Run by the sun
Run by the sun

What impact does a PV solar system have on the value of my property?

Thursday 24 March 2016

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One thing we touched on in our previous blog about the cost of solar panels in 2016 is whether installing solar panels onto a property would affect its value.

There is a common belief that installing solar panels doesn’t affect the value of a home or even negatively affects its value which is actually far from the truth. This is partly because there are undoubtedly people who think that solar panels look ugly – design and style is all subjective after all! However, this is also partly down to a proportion of estate agents who don’t understand solar technology and its benefits and so are incapable of appreciating the value they add.

There are three main reasons as to why solar panels will increase the value of your home. 

  • Reduced energy bills. As prices for traditional energy continue to rise and there is the need to change your energy supplier annually just to keep bills at a sensible cost, this is an attractive draw for homebuyers.  A study in the US has revealed that homes with solar panels sell for more – the equivalent of around £10,000 for a typical domestic installation.  Reduced energy bills over the 25 year lifespan solar panels can only be a good thing.
  • Get paid from the government’s FIT scheme for the electricity you generate and export back to the grid. If you’re inheriting a home installed with solar panels, not only do you receive smaller energy bills but you also inherit the payments from the Feed In Tariff.  Depending on when the solar panels were installed, this will be a fixed rate paid to you quarterly for the lifespan of the solar panels.  The FIT rate currently stands at 4.39p p/kWh. The longer you receive FIT payments, naturally the greater the investment.
  • Improved Energy Performance Certificate rating. By law, all properties are required to have an EPC which is graded from A (the highest) to G. Obviously the better your EPC rating, the more value your property has.  The installation of solar panels has been known to improve a home’s EPC rating by at least 2 grades. 

Buying and selling a home with solar panels installed

Although homes with solar panels in the US sell for a premium, people are still coming to terms with solar technology and their benefits here in the UK. If your moving house and selling a property with solar panels, part of your sales tact should be to educate your estate agent and prospective buyers on the value of solar energy.  Demonstrate the difference it has made to your energy bills and your EPC rating as well as the payments from the FIT.

The earlier you sell your home having installed solar panels, potentially there is more chance on you losing out financially since it costs between £5,500 - £7,000 for a typical domestic installation.

If you’re looking to purchase a property with solar panels installed, be sure that it is the current homeowner who is receiving the FIT payments rather than an external company as part of a ‘free installation scheme’.  However, even if you don't receive FIT payments, you’ll still benefit from cheaper energy bills.  Also, in order to receive FIT payments, the system needs to have been installed by a MCS approved installer. Be safe in the knowledge that providing correct installation has been carried out, the system will have a warranty in place.

To conclude, solar panels installed on your property will only have positive impact when looking to buy or sell. The UK still has a long way to go until the value of solar panels in the property market is fully appreciated, so educating estate agents and prospective buyers is vital.