There are various things to consider if you’re thinking about investing in solar panels, including the value they can add to your property. We tasked journalist Louisa Bayley to research, do solar panels really increase the price of a house?
Hundreds of thousands of UK households are turning to solar energy as a way of saving money on their electricity bills, generating some extra income and protecting the planet. For some, this eco-friendly investment is also delivering some serious returns on the value of their property.
Last year in 2023, more solar panels were installed on the roofs of Britain’s homes than at any time since 2015 according to latest government figures. This means that 1.5 million homes – around 5% of the UK’s 28.4 million households – are now harnessing the sun’s power for their energy needs.
As a homeowner, you will of course consider the benefits now of solar energy to you and the people you live with before taking the plunge and investing in panels. But what about the future? With an eye to a potential house sale further down the line, have you thought about the sale value this tech adds to your home?
First, let’s take a look at the two biggest house price boosters from solar – the financial and the environmental.
How solar panels add value to your property
1. The financial case for solar panels
Solar panels save households money on energy bills and, over time, pay for their initial installation costs. Broadly speaking, they do this in two ways.
Saving money on energy bills
Solar panels save you cash month by month once they are installed. Most of the cost savings come from households using the electricity generated by their panels instead of buying it from their energy supplier.
The total amount they save will depend on the system’s size and how much of that power they use themselves. Estimates can range from £300 to around £800, with some regional variations. Households further South will save slightly more money as they typically get more sunny days.
Note from Glenfield Electrical: Some of our customers with larger systems (6 kW+) with are saving over £1000 annually as higher energy bills provide the opportunity for greater savings.
Householders who are at home during the day are also likely to make bigger savings on their energy bills because they’ll be using more of their own electricity. That’s particularly good news for retired people, stay-at-home parents and those who work from home.
There’s no doubt about it, a prospective buyer will see the benefits of a home that saves them money. It’s another positive feature for you or your estate agent to factor in when setting the sale price of your property. Now, what about a home that makes you money?
Selling surplus energy to the grid: SEG Payments
Households can receive up to £320 a year by selling any electricity they don’t use to the grid. To do this, they need to sign up to the Smart Export Guarantee (SEG) scheme. All licenced energy companies with 150,000 or more customers must provide at least one SEG tariff.
The Energy Saving Trust estimates a typical household somewhere in the Midlands could be paid between £220 and £320 a year based on a rate of 15p per kWh (although beware the better tariffs are provided to existing customers. A house that makes you money? Now that’s added value.
2. The environmental value of solar panels
Solar panels generate clean, renewable energy, helping people to be greener and to do their bit towards tackling climate change.
Green legislation and the government’s firm commitment to decarbonisation is leading people to make more environmentally responsible purchasing choices. As a result, estate agents predict homes with solar panel systems will be worth more in years to come as buyers increasingly look for more sustainable living.
How much value to my property do solar panels add?
The financial and environmental benefits of solar panels help to explain why investing in them could add tens of thousands of pounds to a home’s value, if not now then in the near future.
Some flats and houses with greater green credentials, including solar panels, are already commanding higher prices in some areas, according to estate agents, with buyers willing to pay up to 20% more for them. This premium puts an extra £50,000 onto the value of an average East Midlands’ home, currently priced at around £263,000.
The findings from different pieces of research on solar panels and house prices have varied.
Research by Admiral Money, for example, recently found solar panels can boost a property’s value by as much as 25%. Admiral compared the sale price of homes with different energy-saving features across 13 UK cities with like-for-like properties in the same area that didn’t have them. The study found solar panels wre the best green investment for sellers, beating insulation into second place.
Sustainable energy company Effective Home used Government data from 2020 to predict that solar panels on your roof will raise your property’s price by 14%.
Other research has been more conservative in its estimates, but still points to panels adding a boost to your house price. A 2021 report by Solar Energy UK, for example, found that solar panels can increase a home’s value by 0.9% to 2.0%. With the average house price standing at £281,913 as of January 2024, that means the typical homeowner could increase their home’s value by anywhere from £2,540 to £5,640. It means a bigger boost, of course, for more expensive properties. If, for instance, you own a £500,000 property, solar panels will increase its value by between £4,500 and £10,000.
So, we are seeing research point to house price boost from solar panels, but the size of the increase varies widely, depending on which study or survey report you read. And whether you recoup your money or make a profit on the sale of your house depends, of course, on several factors, such as:
- your initial outlay on panels and installation
- current value of the house
- location of the house
- size of the property
- age and condition of the panels
Our advice is that most of the evidence in the UK is underlining the added value to a home of solar panels, which is another plus point for this renewable energy. However, the increase in your house price should not be the main reason for your investment. Think of it as a bonus on top of the money saved each month on your energy bills.
How much does it cost to install and maintain solar panels?
If you’re considering the return on solar panels from a future house sale, you must weigh this up, of course, against the costs involved in installation and maintenance.
Installation costs
Solar panels and a battery cost around £10,000 to install as a ballpark figure. That’s quite a sizable outlay for most households so they’ll want to know how and when the upfront expenditure can be offset.
According to government research, the cost of solar panel installation has fallen by 60% since 2010 and batteries are cheaper and more readily available than ever.
Solar panels won’t pay for themselves overnight but, with export payments, most households in England can expect to see a payback period of between 11 and 13 years, claims the Energy Savings Trust. Although in our experience at Glenfield Electrical, a sub 10 year payback period is very achievable with the right equipment and installation.
These timescales are based on a home’s typical electricity usage during the day and the price of electricity as of October 2024.
Maintenance and running costs
Solar panel systems require little maintenance. Rain washes panels clean of dust, dirt and debris as long as they are tilted at an angle of 15 degrees or more. People living in dusty areas, such as close to an operational quarry, might need their panels professionally cleaned occasionally.
The main thing householders must ensure is that any leafy trees or overhanging bushes are cut back regularly. Shade from foliage can block sunlight and stop panels from working properly.
Installers will go through any maintenance checks with the customer after installation, providing any trouble shooting tips.
Solar diverter
Investing in a solar diverter can help to maximise a solar panel system’s output. It can divert any surplus energy generated by the panels to another appliance such as an immersion heater, rather than sending it to the grid.
Solar diverters cost around £800 and need to be replaced after 12 years, but they can help cut energy bills further.
Help with installation costs
Low income households may be able to get assistance with the cost of installing solar panels. There are several schemes available, including the Energy Company Obligation (ECO), a government-backed initiative to help people make energy saving improvements to their home.
Further details on eligibility and how to apply can be found at https://www.gov.uk/energy-company-obligation.
In conclusion
Because solar panels save you money while helping you to do your bit to save the planet, they are a wise investment for both today and tomorrow. A range of factors must be considered when doing the maths on how much of your investment you will get back when you sell your house, but solar panels and batteries are a genuine selling point for homebuyers looking to save money and go green.
To find out more about solar panels and whether they’re right for you, why not call our friendly team for a chat. We’re more than happy to talk things through and help you decide. Call us on 0116 478 3679 or email us at solar@glenfieldelectrical.com
