One of the many advantages to installing a solar system in your home is not just cheaper energy bills but the value it can add to your house price. While bearing in mind concepts such as payback period and sustainability, it's also important to understand that a solar system is not a sunk cost, it is a physical addition to your property that has intrinsic value. However, the ways in which solar adds value can be poorly understood even by real estate agents, and the estimates on how much they can increase your property's value can vary quite a bit.
How Can Solar Panels Increase Your Property's Value?
1) They increase your EPC rating, making your property more marketable.
Estate agents are increasingly talking about their version of the "green premium", that is the more energy efficient your property is the greater the value, especially given the increasing government demands on landlords to run an energy efficient property.
Since April 2020, it has been illegal to rent out a property with an energy efficiency rating of below "E", and the energy efficiency of a property is a key selling point regardless, in both the rental and sale markets. You can find out more about solar and EPC rating in our recent blog on the subject here.
2) They can be attractive to potential buyers, especially those interesting in environmental issues or energy security.
While buyer's preferences are often a matter of taste, increasingly buyers are socially conscious and will take into account the eco-credentials of a property. While solar panels might not be enticing to all, a certain type of buyer will pay more for a house with them on. On the other hand, some real estate agents point out that solar panels can be viewed as unsightly by other buyers, and actually decrease interest. Having the more aesthetically pleasing in roof solar panels can help mitigate this potential negative factor.
3) The new homeowner will reap the rewards of solar.
As well as a better EPC rating, the advantages of property that costs less to run are obvious, especially as energy prices are expected to remain high over the medium term. Having solar installed can net you over £700 in savings and income from export, and even more if you have a battery as well. Depending on the age of the system, this can translate to tens of thousands of pounds in extra value in terms of money saved. Warranties on solar systems can generally transfer between owners, so it's an easy win to boost the value of your property.
Selling a Property with Solar Panels
It's important to remember from the points above that it's up to you and your estate agent to highlight the value of any installed solar system. One technique is to demonstrate the reduction in bills and additional income that comes from solar, perhaps suggesting to potential buyers the best export tariff to maximise the financial savings, particularly where there is a battery in addition to solar. Some real estate agents do say that solar panels don't make much of a difference to a properties value, but perhaps they just aren't selling the product well enough, as there is clear value in any solar system.
Conclusion
Overall, while solar panels can increase the value of a property, the real draw is the value you get out of the panels while you are living there, as the amount that they can increase your property's value by is hard to estimate - and can vary from 2% to 25%. It's very much dependant on if the buyer sees the value in the solar and the nature of the local property market.
