Will solar panels increase the value of your property?
Solar panels can affect the value of a property, in both a positive and negative way. If the panels are new technology, show significant savings and are aesthetically acceptable, they may very well boost value. However, in some instances, the agreement which ties respective owners into old technology is onerous and could well affect the value of a property in a negative way.
The Feed-in Tariffs (FITs) scheme closed to new applications on 31 March 2019. Under FITs, householders receive payments for the electricity generated by eligible installed systems like solar PV, wind or hydro turbines, or micro CHP. It is anticipated that a new market will make energy firms compete to offer solar homes the best price for any unused energy they export.
Why install solar panels?
Solar power is good for the environment and a ‘free’ source of energy and can help secure the grid system. The cost of the system versus the savings to annual bills produces the breakeven date. If you installed solar panels before the deadline and qualify for current government tariffs, you are likely to recoup the cost of installation in around 20 years (depending on your energy usage).
If you install solar panels after March 31, the only financial benefit will be savings on your energy bill for the power you generate and use yourself. Some estimates suggest it could take more than 70 years to recoup the initial outlay, which is far longer than the panels can be expected to last.
Who receives payments?
- Householders that installed an eligible system and have already successfully applied for FITs payments are unaffected by the scheme closure.
- Householders that have installed an eligible system with an MCS certificate dated on or before 31 March 2019 have until 31 March 2020 to apply to the scheme.
- Householders that have not installed an eligible system on or before 31 March 2019 will not be eligible for FITs payments.
Will payments be made in the future?
The marketplace would replace a scheme that pays households about 5p for each unit of solar electricity they export. Once responses have been considered, parliamentary time will need to be secured to pass the legislation ahead of the new market’s launch.
Energy suppliers with more than 250,000 customers will be mandated to offer a “smart export guarantee” tariff, with solar households expected to shop around for the best rate. However, the time it takes to implement the guarantee will leave new solar homes giving away unused energy for free for many months.
Rates could vary depending on the time of day and demand across the energy system. It is not yet clear what level companies will offer, but the current regime is equivalent to payments of nearly £80 a year for a typical solar installation.
Households will be protected from the prospect of having to pay energy suppliers when prices go negative. Such a scenario can happen when energy demand is low in the summer and output from windfarms and solar panels is high, which officials expect will happen for several hours a year from 2020.