If you’re a homeowner, you may be wondering whether or not solar panels increase your home value. The answer is yes! But, the extent to which they can do so depends on several factors.
The need for cost-effective energy efficient alternatives grows as energy bills climb. Also, as a result of global climate issues, there’s a growing demand for affordable yet environmentally responsible energy sources.
With an over 80% decrease in their cost since 2010, many households are turning to solar panels as a more eco-friendly and affordable source of electricity. Here, we explore the numerous ways having solar panels installed can increase the value of your home and address some of the potential drawbacks of installing them.
Do Solar Panels Add Value to Your Home?
Potential buyers consider solar panels a sustainable feature and an add-on to any property. Because of that, solar panel investment ensures you’ll usually have a more marketable home if you ever decide to sell it.
Due to the necessity for advertised properties to have an Energy Performance Certificate (EPC), energy efficiency has become a major factor for many buyers. With that in mind, solar panels improve a property’s EPC rating and therefore its attractiveness to buyers.
On top of having a good EPC score, a customer will instantly gain the benefits of solar panel installation without the associated expense or inconvenience. Thanks to their various benefits, buyers are willing to pay more for houses with installed solar panel systems.
How Does Solar Increase Home Value?
According to Zillow, home values increase by more than 4.1% as buyers are willing to pay much more for properties powered by solar panels. Homeowners can typically expect increases in value from £9,500 to more than double that, especially, if the property isn’t fully covered by the electric grid.
Here are some of the main reasons why installing solar panels increases home value.
Dependable Power Source
Power outages in some areas are an inconvenient fact of modern life. The national grid lights up millions of homes, which sometimes comes at the cost of over-usage. Machines and cables degrade over time, so interruptions in power are inevitable.
Some areas suffer from power outages more than others though. For example, 33% of the residents in Plymouth reported struggling with power interruptions in 2022. Additionally, 28% of those living in Southampton, Norwich, and Edinburgh have similar experiences.
Installing solar panels as a hybrid or on-grid auxiliary system along with the national electricity network guarantees uninterrupted power in a property. This is a desirable feature in areas where the electricity supply is sometimes erratic and undependable.
Access to Power in Remote Areas
Solar energy can work completely on its own, even when there’s no electric grid. A medium-sized house could get all of its power requirements from an off-grid solar system.
Naturally, the initial costs for this type of system are substantial, but there are several governmental subsidies to ease the burden and make such house improvements affordable.
Remote areas that were previously inaccessible are now ready for development. You can build your dream farmhouse, holiday home, or cabin in the woods without worrying about electricity.
The best part is that whenever you think about selling your property, your investment would pay dividends. Additionally, you shouldn’t have a problem finding potential buyers.
Governmental Incentives for Going Green
The Smart Export Guarantee (SEG) incentivises small electricity producers, such as domestic households, as they are able to receive payments for excess energy produced by their solar system that they sell back to the national grid. This effectively replaced the Feed in Tariff (FiT), which while still active is no longer open to new applicants.
Under the FiT system, homeowners receive a fixed reward for every unit of solar power they generate. To sweeten the deal even more, this monetary incentive is tax-free, and it continues for 20 years from the day of signing for a solar system. Thus, homeowners not only save on their utility bills, but they also get financial rewards for making an environmentally conscientious choice.
The ECO4 Scheme is another governmental programme, with a £4 Billion fund, aiming to improve energy usage across the UK. There are many benefits for homeowners who are considering installing solar systems and heat pumps plus ongoing rewards for solar-powered properties.
The official stance on energy is clear. Households are incentivised to adopt solar technology and also benefit from any surplus energy produced. Clearly, a home with solar panels has extra market value due to these financial rewards.
Lower Utility Bills
According to Ofgem, an average home in the UK pays around £2,500 annually for gas and electricity. Electricity bills are making up a larger percentage of many household budgets, and there’s no sign that this situation will be reversed in the near future, unless people adopt renewable technologies.
A source of free sustainable energy is highly appreciated under the circumstances, even if the initial costs of installation are high. A simple comparison proves that the initial costs even out over time. Potential property buyers are well aware of this, and so, they wouldn’t mind paying extra for a property with solar panels if it is going to impact on their energy costs and save them money in the long-term.
Contributing to Environmental Wellness
Increasingly, people are coming to appreciate the importance of protecting the environment. That’s why many homeowners are willing to invest in clean renewable energy.
According to Renewable Energy Magazine, 130,596 new homes in the UK opted for rooftop solar panels in 2022. This is more than the number of installations in the previous three years put together. That amounts to 80% growth in new solar PV installations in only 12 months, which is an incredible rate.
