29/05/2012 - The Hidden Cost of Energy

Warnings have been given by the Royal institution of Chartered Surveyors (RICS) to potential buyers about homes with photovoltaic solar panels installed on the property.

These panels are installed by a company for free who then get to sell any extra energy generated by the panels which the homeowner does not use back to the grid. The usual arrangement is that the company rents the roof of a home for a period of 25 years and then installs the panels for free. The homeowner gets free energy and then the company is able to sell any unused electricity to the grid thereby generating a profit. However, this can cause problems for the homeowner if they want to sell their house in the future.

Some mortgage lenders are now refusing to lend monies on homes which have these panels and agreements in place. This means that even if you find someone who wants to buy your home, they may find it difficult to find the money to allow them to buy the house. Under the agreement with the solar panel company you may find that it is extremely difficult if not impossible to terminate the agreement and remove the panels thereby allowing you to sell the property.

Even if it is possible, it is likely that any right to terminate the contract would incur a financial penalty and you may find that you are retrospectively charged for installation of the panels. This could be very expensive but ultimately necessary if you are desperate to sell your property. They may not allow you to pay the installation costs but instead seek costs in removing the panels and the company’s loss of income generated through the sale of the surplus energy. The costs of this could be substantial and may of itself prevent the sale because it makes no financial sense.

In the worst case scenario the company could refuse to end the agreement there may not be any contractual right to terminate the contract and the sale will simply fall through.

If you are still keen to install solar panels, you will still need to ask your current mortgage provider to ensure that they are happy for the panels to be installed. If you do not, it could be a breach of your mortgage and the repercussions could be costly. Even if you get consent and are happy with the risk of a sale falling through as a result of the solar panels, you need to consider the effect it would have if you ever came to remortgage the property; the panels could limit your choices.

It is essential that if you want to install solar panels, you seek legal advice in respect of the agreement to ensure that it complies with guidelines given by the Council of Mortgage Lenders (CML).

Here at Hibberts we have solicitors who are able to provide specialist advice and make sure you know all about the hidden costs of “free energy”.
Call us now for more information on 01270 215117 or email us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Hibberts LLP
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