Buying a house with solar panels

Solar panels - buying a house with solar panels

If you’re buying a house with solar panels, you could find yourself with a problem. While solar panels have numerous advantages for existing homeowners, they can cause a headache for homebuyers.

There are several reasons why solar panels have proved popular with homeowners:

  • * Environmental benefits of using renewable energy rather than fossil fuels
  • * Cheap or free electricity for the home
  • * Feed In Tariffs that pay the homeowner for the green energy they generate

When Feed In Tariffs were introduced in 2010 they were very generously funded. With this incentive, it’s estimated that over 900,000 solar panels have been installed across the UK. But the Feed In Tariff has reduced significantly since 2012 and it was abolished for new installations after 31st March 2019.

The number of houses with solar panels means that they increasingly crop up in conveyancing transactions.

What do I need to know about buying a house with solar panels?

Homeowners had two options:

  • Leased solar panels
  • Fully owned solar panels

In most cases where solar panels were installed, the panels were fitted free of charge by a solar power company. The homeowner then leased the panels to the power company, usually for a 25 year term. The power company then took the benefit of the Feed In Tariff. The homeowner had low energy bills plus the prospect of the Feed In Tariff after 25 years.

However, over time some drawbacks have become apparent:

  • * Some mortgage lenders have issues with the fact that a large part of the roof is leased to a solar power company, not owned outright by the homeowner.
  • * If the power company has assigned the management of the panels to an agent, the agent may charge an extensive fee when the house is sold.
  • * The terms of the lease with the power company may mean that the homeowner has to gain their consent to extend the house or even to sell it! There may also be a clause that means the homeowner has to pay compensation for lost revenue if the solar panels have to be temporarily removed for roof repairs.
  • * A large number of the original solar power companies have ceased trading so it may prove difficult to find out who owns the panels.

If the homeowner owns the panels outright, these problems will not apply. However, if you buy a house and take ownership of the panels, you will be responsible for maintenance costs.

Should I buy a house with solar panels?

The issues outlined above can often be resolved. Most mortgage lenders will agree to a loan provided the lease meets certain conditions.

For example:

  • * The installing company is properly accredited.
  • * The installation is approved and insured.
  • * The panels can be removed without penalties for missed Feed In Tariff payments.

The more information the seller can provide at the outset (e.g. copy of the lease, planning and building regulations consent, details of any payments) the easier it will be for your property purchase to progress (see more on selling a house with solar panels). Your conveyancer should be able to explain if any of the issues outlined above will affect your property purchase and if there are any major concerns.

At PM Property Lawyers we have helped to buy and sell many properties with solar panels. If you have any questions about this issue, speak to our team on 0114 249 6926 or email info@pmpl.co.uk.

Get an instant conveyancing quote here.

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19 Responses to Buying a house with solar panels

  • Tania Parry says:

    We have bought a house with solar panels, we are supposed to get the free electricity for the house and the feed in tariff still goes to the man we bought from. We are having trouble finding out how we het the free electricity for the house , how does this work?

    • Susan Clegg says:

      Hi Tania,

      Your best bet is to contact the solicitor who acted for you when you purchased the property – they should have the details of the solar panels. Your energy company may also be able to help.

      Best wishes
      Susan

      • Anne jones says:

        Were buying a bungalow with solar panels on the lady were buying of said they were there when she bought it but she now lives abraod can we have them removed and would it cost us

        • Susan Clegg says:

          Hello Anne,

          It will depend if the panels are owned outright by the current owner or if they are leased from a power company. There should be more information in the documentation provided by the seller and your solicitor will be able to advise you on your options. Regarding costs, you would need to discuss this with a company that offers this service.

          PM Property Lawyers

  • Anne jones says:

    Could you give me some information about solar panels

  • Umaima Mohammed says:

    Hi, we are currently in process of buying a house where solar panel has been installed. We have been unable to get the information whether the panel are owned outright by the current seller or if they are leased from power company. Where can we get this information from? Could you please advice? Regards, Umaima

    • Susan Clegg says:

      Hello Umaima,

      If the seller is unable to provide this information, your best bet is to check with your conveyancer. I don’t know what stage you are at with your property purchase, but if your conveyancer has the title documents there may be information there, e.g. regarding a lease.

