What to Check When Buying a House With Solar Panels

Written by Adele MacGregor

7th May 2021 (Last updated on 16th Feb 2023) 5 minute read

Can I Get a Mortgage for a Property with Solar Panels?

When it comes to applying for a mortgage for a property with solar panels, you will need to be aware of how the solar panels were obtained.

There should cause no issues with mortgage lenders if they are owned outright. They should also be covered by warranties and guarantees. You will simply need to get insurance to cover the solar panels.
If the solar panels on the home are leased and/or were installed as part of a “Rent-a-Roof” scheme, you may face complications in obtaining a mortgage.

The fitted solar panels must meet the recommended standards. If they do not, this can hinder your mortgage application. The lender could refuse a mortgage completely if the property is deemed a risky investment as a result of the installation.
With this in mind, a property survey is essential. Solar Panels could potentially be hiding issues with the roof or home. A thorough building survey is a vital step in buying a home.

The seller should provide you with all the paperwork you need relating to the solar panels and these can be requested by your conveyancer. It is important that you have the warranty information for all the different parts of the solar panel installation.

The majority of solar panels have a warranty of around 25-30 years. It's important to get a copy of this from the previous homeowner. You will need to know how much of the warranty remains and what it covers.

Many solar panel installations come equipped with monitoring technology which requires log-in details. This can be supplied by the seller or the company that installed the panels.

Leased Solar Panels

If you purchase a home with leased solar panels, under Rent-a-Roof schemes, you will be bound by a lease. This may include maintenance cost obligations, which you will be liable for. It would be wise to factor this into your budget when preparing for the cost of buying a house.

There may also be certain access rights granted to the lessor (the company that leased the solar panels). In these circumstances, a lender may be unwilling to approve a mortgage.

Further issues can arise if the installation was carried out by a company whose legal paperwork was not drafted in accordance with the Council of Mortgage Lenders (CML) guidelines or not certified by the Microgeneration Certification Scheme (MCS).

You should try to obtain a copy of the solar panel lease for your conveyancing solicitor. Additional checks required can cause delays in the conveyancing process. Ensure you have a reliable and trusted surveyor by comparing solicitors in your area.

Who Owns The Solar Panels on a Home?

Solar panels are most commonly fitted to the roof of a house. However, owning the house doesn't mean you own the solar panels.

If you purchased the solar panels outright, you will legally own them. In some instances, they will be purchased on credit or through a lease.

What is the Smart Export Guarantee?

In January 2020, the UK Government introduced a new scheme - known as the Smart Export Guarantee (SEG) - to pay households that install solar panels.

The unused electricity is then pumped back into the national energy grid. Previously the Government offered the Feed-in-Tariff scheme.

Check the Feed-in Tariff Details

Feed-in Tariff (FiT) was a scheme created by the government to encourage the use of renewable energy in homes. The scheme began in 2010 and ended in 2019.

The energy produced and not used by homeowners' solar panels was sent to the National Grid. This created an investment for homeowners and helped lower their energy bills. Also called the 'Rent a Roof' scheme, the person would receive a Feed-in Tariff for 20 years or more.

This service offered free installation of solar panels. As they were part of a lease, this has led to homeowners becoming bound by this until the lease ends.

If you're moving into a property that receives FiT, you and the previous owner will need to complete a transfer of ownership. Once complete, you will then receive the Feed-in Tariff contracts and payments.

How to Get Out of a Solar Panel Lease in the UK

If you're not happy to continue with the solar panel lease of a property you have purchased, there are a handful of ways you can potentially cancel it. Here are the options to consider:

• Buying out of the remainder of the lease
• Purchasing the solar panels

Each individual company will have its own regulations. You'll need to contact them about this.

Moving Into a House with Solar Panels

After moving into your new home, it's important to get the most out of your solar panels to ensure they continue operating at maximum efficiency. Here are some things you will want to do:

• Budget for Maintenance Costs - Although the costs for maintaining solar panels are low, upkeep is an essential part of owning them.
• Operating Efficiently - This maximises the savings they provide. The panels should be checked by a specialist before buying the property.
• Cleaning Costs - You may also want to factor in the cost of cleaning the panels when required.

The Pros and Cons of Buying a House With Solar Panels

Here are the pros and cons of buying a home with solar panels:

Selling a House with Solar Panels

If you are looking to sell a home that has solar panels, the process will be more difficult. There may be potential issues with the roof structure as a result of the solar panels, which can affect the selling price of the house.

If the solar panels are leased, this can be offputting for mortgage companies, which will make selling your home more difficult.

Many people wonder if you can take your solar panels with you when you move. While this is possible, most people won't. Not only is it costly, but it's not always worthwhile.

You will need to make this decision before selling your home. If your solar panels are leased, you may not be able to move them.