Solar panels are an area that crops up from time to time in purchase transactions where panels are installed most commonly on the roof of the Property. Some buyers are wary of the panels, some love the idea and are committed to the environmental benefits of using renewable energy with the added advantage of cheap/ free electricity to the home, and others are unsure or simply do not like the look of the panels. The installation of solar panels is becoming more popular and are seen by some as an environmentally friendly source of electricity and income with payment being received from energy suppliers for unused electricity being sold to the National Grid. For those that are in favour of solar panels there are various matters to investigate surrounding the panels.
The Government introduced a scheme of Feed in Tariffs in 2010 where it makes payments to consumers of electricity generated by accredited installations, including solar panels, which helped overcome the cost of installing them. These have been abolished for new installations since 2019. The scheme was however fairly generous and many companies offered to fit solar panels for free.
You cannot assume that because the panels are fixed to the roof of the property they belong to the property owner. The first thing to consider is whether the solar panels are owned outright by the Seller or is there a lease? In some cases, the Solar Panel company will have fitted them free of charge and the home owner then leased the panels to the power company, usually for a 25 year term. The power company then took the benefit of the feed in tariff. The home owner has low energy bills and the prospect of the Feed in Tariff after 25 years. The lease is generally binding on subsequent owners of the Property and so you must obtain and consider the terms of the lease if this is the case. In addition, in you are proceeding with mortgage finance you will need to check these arrangements are acceptable to your Lender. Some leases contain terms that mean the homeowner will need the consent of the power company to make alterations/extend their house. Another issue is that lots of the original solar power companies have ceased trading and so it can be tricky to find out who owns the panels, which can sometimes cause delays in transactions.
The alternative ownership arrangement is where the homeowner owns the panels outright which is more straight forward. If you buy a house with solar panels and take ownership of them you will become fully responsible for all maintenance costs associated with the panels.
The more information you can obtain from the Seller right at the beginning of your purchase will make it easier for your transaction to progress. This will include obtaining a copy of any lease of the panels, any planning and buildings regulations consent and details of any payments and feed in tariffs together with any guarantees available for installation of the panels.
It is worth asking a Surveyor on a house purchase with solar panels to advise you if they will affect its valuation and marketability of the property in the future. Some solar panels are more intrusive than others and could deter potential buyers.
For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.