If you have photovoltaic solar panels fitted to the roof of your house and are getting regular Feed-In Tariff (FIT) payments, you may be wondering how to deal with this when you put your house on the market.
Here, Mike James – an independent property writer working with Peter Barry Estate Agents, provides his top tips for selling a house with an existing solar PV installation.
How will solar PV affect the value of my house?
The good news is that your home is virtually guaranteed to have gone up in value as a result of the solar investment you put into it.
Solar PV panels can add value to your property in 3 ways:
- As you’ve no doubt experienced yourself, your energy bills are lower as a direct result of using solar power. This is clearly an attractive proposition to home buyers. According to a recent study, 1/3 of UK buyers would be happy to pay more for a house with a solar PV installation if it means they can benefit from lower electricity bills, particularly in view of the current steep rise in traditional energy prices.
- Then there’s the government backed Feed-in-Tariff (FIT), the regular income you are getting for selling a proportion of the solar energy generated on your roof to the National Grid. The rate of return you will be getting depends on when your panels were installed, and rates have changed drastically since the scheme’s launch in 2011. If you decide to sell your home within 20 years of the solar PV installation, the FIT payments will pass onto the new homeowner – essentially free income that will push up the value of your home to any potential buyer.
- What’s more, your solar installation is also likely to affect your home’s EPC (Energy Performance Certificate) grade, now a requirement for every UK home being sold. Solar panels have been known to raise the EPC rating by at least 2 grades, and this is reflected in an uplift in the value.
When is the best time to sell a home with solar PV?
When it comes to selling a house with an existing solar PV installation, there are several factors to consider:
The ‘younger’ your solar installation when you sell your home, the more appealing it will be to potential buyers. For one thing, the panels themselves will have many years of warranty left on them, bringing extra peace of mind. More importantly perhaps, the FIT scheme itself will have longer left to run (up to 20 years maximum, depending on the exact tariff), meaning more ‘free’ payments for the next owner.
On the downside, however, selling your home too soon after fitting solar PV panels means that you may lose out on the return from your initial investment. Depending on the original cost of your solar PV installation and the FIT rate applicable at the time of commissioning, you should normally expect to earn the initial payout back in FIT payments and energy saving in around 7-8 years.
FIT rates have been reduced substantially since the launch of the scheme 5 years ago. The latest official regulations can be viewed here while current FIT rates are detailed here. The table below shows the digression dates when rates were changed by the Government up to 2015.
|Digression Date for Solar PV||Feed-in tariff rate (pence / kWh)|
In order to balance both the return on your solar investment as well as the maximum sale value of your property, it makes most sense to sell your home within, say, 8-15 years of the date of your solar PV installation. If you wait until the end of the FIT contract, your property will still be attractive to buyers due to its increased energy efficiency and lower utility bills. And as long as all the solar system components themselves are of good quality and in good condition, or possibly still under warranty, there should be no problem.
Top tips for selling a house with solar PV panels
Having considered the above issues carefully, you may now be ready to put your property on the market. If you’re ready to proceed, make sure you are fully prepared to take advantage of the added value that solar panels bring to your house for sale:
- Double check that your solar installation is in perfect working order.
- Have all the paperwork and official documentation for your installation readily available. This includes receipts from your accredited installer, the Microgeneration Certificate (MCS), any solar product warranties, FIT contract and payments you have received.
- Provide evidence to show the impact of solar power on your energy bills, perhaps by showing actual electricity bills before and after the installation.
- Find an estate agents who understands the value of solar PV, so that the asking price accurately reflects the added value and effective marketing can take place.
Are the UK Governments Plans for the Energy Sector Smart?
The revolution in the energy sector marches on, wind turbines and solar panels are harnessing more renewable energy than ever before – so where is it all leading?
The UK government have recently announced plans to modernise the way we produce, store and use electricity. And, if realised, the plans could be just the thing to bring the energy sector in line with 21st century technology and ideologies.
Central to the plans is an initiative that will see smart meters installed in homes and businesses the length and breadth of the country – and their aim? To create an environment where electricity can be managed more efficiently.
The news has prompted some speculation about how energy suppliers will react and many are predicting a price war. This could benefit consumers of electricity and investors, many of whom may be looking to make a profit by trading energy company shares online using platforms such as Oanda – but the potential for good news doesn’t end there.
Introducing New Technology
The plan, titled Smart Systems and Flexibility is being rolled out in the hope that it will have a positive impact in three core areas.
- To offer consumers greater control by making smart meters available for all homes and businesses by 2020. Energy users will be able to monitor, control and record the amount of energy they use.
