Do solar panels increase the value of my home?

One of the most common questions asked by homeowners is whether installing solar panels The value of their property will increase. This is an understandable thought. After all, potential buyers are attracted to homes that promise low energy bills and green credentials. But, as with most things in the housing market, the answer depends on many factors.

While some reports suggest increases of up to 14 percent, actual benefits vary by location, system quality and energy efficiency. However, it is clear that it is unlikely that solar panels will make a home less attractive – especially if you have invested in it. best solar panels And maintained them well.

In this guide, we’ll explore how solar installations can affect resale prices, what types of buyers value them most, and how cost of solar panelsEnergy bill savings, and available solar panel grant All factors into the equation. If you are still deciding Are solar panels worth it For your home, understanding their long-term impact on value is a good place to start.

Do solar panels increase house value UK?

A good way to approach this question is to think about home improvement in general. Those that are important, like fixing a leaky roof, are likely to yield good returns as the house will be very unattractive without the work done.

Likewise, a loft conversion or extension that makes the usable size of the house larger will increase the value of the house quite reliably.

But alternative improvements like solar panels are harder to measure. This is for many reasons.

First of all, the idea of ​​buying a home with solar panels is still quite new. For most buyers it won’t be worth weighing the value of an extra bathroom or new kitchen. Without research, most people will not know the value of a solar setup.

Secondly, as you can see from our guide here, it takes a little effort to have solar panels and manage them well. You need to set them up correctly to get paid for electricity you don’t use, and you may need to change tariffs every year. It’s barely a second task, but it does take some time. Not everyone will see this as a plus.

And although most homeowners spend little time looking at their roofs – or roofs in general – they can divide opinions on aesthetics.

Third, and perhaps most importantly, it is difficult to make a solid guess on any reforms, and those trying to do so are often trying to sell those reforms and not coming from a place of neutrality.

You cannot sell the same property twice at the same time, once with the panels and once without showing how much value they add. Other, larger factors such as the state of the housing market or rising or falling interest rates will have a far bigger impact on house prices than a £7,000 solar installation.

In short, these estimates have little to support them. Most people will view cheaper electricity bills as a benefit, but they may have difficulty putting a price on it, especially when buying a home is partly about taste and emotion rather than pure numbers.

Those who are hoping that investing a certain amount will increase the value of their home by more than that amount will probably be disappointed. This is because buyers who want solar power can get their own solar array.

Fitting them doesn’t add mess or inconvenience to a new kitchen or bathroom, and they don’t improve the look or feel of the home either. So you’re not doing the next owner that big of a favor.

How location within the UK affects solar performance and property value

It’s important to remember that solar panels are not equally effective across the UK, and this can affect the ROI on your investment. Factors such as roof angle and sun exposure vary by region and, importantly, also increase the price of a home.

Due to better sunlight, southern England sees significantly higher solar yields than northern Scotland.

Meanwhile, homes in higher-priced areas may see greater appreciation in absolute terms, but percentage-wise, the returns are still modest.

Local planning rules or conservation area restrictions may also limit what type of installation is permitted.

What else affects the value that solar panels add to a home?

Although there is no guaranteed increase in property value when acquiring solar panels, the following factors can make a difference:

Should I install solar panels just to improve the value of my home?

In other words, spending £5,000 or £7,000 on a solar installation may add the same amount to the value – but whether solar panels increase the value of a home depends on a number of factors, from energy prices to buyer demand in your area.

Even if you have a good estimate of the improvement in the value of your home from solar panels, you should think twice before using it as fluctuations in the average UK house price may not apply to you. This is because your home’s price may not behave like the average home price.

You could easily spend £7,000 and see the price of your house fall, not because of your investment but because demand in your area has fallen or the cost of borrowing has increased.

Here’s the most useful advice: don’t buy solar panels for your home if you just want to improve its selling price. Must buy these if you want to cut down your energy bill.

Is it hard to sell a house with solar panels?

In most cases, solar panels make selling a home easier, not harder, provided the system is owned outright and still under warranty. Buyers are increasingly interested in properties with low operating costs, and the promise of free or cheap electricity for years to come is a strong selling point.

However, the sale may be more complex if the panels are leased or installed under a rental scheme, where a third party owns the system. In those cases, buyers may be required to take over the agreement, which could slow the sale or deter mortgage lenders. To avoid this, homeowners considering a future sale often opt to purchase the panels outright or settle a lease before putting their property on the market.

Good documentation – including installation certificates, warranty details and energy production data – can also help reassure buyers that the system is well maintained and adds real value.

First of all how much do solar panels cost?

The cost of solar panels depends on the size of the array. The table below will give you some hints, including array costs taken from a survey of installers Independent and energy prices from the Energy Saving Trust.

When can I see returns on my investment?

The table above tells you that with larger chains you can get a return on your investment in at least five years, but more than nine years for smaller installations.

To do the maths we’re using an address in London, assuming a family of three and normal usage – no heat pumps, high daytime use or electric car charging.

Other assumptions include no shade on the panels and someone using the electricity about half the day and an export price of 15 pence per kilowatt hour (P/kWh). Apart from the new inverter, no other maintenance costs are assumed, and no financing costs are also charged. The terrace faces approximately south-east.

A lot will depend on what price you get for your exported electricity. Tariffs vary widely. However, if you keep an eye on things, you should be able to secure the 15p/kWh rate used in our assumptions.

A lot will depend on what price you get for your exported electricity. Smart Export Guarantee (SEG) Tariff There is a wide variation between suppliers, from around 2p/kWh to 15p/kWh. If you stay on top of things, you should be able to get a competitive rate.

How energy prices affect the ROI of solar panels

Energy prices have a huge impact on the return on investment from solar panels. In 2021, a solar array could take 12 to 15 years to pay for itself. But by 2023, due to rising electricity prices, the payback window has dropped to five to nine years.

Despite prices now stabilising, they remain well above pre-2020 levels. If you are able to use a larger portion of your electricity during the day – for example, by running appliances or charging the battery – you can dramatically increase your savings.

The Energy Saving Trust has a handy calculator You can use this to figure out your savings from solar panels and the ROI on your investment.