Sales are hotting up… but do solar panels add to the value of a house?

Record numbers of households are installing solar panels in an effort to curb skyrocketing electricity bills. In the first three months of this year alone, more than 50,000 people have installed them on their roofs – more than 100 percent more than last year.

Solar panels are usually a good investment if you plan to live in your home for at least ten to fifteen years after installation.

This is because it generally takes so long to recoup the initial installation cost after years of lower electric bills. Assembly typically costs around £5,500, or double that with a battery that lets you store excess energy for later use.

However, you may not get the money back if you sell early. Some potential buyers may view them as a valuable asset and be willing to pay more for a home with solar panels. Others will not see the value and may even pay less for a home with solar panels if they feel they are ugly.

We ask the experts when solar panels can add to the value of your home – and when they can detract from it.

Save old utility bills

To make solar panels more attractive to potential buyers, try to hold onto old utility bills, suggests Jeremy Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) and a North London estate agent.

“We find that solar panels don’t really make much of a difference to buyers, whether they encourage or delay a purchase, unless their benefits can be clearly demonstrated,” he says.

For example, if you can show a buyer energy bills before and after you installed solar panels, showing that the panels have reduced your bills by several hundred dollars, that could increase the saleability of your home.

He adds that if energy bills remain high in the coming months or years, solar panels could become more attractive to potential buyers. “At the moment they don’t really matter much and the response from buyers is pretty neutral,” he says.

However, Christopher Burton, head of sales at Knight Frank estate agency in Dulwich, South East London, is more positive about their appeal.

He says: ‘I would suggest that the initial cost of solar panels prohibits owners from adding them now just to sell the house, but if they are already installed it is certainly considered a plus for the majority of buyers in our patch.”

Know your market

Solar panels can increase the value of a typical home by as much as two percent, estimates installer GB Solar. However, the increase will vary depending on the type of property.

Gareth Beard, director of GB Solar, says: ‘While there is some evidence to suggest that solar panels increase the value of a home, this varies widely by area and the relative value of the home.’

Some types of buyers are more comfortable buying a home with solar panels than others.

Nigel Bishop is the founder of purchasing agency Recoco Property Search, which specializes in historic and monumental real estate. “Such properties are subject to restrictions in terms of possible sustainable upgrades,” he says.

‘However, when our buyers come across solar panels, it does not result in negative feedback; especially as homeowners become increasingly aware of the benefits of eco-properties.” Jeremy Leaf adds that aesthetics are a bigger concern in some areas than others. “Solar panels in urban or suburban areas tend to deter buyers because they can look very ugly,” he says.

Solar panels can be particularly attractive to buyers in parts of the country where energy bills are among the highest. Andrew Kerr, founder of boiler installer BOXT, says: ‘Southern Scotland was one of the areas hardest hit by rising electricity bills, rising by 53.72 per cent in just one year. Unsurprisingly, East Renfrewshire is the UK area with the largest increase in renewable energy installations between 2020 and 2021.” If you are considering installing solar panels, ask your local real estate agent how potential buyers will view it when you sell in the next few years.

Growing interest

Solar panels with a battery storage system can be very attractive to buyers who want to keep their bills low.

Electric vehicle owners can similarly look for homes with solar panels and an installed charging point. However, since these technologies are still relatively new, there are only a handful of buyers who are guided by them. Matt Thompson, head of sales at Chestertons Brokers, believes that over time these renewable technologies will appeal to a wider range of buyers.

‘We are encountering more and more buyers who are looking for a home with good ecological properties or sustainable properties,’ he says.

“Other buyers may not agree with the aesthetics of solar panels, but the industry continues to develop new concepts such as solar roof tiles, a relatively new green energy technology and perhaps more visually appealing to some.”