When you install photovoltaic (PV) panels in the UK, does the property value of your home go up or down?

Good question.  And the answer really depends on how you finance your solar PV installation.

With a traditional solar lease or power purchase agreement (PPA), the resale value of your home may actually decrease.  This is because leases are contracts that last for 10 to 20 years.  And if you choose to sell your house, the next homeowner will have to assume the remaining portion of that contract.

  • Some UK homeowners will be thrilled to take over your lease.  They understand that having panels on the roof means lower monthly electricity bills.
  • Other prospective buyers might balk at the idea.  They don’t really “get” solar and aren’t keen about assuming this extra liability.
  • There’s also a 3rd category of homeowners.  Those who are prepared to take over your lease but don’t have the credit score to do so.

So if solar leasing hurts the resale value of your home, why would you ever explore this financing option?

Well, if you plan on living in your house for the next 10 to 20 years, leasing is a very attractive option.  After all, you receive a brand-new solar installation for free.  And you benefit from decades of lower electricity bills.

But when done correctly, adding solar panels can dramatically improve your home’s property value.

What does “done correctly” mean?

When Can Solar Improve the Resale Value of a UK Home?

Although leasing may have a negative impact on property values, true solar ownership can actually increase the resale price.

Here’s why.

Before trying to sell your home, you must apply for an Energy Performance Certificate (EPC) rating.  This is the color-coded score that tells prospective buyers how energy efficient your property is.  Green (A) means your property is extremely efficient.  Red (G) means that your home is very inefficient.

There are a number of ways to improve your EPC score, with many homeowners adding better insulation or switching out older appliances.  But adding a 4kW PV installation can increase your score by a full 15 points

If you combine this with other energy efficiency strategies, the UK Department of Energy and Climate Change (DECC) reports that it’s possible to increase your home’s resale price by an average of £16,000.  This is because prospective buyers will factor in lower energy bills into their bids.

Note that £16,000 is more than the upfront cost of installing solar panels out-of-pocket.  So automatically, your investment pays for itself several times over:

  • You save money on utility bills
  • You make money with the feed-in tariff
  • You make even more money when it comes time to sell

This is a higher return-on-investment than almost any other home improvement you could ever make.  If you’re thinking about adding an extra bathroom or renovating your kitchen, think again.  Installing solar panels delivers the best ROI.

And the UK isn’t alone in this regard. 

Similar numbers from the US reflect the property benefits of going solar.  According to the National Renewable Energy Laboratory (NREL), every $1 in annual savings that Americans enjoy from installing solar panels translates to an extra $20 in resale value.  And according to the US Department of Energy, solar-enabled properties sell twice as quickly as their non-solar counterparts do.

And here’s the really good news. 

As utility rates keep trending upwards, the attractiveness of solar-ready homes will only increase.  Your house might receive a £16,000 boost today.  But in 10 years, the true value could be many times higher.

To learn more about installing solar panels on your own home, request a free quote today.