solar panels?

If you own your solar panels outright, there should be no additional issues. If you're leasing your panels, you'll most likely have the option to buy out the lease (thus taking ownership of the panels) or to pass on the lease for the new owner to take up.

It's worth considering that there may be an expensive early repayment charge involved if you leave the lease agreement early, such as with mortgages. Additionally, if you choose to let the lease be passed onto the new owner, that new owner will still have to be 'vetted' by the solar panel company.

6

Can you remove solar panels when selling a house?

No, is the short answer. This is mainly because they are built bespoke to your house, is likely to make them unsuitable by definition to a different property. There are also issues such as because the panels have been moved, they would then be classed as an 'old' system, which would adversely affect any potential tariff payments. Besides, clearly there would be considerable costs involved, particularly labour.

The best analogy here is wouldn't consider ripping out your boiler when you move!