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Are Solar Panels a Good Idea?

Maureen Ross

No-one can have failed to notice the rash of photovoltaic (PV) or solar panels that has spread across the nation’s roof slopes over the last couple of years. Property Owners have been embarking on subsidised solar energy generation, tempted by the promise of long-term free electricity and, in some cases, by an income from selling spare electricity to the nation’s power companies.

What Could go Wrong?

Plenty, is the simple answer. The technology itself is sound and durable but some installations will not be as productive as hoped due to basic matters such as geographical location or orientation. In the coming years some unfortunate owners are likely to find that their houses have been rendered un-mortgageable by their venture into green energy.

Owned or Leased?

Some home-owners have paid outright for the panels and their installation, with a typical cost of £10,000-12,000. They benefit from the free electricity generated and additionally sell the surplus to the national electricity suppliers under a system of Feed In Tariffs (FITs). This might save £500 annually on the domestic energy bill and, under the initial higher tariff – which has since been significantly reduced – could produce an income of perhaps £1,000 per year.

The majority of owners, however, have opted for a cheaper method, avoiding the expense of the initial investment, but arguably having more potential drawbacks in the longer term. Here the PV panel providers retain ownership of the panels and take a lease (usually for 25 years) of the roof and airspace above. They install the panels for free and provide free electricity to the home-owner, but retain the income from the FITs payment for themselves. The attraction to the home-owner is obvious: free electricity for the long term.

A 25 year lease of a roof is technically no different from leasing part of the garden, or even part of the house itself. It may be less intrusive on a day-to-day basis, but the legal commitment is no different. Your appointed legal adviser will need to check the terms of the lease for any onerous conditions and also check whether the lease itself is in breach of any covenants contained in the title to the property.

Worryingly, there may be implications for maintenance of the installation or of the roof covering itself. It is not unusual for the roof of an older property to require periodic maintenance during a 25 year period, complete recovering could even be necessary in some cases. It is important to know whether the lease agreement clearly sets out the responsibilities for removing the solar panels while works are carried out. These are the types of queries your legal adviser will address.

Impact on Marketability

Research late last year (2014) showed that nearly half of all lenders expected PV panels to affect the marketability of a property, not least due to their negative impact on ‘kerb appeal’.

Some solar panel installations are more intrusive than others and could deter potential purchasers.

Valuers also have reservations about solar panels. Many are waiting for housing market transactions to demonstrate whether buyers will pay more for houses with PV panels, due to the savings on energy costs, or less because of the visual and legal drawbacks.

Installation Issues

Even when the legal aspects of the arrangement have been properly dealt with, there are still practical implications of having solar panels installed on the roof which remain there for the whole 25 year lease term. Individual panels aren’t particularly heavy but the total additional loading may be significant, especially on roofs with lightweight coverings. Building Regulations approval is required as panels may add more than a third to the weight of the existing roof covering, so a proper initial assessment is critical.

The nature of the installation process means that a degree of damage to the roof covering is almost inevitable. Installing the panel fixings usually involves exposing the supporting structure beneath the existing roof covering. Avoiding any damage during this work is difficult, so completing effective repairs should be a standard part of the installation process.

Installations are much more difficult with some types of coverings, (such as slates) than others. Issues may arise such as whether the roof is still watertight. These details are far beyond the scope of a mortgage valuation inspection, therefore a detailed inspection by a specialist will be necessary to answer these questions. Purchasers of properties where panels have already been installed should commission a private pre-purchase survey.

Early Days

In reality it is still too early to assess the impact on the UK property market of solar PV Panels.

In the meantime, legal advisors, mortgage valuers and surveyors will understandably be cautious in their appraisal of these installations and their long term implications. The financial benefits may be tempting for homeowners, but the priority for solicitors advising purchasers and homeowners will be to ensure that they do not unwittingly become involved in any arrangement which is likely to have a long-term adverse impact on their most valuable asset, their home.

 

Contact W Davies

If you are thinking of purchasing a property with solar panels or have any queries, please call us on 01483 744900 or contact Maureen Ross at mzr@wdavies.com for advice and assistance or to make an appointment with a conveyancing solicitor in Woking.

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