Factors that Affect the Value of Your Property
Due to certain factors, your home value may not always rise markedly after installing solar panels. It’s important to take note of what might affect the valuation of your property, and address these issues before deciding to offer your house on the market.
hese factors include ownership of solar panels themselves and the conditions of the solar panels. Let’s take a closer look at them.
Ownership of Solar Panel
Your solar panel system should be legally owned by you if you want to sell your house with them included as part of the package. The solar panels are only yours if you’ve purchased them or taken a loan. If you don’t legally own your solar panels, this will complicate selling your solar home.
So, picking the right financing option is crucial if you intend to sell your property after installing solar panels.
However, if you choose a solar lease, your solar supplier will continue to be the official owner of the panels. In order to sell your home, you’ll have to buy the lease.
Alternatively, you can transfer it to the new owner, which won’t cost much money. But, the new owner has to meet certain criteria that qualify them to legally own the panels; one of which is having a credit check.
That said, transferring the lease may lengthen the sale of your home if you’re unable to find a qualified customer for the lease requirements.
Condition of the Solar Panel System
Having a good-quality solar panel offers you longer warranties than cheaper ones. So, invest in high-quality solar panels if you want to increase the chances of successfully selling your property. Also, you’ll need to maintain it properly throughout the years to prevent it from declining in performance and energy savings.
Moreover, you must consider how old your solar panel system is; homes with modern systems are worth more than homes with outdated ones. For example, if your solar panels are older than 15 years, this means they may only have another 10 years of life remaining, which will decrease your potential property value increase.
Do Solar Panels Help You Save Money?
You certainly want to maximise the return on investment as you install solar panels in your home. That’s why it’s best then to consider the following points before making this decision.
Cost of Installation
Recently, the solar panels cost has decreased dramatically, and there may also be financial incentives to help offset the installation costs. That said, solar panel cost can differ based on several factors, including the size and type of the solar panel system, the type of installation, and the location of the property.
In the UK, installing a 4kWp solar panel system typically costs between £5,000 to £8,000. However, larger or more complex installations may be substantially more expensive and impact how much value is actually added to a property.
Maintenance and Repair Costs
Although solar panels require minimal maintenance, you still have to consider the cost of cleaning and maintaining them. Solar panels should be frequently cleaned to remove dirt and debris and maintain performance.
The cost of cleaning is variable depending on the size, accessibility, and method used to clean them. For instance, some people clean their panels themselves, while others have a professional clean them.
Additionally, solar panels require regular monitoring to detect issues within the system and resolve them to maximise their efficiency. Monitoring costs may differ depending on the provider and the degree of service provided.
Energy Requirements
Determine your energy needs, taking into account how much electricity you use, when you use it, and any seasonal variations. You’ll then be aware of the size and quantity of panels required to meet your energy needs.
Roof Suitability
Roof suitability is another factor you should consider before installing solar panels. Ideally, a roof should face south or southwest, with minimal shading during peak sunlight hours.
With that in mind, the amount of electricity generated depends on how strong the sun is, but solar panels can generate electricity even if the sun doesn’t directly hit them. However, we don’t advise installing solar panels on roofs facing north.
Solar Panel FAQ
How long do solar panels typically last?
Solar panels are durable and long-lasting. They typically last around 25 to 30 years, with some panels surviving even longer. However, several factors affect their lifespans, such as the panel’s quality, brand, and installation.
Are there any downsides to installing solar panels in my home?
In general, the benefits frequently outweigh the negative aspects. However, here’s a list of the potential downsides to help you see the full picture.
- Weather dependency: Solar panels are dependent on the weather to generate electricity. This means it produces less electricity on rainy or cloudy days.
- Aesthetics: Due to their bulky appearance, solar panels are considered visually unappealing. This can be an issue for those who cherish their home’s aesthetics.
- Maintenance: For solar panels to function efficiently, regular maintenance is necessary. Cleaning the panels, checking the wiring, and fixing any damage all fall under this category.
Can solar panels decrease home value?
While solar panels won’t usually decrease your home value, some buyers may not see the obvious benefits of solar panels. This would make them unwilling to pay more for a solar home.
Is a bigger solar system better?
When it comes to energy production, bigger isn’t necessarily always better. The important thing is to install a system that generates a sufficient amount of power for the house. Excesses might not be rewarded or reflect on the value of the house.
Conclusion
To summarise, installing solar panels is a great way to increase the value of your home, while also contributing to environmental sustainability.
Moreover, the cost of solar panels has decreased in recent years, with the money-saving benefits increasing. Some factors affect the added value of your home, including the ownership and the condition of the solar panel system.
Areas with no access to the national grid, or with an electricity network that’s not too predictable, benefit well from solar energy. Home values in these areas can increase substantially.
