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Shedding some light on solar panels

21st March 2013 Print

Solar panels may help cut electricity bills, but with more households choosing to install the renewable energy technology, a number of issues are now arising when home owners come to sell. According to Matthew Gray, property director at Pagan Osborne, transferring contracts can be problematic.

In particular, he warns that the system of ‘renting a roof’ to an energy company can be a barrier to a successful sale.

He said: “With increasing fuel prices, many householders are looking at solar panels as a way in which to save money. They offer the prospect of generating electricity and some extra income through selling the surplus back to the National Grid, under the Feed-in Tariff system. And in many ways, solar panels should be a strong selling feature when a home goes on the market.

“However, problems are occurring if and when a seller has leased their roof to the solar panel company. Many companies will fit the solar panels free of charge in exchange for the rights to sell the excess power back to the National Grid. The companies involved effectively rent the roof for 25 years and while this is not necessarily a problem for a householder who intends to stay in the house, if they are selling, it makes things difficult for potential buyers.

“Getting out of these contracts can prove costly but more importantly, mortgage lenders are not always willing to fund the purchase of a property which is subject to such an arrangement.

“For potential buyers, a solicitor will be able to check the background to the solar panels, but for householders thinking about installing, they should consider whether they may be trying to sell their property in the future and what implications this may have.”

Solar panels are becoming more commonplace and last year, the UK government estimated that by 2020, nearly four million homes across the UK will be powered by the sun.