      Another option is to check the planning portal on your local council’s website – this will show if there was an application for installing solar panels. We suggest that you don’t approach the local council directly as, if no planning permission was given, it may affect obtaining an indemnity policy in future.

      Hope this helps.
      PM Property Lawyers

  • Kieron Nixon says:

    Hi, We have been in a house with a previous FIT. WE finally have all the details of the solar panels. They were owned outright. We have a MCS and the original receipts for the purchase.
    What do I do now that I have the paperwork in order to change the account into our name?

  • Andrew Atkinson says:

    We are currently trying to extend our house we bought 6 year ago . When we bought the property it had solar panels on but we never had a copy of the lease. We contacted the company early last year and asked how much notice would they need if we needed the panels off to start the project. They answered with 3-4 weeks depends on the time of yr . We gave them 8 weeks notice and they told us that they were unable to come out until July and asked for a copy of the plans. We gave them the plans and they told us we cant approve the temporary removal due to the fact the extension would not enable them to configure the system the original way. Where do we stand on this.

    • Susan Clegg says:

      Hello,

      We can’t give advice on individual cases but your best bet would be to go back to the solicitor you used when you bought the house. They may be able to send you a copy of the lease.

      PM Property Lawyers

  • Andrew Atkinson says:

    Hi,
    I’ve left a couple of massages on here and tried your chat service but it doesn’t seem to work.

    • Susan Clegg says:

      Hi Andrew,

      Apologies you haven’t been able to get in touch with us. We will respond to your query as soon as possible.

      PM Property Lawyers

  • Jobymc says:

    I brought home with leasr solar panel in placr ..i was bot not aware of the consequences but now o read many comments about lease solar panal km on tenison i brought home for 250000 and made 10000 for extra toilet and some other work…now i spent only 6 month ..lease solar has 19 years balance .
    Possible to get re mortgage and will resuae my home value if i want to sale?
    Please suggest thank you

    • Susan Clegg says:

      Hi,

      Different mortgage lenders will have their own policies on remortgaging a house with solar panels. We suggest you go back to the solicitor you used when you bought the house regarding the lease.

      PM Property Lawyers

  • Joe says:

    Hello
    I purchased my property around 6 years ago and naively took on a leased solar panel contract (we live and learn). I’ve just spent the last 4 months attempting to get the solar panel company to remove their panels in order for me to carry out roof repairs and fix a water ingress problem. When their engineers finally removed the panels I was informed that there was damage caused during the installation of the panels and the repairs would be carried out at expense.
    The next time I had any correspondence with them they had changed their mind and blamed the ingress on porous tiles that were coincidentally in position right above two of their fixing points. I am in the process of gathering evidence to prove their liability and if successful in this will have proved their attempts at deception.
    The company has been an absolute joke in all aspects of this and I’m determined that they won’t re-install on my new roof and cause more damage. I want nothing more to do with them.
    Do I have any grounds for terminating this contract due to their negligent actions? I’d even be happy to reach an agreement on buying out the contract at a reduced amount but my queries around this have been repeatedly ignored. There is around 17 years left on the contract.
    I hope you can help.

    Thanks

  • Steve De'Ath says:

    Hi
    My parents both died at the end of last year and I’m the sole executor of their estate. They had solar panels fitted several years ago and these are leased. According to Companies House the supplier (Home Sun 2) and the maintenance contractor (Anesco) share the same address however neither are answering their phones and I’m trying to establish whether both these firms are still trading. The reason for contacting them is that we are attempting to sell the property and are trying to obtain some clarity as to who owns the solar panels if the company named on the lease is no longer trading ?
    Can you shed some light on this please. Our family solicitor isn’t offering any helpful advice.

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