Selling a house with solar panels: pros and cons

by Iain Mason

Published on 5th May 2021

Solar panels are a well-established way of making a home more energy efficient and, of course, contributing to the battle against climate change.

selling a house with solar panels

However, if you are thinking of installing solar panels on your property you need to weigh up the pros and cons first. When it comes to later selling the house there may be some disadvantages, and equally advantages, that you should take into consideration.

Benefits of installing solar panels on your home

With heightened awareness of climate change, and with a view to reducing energy bills, some house-hunters will find the addition of solar panels on a property they are viewing a positive bonus.

When obtaining an EPC – Energy Performance Certificate – for a home you are selling, solar panels are likely to have a positive impact. A well-rated EPC makes your home more sellable.

If you have solar panels and are benefiting from feed-in tariff payments, these will generally be transferred to the new owner. The FIT payments are payments you receive when your solar panels produce more energy than you need, with the excess being bought for and diverted to the grid.

There is also research suggesting you can ask for a higher purchase price if your house has solar panels.

Lower energy bills, less impact on the environment, a good EPC, and potentially a higher asking price are all plus points for selling.

Disadvantages of selling a house with solar panels

So far, so good, but let’s look at the possible objections.

Buyers may have concerns about whether the solar panels have affected the integrity of the roof structure. They may also question how to action any necessary repairs to a roof that is embellished with solar panels.

There are cases where mortgage companies are reluctant to lend for a purchase where there are solar panels, and this is especially true if the panels are leased rather than owned outright.

So what are the issues when selling a house where the solar panels are leased?

This scenario is quite common. In many of cases, homeowners were able to have free installation of solar panels, then leasing the panels back to the installer for a contracted number of years (generally 25). The FIT payments then went to the installer and not to the homeowner.

Unfortunately, when it then comes to selling, issues have arisen. As we mentioned, some lenders won’t give mortgages on sales where the solar panels are leased.

Resolving this lies in contacting the agents or company which owns the lease, but there are cases where the leases have been sold on and tracking down the new owner is time-consuming and can delay the selling process. If the solar panels were installed some time ago, the installation company may have ceased trading so, again, who now owns the lease?

There are some lease contracts which stipulate that the homeowner cannot extend the property, or perhaps even sell it, without consent of the power company. There may be a clause agreeing the installer gets compensation for loss of revenue from FIT payments, if the solar panels are removed (for example if the roof needs a repair).

You might be able to buy out the lease, but this is likely to be a costly option.

The key here is to ensure that if you have solar panels installed, you do so through a properly accredited installer, under the Microgeneration Certification Scheme. If you choose a lease arrangement, carefully check the terms or ask a solicitor to do so.

To avoid delays when you come to sell the house, make sure you keep all documentation, such as a copy of the lease (if applicable), payment details, and planning and building consent information.

If you own a property where the solar panels were installed by a previous occupant, and you don’t have any information, then a good starting point is Ofgem, which has details of all installations registered and accredited through the FIT payments scheme.

For more information about buying or selling a home with solar panels, or any legal conveyancing advice, please get in touch. We help people with the conveyancing process in Swindon, Wiltshire, Cheltenham, Gloucestershire and the surrounding area.

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