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The installation of solar panels has become increasingly popular in recent years as the cost of renewable energy technology has fallen and the cost of living has increased. We know that solar panels are seen as a way to save money on energy bills and do your bit for the environment.
But what effect do solar panels have on house prices? It’s a question that is often asked by people considering installing them.
The answer is not a simple one as there are a number of factors to consider. Solar panels can affect house prices in a number of ways, and these effects are mainly positive. We are going to take a closer look at how solar panels can affect house prices and valuations.
Increased value
There have been multiple studies that show that installing solar panels on your property can actually positively impact the valuation of your house. These studies have to take into account the location of the property, and also the solar panels themselves, as some properties benefit more than others. Typically, houses that are located in sunnier spots tend to do better with valuations, as more sun equals more energy generated.
One such study has revealed that having solar panels installed could increase the value of your house by 14%. This means that the average UK house price could be upped by over £32,000, and if you’re based in London, then that skyrockets to £90,000.
Why do solar panels increase property value?
The biggest reason for the increase is due to the solar system’s ability to reduce the property’s energy costs, with more than half of Brits saying that saving on energy bills is the most important factor when buying a property with solar panels installed. Furthermore, it is estimated that those with solar panels can save around £27,500 on energy bills over a 30-year period, which makes the investment worth it.
You can save hundreds of pounds a year just by using electricity that your solar panels have generated, and by buying a house that already has solar panels on, you mitigate the installation costs which can also be pricey.
In addition, solar installations are now often seen as an improvement to the property, in the same way that an extension would be. Most buyers are now starting to understand that solar panels are an investment and benefit to the house, instead of thinking that the panels detract from the appearance and lower value.
In fact, it tends to be the older generation now that feels strongly about the overall appearance of solar panels, with younger generations not minding how properties look with them installed. But even so, just under 87% of people said that they would buy a house with solar panels.
Another factor that helps to push up house prices is the effect on the energy rating. The UK government has set out its goal that all houses need to be EPC rated B by the year 2030, and so having solar panels which improve the energy rating of your house is an attractive feature for prospective buyers.
Things to remember
While we think installing solar panels is the way to go, there are some things that you should take in to account.
You may not be able to recoup the money spent on solar panels if you move soon after having them installed. Solar panels are a great investment, but will still take around 10 years to get your return on that investment, so it’s more cost effective for you to make the most out of what you can gain from them, before selling your property.
Your house valuation is also dependent on factors like:
- Location
- Overall system output
- Age of the panels
We also have to remember that a huge factor in house valuations is the state of the housing market, so just because your house has solar panels, doesn’t guarantee that it’s going to be sold straight away.
But most people agree that there are far more pros than cons when it comes to buying a home with solar panels already installed. The only thing that there is that some people don’t really like is the appearance, but again, there are methods in place to minimise the ‘ugliness’ of the panels, making them stand out less. Moreover, people are generally willing to compromise on looks when the system is actually beneficial to them.
Final thoughts
If you are considering installing solar panels on your property, it is important to factor in the potential impact on your property value. Solar panels can increase the value of your property, but it is important to consult with a qualified appraiser to determine the exact impact that it will have.
When buying a property with solar panels, remember that the price you are paying is inclusive of an expensive system, that is going to be incredibly beneficial to you in the long run, and what’s more, is that you don’t even have to pay any upfront costs for the privilege of having them!