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Do solar panels affect house sales?

Posted by Cathy Debenham on 29 September 2010 at 3:35 pm

A solar panel installation should make a house more desirable, shouldn't it? There's the saving on energy bills from using home-generated electricity, and even at the lower early adopters feed-in rate the combination of generation rate and export rate begin to add up to a nice bit of extra income.

At current rates with an average size installation you'd expect to save around £150 a year from electricity bills, and get around £200 a year feed-in tariff income. This continues until 2027 and the saving is likely to increase as electricity prices rise.

What's not to like about that, I wonder. But I just received the following:

"My partner and I installed 5kWp of solar PV on our home some 5 years ago when the grants were 50% or £15,000. I felt, that as I was involved with the industry I should put my money where my mouth is (so to speak).

Now we have all been let down by not getting the same feed in tariff as people installing now.

The real problem that I have now is that we have put our home on the market in order to relocate. I have had a few persons come to see the house via our agents. When the solar PV question comes up and I say we only get paid 9p per unit it puts off the potential buyers as they feel that they are being penalized for buying a house that have been made energy efficient with the introduction of solar energy. both PV and thermal.

This has now left me with a dilemma as to whether I should I take the system off the house. However, this is not right, I should not even be contemplating such a shameful move.

Also how many other people are in the same situation. What would any of your readers have to say about this situation?"

This is my reply: My feeling is that you’re pitching it wrong to potential buyers of your house. They don’t have to make a capital investment – you've already done it. If they buy your house they get the benefits of cheaper electricity bills than they would in any other house plus 9p for every unit generated plus 3p for every unit exported until 2027 – they’d be mad not to embrace that.

My back of an envelope calculation says they'll get £470 of feed-in tariff income a year - and of course the savings from the free electricity they use. This is a fantastic selling point.

Sure the low rate for early adopters is bad news for you as the person who made the investment – if you were staying in your house. But as you're not, it doesn't matter one way or the other. Be positive about the benefits, and they should command a premium on the selling price. And you can always install another solar PV system on your new house and claim the full rate of feed-in tariff.

What does anyone else think? Should the correspondent be dismayed. Should the buyers be put off - or jumping at the opportunity?

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Comments

11 comments - read them below or add one

Gilly Jones

Gilly JonesComment left on: 8 July 2014 at 1:32 pm

Hi  Deano10

A good place to start your research is our information page on solar PV  - its gives some great background information on costs involved and about the financial support through the feed-in tarrifs.

You might also find some other artciles on the blog of interest such as Will solar panels affect the sale of my house.

Hope this helps.

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deano10

deano10Comment left on: 8 July 2014 at 12:39 pm

I am a home owner and I own a standard semi-detached house with monthly electricity bills of around £50-£60. I am considering buying a solar power system for my house. I am hearing conflicting advice on this subject including:

Difference in installmant costs

How the panels deteriorate over time

Selling the house with panels installed etc.

Does anyone have some proper informed advice please.

 

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Cathy Debenham

Cathy DebenhamComment left on: 25 November 2010 at 2:29 pm

Hi Gareth. It's early days for anticipating what it will be like to sell a house with the roof rented out for PV. My gut feeling is that buyers may not like it, just based on feedback I get from people trying to sell houses with PV panels they own on the roof. This is mainly because, despite the huge growth in solar PV since the feed-in tariff in April, it's still new and strange to most people and they don't understand it. 

I'd advise a very careful look at the small print before signing up, and also think about what proportion of your electricity bills come from daytime electricity use. If you and your family are all out of the house most of the day, then the reductions in your electricity bills may not be very large. 

These links take you to a couple of articles about rent a roof schemes:

Which? on rent-a-roof schemes

Free solar panels: is it too good to be true?

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gareth0898

gareth0898Comment left on: 24 November 2010 at 3:59 pm

I am looking into the "rent a roof scheme" i think it's a no brainer but am concerned that it may cause issues when I  later sell. In my opinion its something for nothing and wont cost a thing to run what do you all think I will be using British Gas to provide the scheme thoughts greatfuly received.

