A place in the sun – homes and solar energy
7th September, 2013
If you are selling or buying a house with solar panels you need to take a number of things into account.
The installation of solar panels has become increasingly popular over recent years and has been an attractive incentive for many with the potential of long-term free electricity and even income from selling surplus electricity to the nation’s power companies.
Solar panels can either be owned outright or the solar panel providers take a lease of the roof of the property and the airspace above.
Home owners who have paid outright for the panels and their installation have the benefit of the electricity generated and then sell the surplus to the national electricity suppliers under a system of Feed In Tariffs (FITs) in order to reduce their domestic energy bills.
The alternative lease arrangement avoids the initial expense of paying for the solar panels and having them installed.
The solar panel providers install the solar panels for free and provide free electricity to the homeowner.
The solar panel providers retain the income from the FITs payment themselves and the home owner receives long-term electricity at no cost.
The length of the lease is usually for a period of 25 years and, as it is for the roof, may not be considered to be very intrusive to the homeowner.
However, it is still a legal commitment such as leasing part of your house or part of your garden to someone else.
The future maintenance of the roof itself also needs to be considered as does who is responsible for removing the solar panels while the works are carried out.
If the solar panels are owned by the homeowner then the cost would solely fall on the homeowner.
If you are selling a property you would need to consider the situation if a potential buyer did not want to take on the solar panels as there would no doubt be costs associated with terminating the lease early prior to the end of the 25-year period.
You would then need to consider who would pay the cost of this – would it be you as the seller or the buyer?
Furthermore, the solar panel provider may not be willing to terminate the lease earlier.
As far as mortgage lenders are concerned, most will require evidence that the installation has met the acceptable installation standard under the Microgeneration Certification Scheme (MCS) and that the lease covers all of the important matters such as future maintenance, insurance and that the mortgage lender has the ability to be able to terminate the lease in the event that the homeowner falls into arrears on their mortgage and they require to repossess the property.
If you are buying or selling a property with solar panels there are many things to consider and your solicitor will be able to advise you on the steps you will need to take.
* For more details on the issues raised by this article, please contact Claire Simmons.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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