15th September 2014
If you buy Solar Panels outright, you do benefit from free electricity and can sell the surplus to electricity suppliers under a Feed in Tariff however the initial outlay can be quite costly.
What usually happens however is the solar panel provider takes a lease of your roof (usually for a 25 year period), installs the panels free of charge, you receive free electricity but the profit from the surplus goes to the solar panel company.
This is a more economical method of installation and of course the incentive is free electricity.
Sounds like a win win situation – but a lease of your roof does have legal implications.
What you may not realise is that where you have a mortgage, you must seek consent from your mortgage provider for the solar panel company to register a lease of your roof space and the air space above the roof.
Thought should be given to maintenance of the installation and indeed, whether on initial installation, any strengthening works are necessary to be compliant with Building Regulations.
You are required to obtain Building Regulation approval unless the work is carried out by an installer registered with a ‘Competent Person’ self-certification scheme. The adequacy of the existing roof to take the increased loads will need to be assessed, and some strengthening may be required.
Planning Permission also needs to be considered in certain circumstances but in the majority of cases installing solar panels on is likely to be considered ‘permitted development’ with no need to apply to the Council for Planning Permission. There are, however, important limits and conditions which must be met to benefit from the permitted development rights and it is advisable to discuss your installation with the local planning authority prior to signing any contract or lease.
Consideration should also be given to damage which may be caused both on installation and subsequent removal of the solar panels as the installation does involve the internal roof support structure and so tile damage and water penetration can sometimes be an issue.
When you come to sell your property, consideration should be given to whether the existence of solar panels is going to reduce the market available to you.
Some mortgage providers are still unwilling to lend against properties where solar panels have been installed under lease schemes. This in itself does therefore impact on the market available to you when you wish to sell. The majority however will lend, but there is still certain criteria which needs to be met before most will agree to proceed.
Most importantly lenders need to have a right to break the lease and have the solar panels removed in circumstances where they adversely affect the sale of a property where it has been repossessed.
The Council of Mortgage Lenders provides very clear guidance on all aspects of solar panels to its members and Solicitors as to what needs to be in place before a property can be deemed as acceptable security for lending purposes and in almost all cases, documentation has to be referred to the lender before a transaction can proceed.
The same provisions apply when you decide to re-mortgage your property where solar panels are already installed.
In view of the additional consideration which must be given to the existence of solar panels, the timing of a conveyancing transaction can take several weeks longer than usual to reach completion.
If you have any queries regarding purchase or sale of a property with solar panels, then please get in touch.