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Explore Solar

Explore SolarComment left on: 15 November 2010 at 5:44 pm

Explore solar

I agree estate agents do not really have an idea, since they have been unable to directly compare a house price on the same road, with and without solar panels installed. This will all change in few years time, when they have the hard evidence. But, to me the logical way to look at this is buy asking yourself, if you had a house which was saving you £1000-£1200 a year, would you pay more for this house than the same house on the same street without solar PV panels? The answer would be most defiantly yes, in my view. Especially, since energy prices are going o go up a lot more over the next few years. Your house becomes a like commercial property by having solar PV installed, since it will generate and income at the same time while you are living in it.

I think the next logical step will be to value house according to the FITs traffic that they will be on, once the FITs payment begin scaling down in 2012, if not sooner. Based on today’s prices a 2.23kW system costing £9700, will generate you a saving of £1035 (FITs of £767) after 25 years the same system will save you £1851 ( FITs of £1251) and a yield of 18%.The system will have save you £37K in 25 years. I have developed a spread sheet if anyone is interested. Please go to our web site

http://www.exploresolar.co.uk

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3003derek

3003derekComment left on: 21 October 2010 at 4:57 pm

IF I was buying a house now, I would ask my solicitor for copy of the recent ENERGY BILLS for that house.

A potential buyer of our house would find our energy bills already with our solicitor - a huge selling feature because

...we are paying £36 a quarter for electicity (includes cooking) and get about £1500 pa tax free from the PV system.

My 5 bedroomed house in Orkney is NOT for sale!

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surtecenergy-me58ad

surtecenergyComment left on: 4 October 2010 at 7:08 pm

i am passionate about renewables about which i have been reading over a number of years but new to the industry as a consultant and am trying my hardest to learn as much as i can as about the different options relating to (ROCS)feed in tariffs and the 3p  per unit claw back for surplus etc  . I would like to pursue this particular query as a free exercise. if you will allow me . is it possible to  have other info such as

the option for a further panel retrofitted to gain the full tariff . the size of the roof and its angle , the direction it faces . i assume in devon . if interested please give a few more details .

if you help me i will be eternally grateful ... any comments from others welcome

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Ben

BenComment left on: 29 September 2010 at 10:28 pm

Thanks Cathy and GM Renewables.  I agree that the income from solar PV is far from abstract, and that it's index linked, tax free and guaranteed, but compared to the overall value of most homes it is still unlikely to make much of a difference to the capital value.  The economics of loft insulation are also very convincing in terms of reduced energy bills year on year, but you don't see this mentioned in brochures because most buyers separate cost of purchase from cost of ownership when considering buying an asset.

This isn't rational economics, but it is a fair description of the decision process for most of us.

I agree Cathy that perceptions will change, but we need to find ways to accelerate that process especially to encourage younger more mobile people to feel comfortable getting generating without risking their capital investment.

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GM Renewables

GM RenewablesComment left on: 29 September 2010 at 5:27 pm

What do they want for their money?

Yields are typically expected to be greater than 10%, tax frre, index linked and guaranteed for 25 years.

The estate agents don't have a clue anyway.


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Ben

BenComment left on: 29 September 2010 at 4:44 pm

I've been advised by an estate agent that while interior improvements such as a new kitchen and a lick of paint can add to the value of a house, solar PV on the roof is unlikely to do so - or at least that the addition will be very small compared to the capital outlay.

The difference is that the benefit of a new kitchen or fresh paint can be appreciated immediately, whereas the benefits of reduced electricity bills are harder to evaluate.  In other words solar PV doesn't add to the "homely feel" at the time of sale.

This is a shame since with a payback time of 9 or more years it could put people of installing solar PV unless they plan on staying put for a long time.

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Cathy Debenham

Cathy DebenhamComment left on: 29 September 2010 at 4:12 pm

That's an interesting one, Ben. The new kitchen is only going to add to the house if the potential buyers like the style of it. How many new kitchens and bathrooms get ripped out and replaced by new buyers just because they don't like them? I think it's quite a lot. 

Reduced bills are a bit abstract, but income isn't. As more people install under the feed-in tariff I think perceptions will change, although it may well take a while...

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