While we cannot provide specific advice on whether to install panels on an existing property, the following insights may be helpful. If you are considering panel installation, it's crucial to conduct thorough research. Typically, it takes 10-20 years to reach a break-even point on the investment cost of the panels. Informative articles on this topic can be found at www.which.co.uk and www.moneysavingexpert.com. These sources suggest that if you plan to move within the next 10 years, solar panels may not be a financially viable option, as it's unlikely you'll recoup the cost of the panels upon selling your home.
This guide is based on the assumption that you are interested in a freehold property. In the case of purchasing a leasehold property, the roof is typically owned by the landlord, and the tenant would not have the right to install panels on it. If the seller is the owner of the panels, a provision will be included in the contract to ensure their transfer to you as part of the property acquisition.
How does it impact property value? The seller may request a higher price to account for the solar panels on the property. It's advisable to seek a valuation from your surveyor regarding this matter. However, be informed that a survey by Which? found that 67% of estate agents believed the panels did not affect the property's value, 17% said they reduced it, and only 8% thought they increased the property's value. Physical aspects During property inquiries, we will request the seller to provide copies of any obtained planning permissions, building regulation completion certificates or equivalents, installation contracts or manuals, electrical certificates for the installation work, any warranties, and any Feed In Tariff-related documents, if applicable. However, it's important to understand that the entities responsible for the installation or warranty may cease to exist, rendering any warranties void. Furthermore, claiming under the warranties is not part of the conveyancing process, and you might need to engage a litigation solicitor to pursue claims against the relevant companies. While panels may last up to 20 years, the voltage inverter often requires replacement roughly every 8 years, with costs around £800. These units can produce considerable heat, so attaching them to wooden frames in the loft or house may pose a fire hazard or invalidate your home insurance. It is advisable to consult a qualified professional or surveyor for guidance on the installation, as you may not have 'consumer rights' against the seller or installer.
Planning permission Installing solar panels on the roof of your house or a building on your property is typically considered 'Permitted Development' in most cases, regardless of whether it's in a conservation area. Generally, this means you do not need to obtain planning permission from your Local Planning Authority (LPA) to proceed, provided certain conditions are met. These conditions usually pertain to the panels' placement on the roof, their appearance, or if the building is listed. If these conditions are not met, or if the LPA has implemented an 'Article 4 direction' (common in conservation areas), then you will need planning permission. A 'Local Search' conducted during the conveyancing process will disclose any existing planning permissions or 'Article 4 directions'. It may be advisable to seek guidance from a planning specialist or contact your local authority for further information. Additional details can be found on the Planning Portal at the provided link. Building Regulations & MCS If you are considering installing solar panels on your roof, you should be aware that building regulations typically apply. It is necessary to verify and confirm that the existing roof structure can support the weight of the panels. Strengthening work may be required. Building regulations also govern other aspects of the installation, such as the electrical work involved.
Installers are expected to be certified by the Microgeneration Certification Scheme (MCS), which sets standards for both installers and systems. MCS-certified installers have the authority to self-certify certain types of building work, including the installation of solar photovoltaic (PV) systems, which eliminates the need for separate building regulations approval. It is recommended to ensure that the installer is a member of a scheme that covers the work being done. Systems must be accredited by MCS to sell any excess electricity back to the National Grid under the 'Smart Export Guarantee' scheme. These considerations are not typically part of the conveyancing process, so it is important that you verify these details independently. Feed In Tariffs The government encouraged solar panel installations by initiating a scheme that compensated homeowners with a tariff for the electricity they returned to the grid. Introduced in 2010, Feed-In Tariffs were initially well-funded, leading to over 900,000 installations across the UK. However, the tariff has been significantly reduced since 2012 and ceased for new installations post-March 31, 2019. Installations predating this can still receive the tariff, but it requires transfer upon property sale. If needed, we can request the seller to complete the 'Transfer of Ownership' form related to the Tariff, or you may handle it independently. Each energy provider has a distinct form, and you must manage the readings and tariff transfer, as it falls outside the conveyancing process. Transfers can take months, and we cannot assist with any issues. Properties with Feed-In Tariffs have a dedicated meter; locate this and record the readings at sale completion. We are not responsible for dividing or reclaiming any tariff due post-completion; this must be negotiated with the seller. Lender approval may be required Standard lender requirements must be met for the approval of solar panel installations attached to a property. We will review your lender's requirements and provide appropriate advice to both you and the lender. ‘Rent-a-roof ’ schemes Do not automatically presume the seller is the owner of the solar panels. Under 'rent-a-roof' or 'free solar panel' agreements, an investor may lease a section of the house's roof for 25 years to install their solar panels. The homeowner benefits from the generated electricity, while the investor receives the 'Feed-In Tariff' throughout the panel's lifespan, potentially amounting to £20,000. The investor covers the installation costs and retains ownership of the panels, which would have cost between £5,000 and £7,000. These schemes can be highly problematic for buyers and their conveyancers. Additional fees may be necessary if the seller has leased their roof. Many leases last for 25 years and are recorded on the property's title. Homeowners often enter these leases without legal counsel, resulting in terms heavily favoring the panel owners. These 'business leases' offer security of tenure and are not easily terminated. Problems arising from these schemes include:
The panel owner may seek compensation if anything, such as trees or a neighbor's loft extension, reduces the light reaching the panels.
The homeowner is liable to compensate the panel owner for any interruptions to the supply, for instance, if roof repairs are needed.
Loft extensions by the homeowner are prohibited.
The lease, being a commercial one with security of tenure, cannot be terminated without legal action.
The homeowner cannot remove the panels without compensating the panel owner for the anticipated profit loss over the remaining 20-25 years.
Damage to the roof by the panels or to the panels by pigeons can occur.
Companies that own the panels may have stopped trading, be untraceable, or fail to remove the panels at the lease's end or from the property title register.
The lease terms may be unacceptable to the lender.
Lender requirements for ‘rent-a-roof’ leases. Lenders impose stricter requirements for properties involved in 'rent-a-roof' or 'free solar panel' schemes. For instance, lenders must ensure the panels are properly installed, leases to investors do not grant 'security of tenure,' and they retain the right to terminate the lease upon repossession without selling the property with the panels attached. Non-compliance may hinder your ability to secure a mortgage or sell the property unless you compensate the investor for their potential loss under the lease. It is advisable to consult legal counsel before participating in such schemes, as ill-considered agreements can significantly impact your home's value and marketability.
Please contact me to discuss any property purchase where you think solar panels may be involved.
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