Do rooftop solar panels add value to your home in the same way as a kitchen refurb or new bathroom? Logically they should, due to the significant value of the electricity the panels will produce over their lifetime of 25 years or more.
An American study in eight US states has previously shown that a ‘solar home premium’ exists in the US housing market, where homes with solar PV have been shown to sell for an average of $4,000 per installed kilowatt more than equivalent homes without solar. Should such a premium exist here in the UK, that would amount to almost £10,000 for a typical UK domestic PV installation. The US research indicates that as a solar market develops having solar PV becomes a significant attribute when selling a property.
In November of last year Barclays Mortgages published the results of an online poll carried out with YouGov showing that UK homeowners would pay on average almost £2,000 more for a property with solar on its roof. That’s considerably less than might be expected based on US experience, however it’s worth noting that solar panels ranked highest in terms of added value when UK respondents were presented with a list of smart technology for the home.
Paul Hutchens, Chair of the Solar Trade Association New Build Solar Working Group says, “There is already evidence from the UK and beyond that homebuyers are willing to pay a premium for a home with solar on it.”
“A home with solar has lower energy bills and is therefore cheaper to run. A solar system can also generate a small income for the homeowner thanks to the Feed-in Tariff and payments for any electricity exported. This value should logically be translated into house prices – both for new build and existing homes.”
“With over 750,000 UK homes having gone solar over the last five years alone, more and more of these are going to start changing hands. US research has shown that solar adds significant value to homes there; we now want to show that the same applies in the UK and hope that relevant data can be made available to provide hard evidence of this.”
Following from the opinion polls that have already been done, the Solar Trade Association has recently published a new study setting out exactly what research needs to be done in order to establish whether solar homes currently attract a sales premium on the UK housing market, thereby aiming to back up the Barclays poll with hard evidence. The study has reviewed the literature on links between energy performance of homes and their sales value, assessed the UK data sources that can be used to establish such a link for solar and interviewed key stakeholders to understand views on the perceived value of solar within the home building and purchasing market.
The initial interviews with house builders, surveyors and mortgage lenders confirmed that there is generally a poor understanding of the costs and benefits of adding solar to a property and no formal process for assessing the value, hence it is rarely taken into account by these stakeholders.
According to the STA, establishing the added value requires a detailed statistical correlation of house purchase data with information on whether the property has a solar installation. Data for the former are freely available from the Land Registry. The approximate location of almost all solar homes can be obtained from several sources, however data protection issues have so far prevented detailed locational information from allowing the required correlation. The STA intends to pursue the matter further with relevant parties, as it claims this will be the only way to undertake the required analysis.