The modern world is increasingly aware of the impact we have on our environment. Recycling is now commonplace and every home sold in England and Wales must come with an Energy Performance Certificate, which rates the property's energy efficiency and environmental impact. Solar panels offer home owners a chance to generate at least some of the energy used on a day to day basis in an environmentally friendly manner.
Homeowners may also be tempted to install solar panels in order to claim the Feed-in Tariff. The Feed-in Tariff is paid by the Government for the electricity generated by the solar panels. The average family will make or save £695 a year by installing solar panels onto the roof of their home.
Buying solar panels is not cheap. If you cannot afford the initial expense there are numerous investment groups who will rent the space on your roof and install their own solar panels. These investment groups would claim the Feed-in Tariff but you would still have the benefit of the electricity generated by the solar panels.
Whilst installing solar panels may seem like an attractive proposition there are a number of important factors to consider:
- The installation of solar panels will normally fall within permitted development rights. This means you would not normally need to obtain planning permission from the local authority before carrying out the installation. However, there is a limit to what you can do under these rights and it is always worthwhile speaking to the local authority to make sure your proposed installation falls within the scope of permitted development
- If your home is a listed building or is situated within a conservation area then permitted development rights would not cover the installation of solar panels and permission would be needed.
- The installation of solar panels is also covered by Building Regulations. The regulations are mainly concerned with making sure your roof is strong enough to support the weight of the solar panels. It is likely that your builder will belong to a Competent Persons Scheme and will be able to issue you with a certificate of Compliance confirming the installation complies with the building regulations. You should check this is the case before the builder installs the solar panels.
- The vast majority of mortgages in England and Wales are subject to restrictions which prevent you from carrying out any structural alterations to the property without the lender prior approval. The addition of solar panels on your roof is a structural alteration and would need consent under the terms of the mortgage. Most mortgages will also contain a condition preventing the borrower from parting with possession of part of the property. If you grant a lease of your roof space to a solar panel company you will granting the investment group an exclusive right to occupy that space and thus parting with possession of that part of the property.
- It is common knowledge that if you fail to meet your monthly repayments then the lender ultimately has the right to repossess your property and sell it to recover the money owed under the mortgage. What is less widely appreciated is that the mortgage does not just secure repayment of the loan, but also compliance with the other terms and condition of the loan. It is therefore very important to ensure that you have the permission of your mortgage lender before having solar panels installed.
- You should also consider what impact the solar panels will have on the saleability of the property in the future. If you have granted a lease of the roof space, in order for the panels to be installed, that lease remains in place, even when you sell the property. Any buyer would need to buy your property, subject to the terms of the lease. There is the risk that a buyer could be put off by the presence of the panels and therefore decide not to buy.
- Also, some lenders are reluctant to lend where there are solar panels, especially if the terms of the lease are not acceptable to them. This might prevent a buyer getting a mortgage on the property in the future.
If you are thinking about installing solar panels or purchasing a house which has already had solar panels, you may wish to seek advice from a member of our Property team on 0113 264 4414.Back to Blog