I'm selling my house with solar panels - how do I get the most value?
Posted by Jordan Willis on 5 September 2017 at 2:23 pm
Solar panel installation is a commitment in more ways than one. While the initial cost of installing solar PV onto your home is often repaid in energy savings and a Feed-In Tariff, a second sense of commitment comes from necessary time spent in one house to see a return on your investment. The life of a solar panel usually reaches upward of 20 years and the average Brit moves house 8 times in their life, so selling a house with solar panels must be a common occurrence. While one may imagine that selling a house fitted with solar PV would instantly boost its market value to recognise the energy saving and earning potential of the property, the reality can sadly be a little different.
If you are planning on selling up within 20 years of installing solar PV, then normal practice is for feed-in tariffs to automatically be transferred onto the new homeowner. For more information on this topic, read our specific blog about feed-in tariffs. Thus, it is likely that the cost incurred by installing solar panels has to be recouped through an increased sales value. Though there are circumstances whereby you can keep financial control of the feed-in tariff, similar plans have been wrought with technical and legal difficulties for the new homeowners.
A recent study from the USA showed that there was an increase in house prices (of about $4000/kW) across eight states for houses selling with solar technology. Studies in the UK have also noted correlations between energy efficiency ratings and sales values. All of this is encouraging news for a return on investment on selling a house with solar panels, but all may not be as simple as it seems.
In 2015 the Solar Trade Association (STA) spoke to a wide range of people, including the Registered Institute of Chartered Surveyors, the Council of Mortgage Lenders, housing developers, builders and valuation surveyors, and unfortunately concluded “that there was a poor understanding of the cost/benefits that [solar PV] provided”. The STA described the RICS advice as “out of date and very generic, with no formal process for assessing the property in place, and the CML also provides very little direct advice on the issue. Housebuilders were broadly hesitant to install solar panels as they weren’t confident of a return on investment on the product.
All of this sounds rather bleak. However, while formal organisations may not be able to provide rigid processes for evaluating the value of solar panels, there are steps you as an individual can take. It is vital to provide your estate agent with as much information possible, and boil down the financial benefits of solar panels. Keep solid proof in the form of low electricity bills, FiT statements and EPC (Energy Performance Certificate) charts to give to agents and potential buyers. While estate agents often do very little to market the benefits of solar panels, and often the EPC isn’t requested by potential buyers, there is a host of evidence that suggests that an energy efficient home is a real selling point. Solar panels have been known to raise a house’s EPC rating by 2 grades, which one study suggests could raise the value of an average house by £16,000. Zero Carbon apartments sell for 2% more than their carbon producing equivalents, and it is estimated properties with solar PV could sell up to 30% quicker than those without. Obviously the value increase depends on the capacity and age of the solar panels, but these are certainly encouraging statistics.
The point remains that a lot of the effort to advertise these benefits must come from the individual homeowner. Direct information from trusted sources and local estate agents is often scarce, so while knowledgeable buyers may well be hugely enthusiastic about buying a house with solar PV due to the energy saving costs, making the buyers knowledgeable in the first place can be an issue. Making sure to provide the relevant documentation and providing easy to digest information about the benefits of solar PV to both buyers and agents is the best way to secure a proper valuation of the technology. Unfortunately, it seems that this will have to be another thing added onto the long to-do list when moving home!
Have you had experience selling your house with solar panels? Tell us about it in the comments section!
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About the author:
Jordan is a full-time intern here at YouGen this summer, specialising in online marketing as well as driving the site forward as part of an ambitious development plan.
Jordan is interested in all aspects of energy and sustainability and has a strong background in social media marketing and engagement.
If you have a question about anything in the above blog, please ask it in the comments section below.
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