Problems With Selling a House with Solar Panels: What to Do

Many people view solar panels as a welcome addition to a property. Demand for more eco-friendly homes has been steadily growing in recent years, and numerous reports have revealed that the coronavirus pandemic has made us more ethical consumers. Add to this sky-rocketing energy bills, and you’d think that a property with solar panels would be a hit with many house hunters.

However, there are often problems with selling a house with solar panels. Why? And how can you overcome them?

How Common Are Solar Panels on Residential Properties in the UK?

According to recent government figures, more than 1.5 million homes in the UK now have solar panel installations, equating to roughly 5% of the country’s 29 million homes — a significant increase from pre-pandemic levels.

Cornwall is home to the most solar-energy sites due to its high number of sunshine hours compared to the rest of the UK.

The number of residential properties with solar panels has risen dramatically since 2010, following the introduction of the government’s “feed-in tariff”  (FiT). The FiT scheme paid homeowners for generating their own renewable energy via solar panels. Many companies responded by effectively leasing homeowners’ rooftops for up to 25 years, installing solar panels, and collecting the FiT payments — while the homeowner benefited from free electricity.

The FiT scheme ended in March 2019 and was replaced by the Smart Export Guarantee  (SEG) in early 2020, which offers smaller payments for exported energy. Despite this, the number of UK homes with solar panels continues to grow rapidly. As of the latest data, over 1.5 million homes (around 5% of all UK properties) now have solar installations. Rising energy costs, increased time spent at home, and greater environmental awareness are driving continued demand, suggesting solar panels will become increasingly common on residential properties.

Here’s an updated version with the latest data incorporated:

Is It a Problem Selling a House with Solar Panels?

For many buyers, solar panels will be a significant selling point. The benefits include:

• An improved Energy Performance Certificate (EPC)
• Low electricity bills
• A lower carbon footprint
• Potential to make money through the SEG scheme or ongoing FiT payments
• A higher property valuation
• Low maintenance costs
• A quicker house sale.

However, if a homeowner has leased the solar panels to a company for up to 25 years rather than owning them outright, they could encounter difficulties when selling:

• Buyers Are Unable to Secure a Mortgage

Many mortgage companies will be reluctant to lend a potential buyer the money they need to buy if the roof has been leased to a solar-power company. So, unless you find a cash house buyer, selling could take considerable time.

• Cannot Identify Who Owns the Solar Panels

Many of the companies that leased homeowners’ rooves for solar panels have since gone into liquidation. Finding out who the panels belong to can be a challenge, and this information is necessary to transfer future FiT payments to the new homeowner.

• The Owner of the Panels Refuses Consent to Sell

A solicitor will need to check the terms of the lease agreement to find out if the homeowner requires their consent to sell. Some agreements stipulate that the owner must also obtain consent before extending the property, which may put off any buyers who plan to make such changes.

• The Leasing Company Has the Right to Lease the Roof Space Indefinitely

If the lease terms allow the company to extend the 25-year term indefinitely, this could dissuade many potential buyers from proceeding with the purchase.

• An Exit Fee is Payable

If you decide to end the lease agreement before the full term, the leasing company may charge an early exit fee that could be prohibitive — potentially tens of thousands of pounds.

• Endless Red Tape

Even if you own your solar panels outright, there will be a lot more paperwork to complete when selling than if your property did not have solar panels. This can add stress and delays to the house sale process.

How Can You Sell a House with Solar Panels?

Before marketing your property, make sure you have all the information a potential buyer will need. If a company leases your roof space, find out if they are still in operation and, if not, do all you can to find out who the new owner is. You must understand your position before listing your home on the market.

You will need the following documentation ready to share with any interested parties:

• The installation company’s details
• The electrical installation certificate
• Proof of planning permission/building regulation consent
• The Microgeneration Certification Scheme (MCS) certificate
• Warranties for the system components
• Details of the leasing company (if there is one and if this differs from the installation company)
• If the property is leasehold, permission from the freeholder to install the panels.

Potential buyers may also be advised to have a structural roof survey carried out.

Can I Take My Solar Panels to My New House?

If you own the solar panels outright, you can take them with you. However, removing and installing the panels on your new home can be extremely expensive. Removing the panels may also cause damage to the roof, which will impact the value of your property and may jeopardise the sale.

Consequently, most people choose to negotiate with the new buyer instead. Make it clear you are prepared to cover the cost of obtaining a “deed of variation”, which is the document required to transfer the rent-a-roof lease to the new homeowner. This typically costs no more than £200.

How to Sell Your House with Solar Panels Fast

If you’re struggling to sell your home because it has solar panels installed, House Buyer Bureau can help.

We have been buying properties in the UK since 2010. Our customers enjoy a reliable and efficient “we buy any house” service, with no fees and no hassle. Regardless of the location and condition, you can sell your house fast to us.

Get in touch today to request your free, no-obligation cash offer.

Chris

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

View articles by Chris