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What happens to the feed-in tariff when you sell your house

Posted by Cathy Debenham on 11 November 2011 at 4:53 am

Can I continue to receive the feed-in tariff payments on a solar PV or wind turbine installation after I've sold the house, is a question I'm being asked more often. My understanding of the original plans for feed-in tariffs (Labour's document) was that when someone sells their house they would sell the PV equipment, and the right to receive the feed-in tariff payments, with it.

However, there are a number of stories about it being possible to retain ownership of the panels and the feed-in tariff payment circulating, so I asked Ofgem whether there is an official line on this?

Ofgem's response is as follows: 

"Under the Feed-in tariff (FIT) the owners of installations are able to nominate others to receive the FIT payments so the scenario described above is valid, but very unlikely as usually if an installation is sold as part of the house sale then the new FIT Generator (legal owner) can and will nominate someone else to receive payments.

"I’d imagine this arrangement would be subject to contracts between the old and new owner of the house/installation."

So if you get the paperwork right, it is possible. But my guess is that it's not going to make it easier to sell your house. It's like a rent a roof scheme, but without the reassurance of a contract with an installer that makes them responsible for maintenance and upkeep of the panels.

If I was the buyer, I wouldn't be keen. I'm also pretty confident that anyone needing a mortgage would find their mortgage company unwilling to play ball. But if you've got experience of such a situation, do let us know in the comment section below.

To see more information on the feed-in tariff and selling your home, click the link.

Photo by jetsandzeppelins

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Comments

9 comments - read them below or add one

Sandra Hayes

Sandra Hayes from Comment left on: 9 August 2016 at 9:14 am

Hi Jackie,

From what you say I understand that you recently paid off the Green Deal Loan that was taken out in order to purchase the solar PV panels that are now included in the sale of your house.  If I have understood this correctly, the liquidation of the installer should not be an issue.  The ownership of the panels would have passed to you once they were installed and all the paperwork for the loan put in place.  The Green Deal Provider will be able to provide evidence that will satisfy your purchaser that the loan has now been paid off and that you are free to sell.  If the Green Deal Provider was also the installer (who has now gone into liquidation) and you haven’t already got proof that you have paid off the loan then I would suggest that you contact the Green Deal Obudsman.  Contact details can be found at https://www.gov.uk/complain-green-deal

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jackie chamers

jackie chamersComment left on: 26 June 2016 at 3:53 am

Hi I have just sold my house which has solar panels .i have  just paid them off after a year as they were included in the house sale, but the installers have went into liquidation and the new owners want confirmation that the solar panels are to be tranfered to them ( transfer of ownership) they said that their new energy provider needs this, do you have any advise on this and where i could get this letter,

this was part of the goverment grean deal ( scotland )

thank you.

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Cathy Debenham

Cathy DebenhamComment left on: 25 June 2015 at 2:07 pm

Hi FCKen

If you take the solar panels with you and re-install them at the new house they will not be eligible for the feed-in tariff, as they will then count as a second hand installation. So moving them is definitely not a good option.

As you see from the dates this blog was written in the early days of FITs where people were experimenting to see what they could get away with. The norm is that the solar panels stay with the house as does the FIT. You can use it as a selling point that the new owner will get £x per year income from the solar, and will hopefully get a higher valuation for it as a result. Some estate agents are more switched on about the benefits of solar than others!

The installers where your new property is are wrong about ownership staying with the owner. I suggest that if it did, it would make your property much less attractive to prospective buyers as they would essentially be entering into a 'rent a roof' scheme and have panels on their roof owned by someone else. You'd also have to spend a lot on lawyers to draw up an agreement that kept everyone (including the mortgage company of the person buying your house) happy.

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FCKen

FCKenComment left on: 24 June 2015 at 1:39 pm

So now confused.

I am thinking of moving house and I asked my FIT supplier if I can move the F IT with me to  the new house and installation.They said no it remains with the installation and the house.

I then asked what happens if I take the exisitjng installation with me. They said the FIT remains with the house.

Finaly I asked a new instalation team for Solar PV in the new location and they advise that the FIT remains with the owner not the property or the instalation.

I cant find anything on the OFGEM site.

Any ideas?

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Cathy Debenham

Cathy DebenhamComment left on: 3 December 2013 at 4:40 pm

@maryEn While you're right that it's possible, it may cause problems for the buyer in arranging a mortgage, as they have quite strict stipulations about what is and isn't acceptable in the lease. Essentially you are creating the same situation as the rent a roof companies outlined in this blog

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maryEn

maryEnComment left on: 2 December 2013 at 5:57 pm

As a solicitor I know it is perfectly possible to sell a house and keep the Fit payments. You have to have a lease from the new owner of the solar panels (or airspace) just like those entered into by the companies who install solar panels and keep the FIT payments and let you have cheaper electricity. I doubt any buyer will pay  extra for the panels as they  would hope the seller will jsut leave them and transfer the FIT payments to them.  But the Fit payments are worth a lot of money and will keep going for  say 25 years - the lease should be up to thirty years from when they were installed so eg twenty years long if the solar panels have been in place for ten years..

Estate agents keep saying the seller should just hand over the panels on the sale but they don't have to. The buyer will benefit from having cheap electricity.

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Marble Solar Ltd

Marble Solar LtdComment left on: 23 April 2012 at 4:45 pm

As said in "Feed-in Tariffs, Governments Response to the Summer 2009 Consultation (February 2010)", published by the Dept of Energy and Climate Change, “Given the length of FITs payments (10 to 25 years), there will be frequent instances where the ownership of the property hosting the generating equipment on which FITs is paid changes. We expect standard property ownership rights to be applied to the ownership of the generating equipment. When ownership of that property changes we will expect the ownership of the generating equipment and FITs payments to also change and pass to the new owner of the property and this will need to be notified to the scheme administrator. It will be left to the market for the previous owner to be compensated for the remaining value of the FITs payments and on-site benefits (e.g. through a higher price paid for their property).”


So, hence, when a house is sold, the new owner should benefit from the previous owner contracted FITs.

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Cathy Debenham

Cathy DebenhamComment left on: 5 December 2011 at 2:35 pm

My understanding is that they would get the same rate as the original owner did for the remaining term. As you say, it's a pretty attractive prospect for a potential buyer.

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deeppurple

deeppurpleComment left on: 21 November 2011 at 7:34 pm

If the ownership of the panels changes does the new owner benefit from the previous owner's contracted FIT rate and for the remaining term? If so then this should add a reasonable amount to the value of the house. If not then, particularly in light of the 50% slash in FIT rates which is on the table, there must be scope for a legal arrangement for the previous owner to continue to reap the FIT, maybe with some percentage payment to the new owner.

I suspect  that this is an issue which will fairly soon gather some case history and a few test cases will establish a set of viable options and associated benefits, togther with some legal paperwork which will protect both the seller and buyer.

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