- Incentivise energy suppliers to change the manner in which they buy electricity, to offer more smart tariffs and more off-peak periods for energy consumption.
- Introduce new standards for electrical appliances – it is hoped that the new wave of appliances will recognise when electricity is at its cheapest and at its most expensive and respond accordingly.
How the Plans Will Affect Solar Energy
Around 7 million houses in the UK have solar panels and the government say that their plan will benefit them as they will be able to store electricity on batteries. The stored energy can then be used by the household and excess energy can be exported to the national grid – in this instance lower tariffs or even payment for the excess energy will bring down annual costs significantly.
The rate of return on energy exported to the national grid is currently between 6% and 10%, but there are many variables to take into account, such as, the cost of battery storage and light levels. Still, those with state-of-the-art solar electricity systems could end up with an annual profit after selling their excess energy.
The Internet of Things
Much of what the plans set out to achieve are linked to the now ubiquitous “internet of things” – where, for example, appliances and heating systems are connected to the internet in order to make them function more smartly.
Companies like Hive have already made great inroads into this type of technology, but the road that the government plans are heading down, will, potentially, go much further -blockchain technology looms and has already proved to be a game changer in the world of currency.
It has already been suggested that the peer to peer selling of energy and exporting it to the national grid may eventually be done using blockchain technology.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Don and Alex Tapscott, Blockchain Revolution (2016)
The upshot of the government’s plans for the revolution of the energy sector, is that technology will play an indelible role in making it more efficient, more flexible and ultimately more sustainable.
4 Case Studies on the Benefits of Solar Energy
Demand for solar energy is growing at a surprising rate. New figures from SolarPower Europe show that solar energy production has risen 50% since the summer of 2016.
However, many people are still skeptical of the benefits of solar energy.Does it actually make a significant reduction in our carbon footprint? Is it actually cost-effective for the company over the long-run?
A number of case studies have been conducted, which indicate solar energy can be enormously beneficial. Here are some of the most compelling studies on the subject.
1. Boulder Nissan
When you think of companies that leverage solar power, car dealerships probably aren’t the first ones that come to mind. However, Boulder Nissan is highly committed to promoting green energy. They worked with Independent Power Systems to setup a number of solar cells. Here were the results:
- Boulder Nissan has reduced coal generated electricity by 65%.
- They are on track to run on 100% renewable energy within the next 13 years.
- Boulder Nissan reduced CO2 emissions by 416,000 lbs. within the first year after installing their solar panels.
This is one of the most impressive solar energy case studies a small business has published in recent years. It shows that even small companies in rural communities can make a major difference by adapting solar energy.
2. Valley Electric Association
In 2015, the Valley Electric Association (VEA) created an 80-acre solar garden. Before retiring from the legislature, U.S. Senate Minority Leader Harry Reid praised the new project as a way to make the state more energy dependent and reduce our carbon footprint.
“This facility will provide its customers with the opportunity to purchase 100 percent of their electricity from clean energy produced in Nevada,” Reid told reporters with the Pahrump Valley Times. “That’s a step forward for the Silver State, but it also proves that utilities can work with customers to provide clean renewable energy that they demand.”
The solar energy that VEA produced was drastically higher than anyone would have predicted. SolarWorld estimates that the solar garden created 32,680,000 kwh every year, which was enough to power nearly 4,000 homes.
This was a major undertaking for a purple state, which may inspire their peers throughout the Midwest to develop solar gardens of their own. It will reduce dependency on the electric grid, which is a problem for many remote states in the central part of the country.
3. Las Vegas Casinos
A number of Las Vegas casinos have started investing in solar panels over the last couple of years. The Guardian reports that many of these casinos have cut costs considerably. Some of them are even selling the energy back to the grid.
“It’s no accident that we put the array on top of a conference center. This is good business for us,” Cindy Ortega, chief sustainability officer at MGM Resorts told Guardian reporters. “We are looking at leaving the power system, and one of the reasons for that is we can procure more renewable energy on the open market.”
There have been many benefits for casinos using solar energy. They are some of the most energy-intensive institutions in the world, so this has helped them become much more cost-effective. It also helps minimize disruptions to their customers learning online keno strategies in the event of any problems with the electric grid.
4. Boston College
Boston College has been committed to many green initiatives over the years. A group of researchers experimented with solar cells on different parts of the campus to see where they could produce the most electricity. They discovered that the best locationwas at St. Clement’sHall. The solar cells there dramatically. It would also reduce CO2 emissions by 521,702 lbs. a year and be enough to save 10,869 trees.
Boston College is exploring new ways to expand their usage of solar cells. They may be able to invest in more effective solar panels that can generate far more solar energy.
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