Home Improvement

Selling A House With Solar Panels

Over the last decade or so, solar panels on housing have become increasingly more common. And although the benefits of free/cheaper electricity can be attractive enough for a lot of homeowners to take the leap, they can wreak havoc when trying to sell your home.

Pros And Cons Of Solar Panels

There are some appealing benefits of having solar panels for homeowners:

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

Low Electricity Costs – It’s no surprise that cheap, or in some cases free electricity is very attractive to buyers that are interested in your home.

Less Environmental Impact – A lot of buyers will approve of the smaller carbon footprint that solar panels can offer, however, it’s worth noting that it will likely never be the deciding factor for interested buyers.

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

However, clued-up buyers may have concerns regarding the structural integrity of the roof due to the addition of solar panels. In specific, 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

The majority of all residential solar panels in the UK were fitted for free by solar power companies. With the agreement that the solar panels are then leased back to the installer (A 25 year term is most common). The installer then had the benefit of the FIT payments, and this can lead to issues for both buyers and sellers:

  • A lot of mortgage lenders won’t offer loans to buyers interested in purchasing your home due to a large portion of the roof being leased to the solar power company and not actually owned by the homeowner.
  • It’s also not uncommon for these solar power companies to sell the lease of the panels to an agent or investment company. Tracking down the leaseholder for the panels can lead to huge delays when selling your home, and they could even charge a substantial fee for selling your home.
  • On occasion, some leases will state that you’re not permitted to extend your property, or even sell it in some cases. There could also be clauses that would leave you paying for loss of revenue if the panels have to be removed temporarily. For example, in the case that the roof needs repairing.
  • A large portion of the original solar power companies are no longer around which can make it extremely hard to prove who owns the solar panels.

Generally, mortgage lenders will agree to a loan if the installers were properly accredited in the Microgeneration Certification Scheme and the installation is insured and approved. They will most definitely want to have a look at the terms of the lease, and in specific, what would happen if the property was to be repossessed.

A lot of the time it is possible to buy out the lease, but be wary that this will usually come with a hefty price tag.

Some cash investors like those at North East House Buyers may be able to help, because they don’t rely on financing and buy with cash, they can purchase your property regardless of whether the banks would approve lending or not.

Don’t Know Who Installed Your Solar Panels?

Ofgem has kept a register of all accredited installations that are registered with the FIT scheme. You should be able to find out who owns the panels on your home, as long as you can prove that you’re the property owner. 

Selling A House With Fully Owned Solar Panels

If your solar panels are owned outright, things are a lot more simple. Most of the issues when selling your house that crop up due to solar panels are due to the lease. The only thing that you may have to worry about is that the buyer has to be willing to maintain the panels. Ensuring that you have all the documentation ready beforehand will help prevent delays and keep things moving forward.