Green energy is becoming increasingly important, and those who attempt to play their own a small part in reducing the risk of global warming by reducing their own energy consumption should be commended. However, going ‘green’ can in some cases be to the detriment of homeowners and when it comes to the long term investment of solar panels, it is crucial that specialist legal advice is sought prior to agreeing to system installation.
Whilst solar panels can simply be purchased outright, the installation of solar panels can be, and increasingly often is, subject to complicated arrangements with the installers , which often involves, in effect, securing a lease on a property but expecting free electricity in return. Whichever arrangement you choose for the installation of your solar panel, the market value of your property could be affected. Whilst some may be attracted to a home with a solar panel, many others will consider the drawbacks off-putting. Problematically, many mortgage lenders are averse to granting mortgages in respect of a property where solar panels have been leased, and even those lenders who will mortgage such properties may only do so if a release clause exists in the lease which the lender can use. Should a mortgage be secured, the owner will then need to set up a feed-in tariff arrangement in order to transfer the right to the energy from the seller of the panel.
Feed in tariffs are now far less generous and likely to reduce further meaning that solar panels are becoming an increasingly poor investment. Indeed, some homeowners may find that they never get a return on their investment. Some properties will not even be eligible for solar panels, including conservation areas and listed buildings, so homeowners must be wary of such restrictions. The situation has not been helped by the economic climate – governments worldwide have often looked to reduce what is, in effect a subsidy on green energy, in an attempt to balance the national budget. This lack of long-term certainty, makes potential property purchasers, and mortgagees, wary of properties with solar panels, which have in effect been leased under a long-term arrangement.
Despite their green credentials, solar panels should not automatically be viewed as an inexpensive answer to soaring energy prices. In reality, there can be great long-term expense associated with solar panels. As a result, those tempted to install solar panels should avoid rushing in to a decision and think about the long-term financial consequences. As it stands, too many homeowners are unaware of the need to seek legal advice from an expert conveyancing solicitor before agreeing to the installation of a solar panel on their property. When signing a formal legal agreement, which in the case of solar panels could bind you for twenty years or more, a solicitor is required to ensure that the terms serve your best interests.
As an aside, issues regarding solar panels are adding to the work required to be done by conveyancing solicitors when it comes to buying or selling a house. It is widely thought that whilst most solicitors have very grasped this issue, there is a significant minority who have not – and therefore this could prove to be an additional cause of professional negligence claims against conveyancing solicitors in the future.
Tim Bishop senior partner of Bonallack and Bishop – Amesbury and Salisbury Solicitors with a specialist team of conveyancing lawyers. For expert help in buying property, call 01722 422300 or click here to visit their website.
Tim Bishop
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