Solar panels are good for your home. Let’s make that very clear and get it out of the way first. They can help you save up to 70% on your energy bills, and you can scale the system you install to your home to fit perfectly and add to it at a later date if your energy use increases. You can also add a battery to your solar panels so they work together to let you use solar power at night, and you can even sell your excess solar energy back to the grid to offset your bills even further.
They’re great! They’re practical, customisable, and incredible for the environment.
But what would they do to the value of your home? As much as we’d all love to become as green as possible, let’s be practical. There are other concerns that affect people’s decision making when it comes to going green, and home improvements in general, and price is most definitely one of the biggest. But value added – or worse, lost – is certainly a factor too. Very few people would ever install something in their home that will reduce its value long term, especially when the point of many home improvements is to add long term value to your property. So, how will solar panels affect the value of your home?
The first thing to say about how solar panels will affect the value of your home is that there is no accounting for individual taste. Some people simply don’t like them, and don’t want anything to do with them. If someone like that tries to buy your home, then they’ll likely value it less than it’s actually worth, simply because they don’t like solar panels and unfortunately there’s no accounting for that. However, the reality is much better for homeowners.
The second thing to say is that there is a lot of conflicting information out there. Some reports from estate agents have hedged their bets and said that solar panels might put off some home buyers from purchasing a home with solar panels on them. Other reports like the one conducted by Admiral Money found that solar panels could add as much as 25% to the value of your home. So, we’re going to do our best to cut through the noise and make sure you get the clearest picture possible.
Monetary Value Added
Now, with all that being said, will investing in solar panels add value to your home? The short answer is they should do, yes. But determining just how much? That’s a little trickier.
There are two real ways to determine how much impact installing solar panels onto your home will have. The first is to try and quantify how much money it will add to the amount your home is worth.
There are a lot of different statistics for this potential number out there. The research conducted by Admiral Money suggested that you could be looking at as much as a 25% increase in your home’s value by adding solar panels. A study published by Solar Energy UK suggested that UK homes add £2,000 on average by investing in solar panels, and other reports have suggested that you’ll see a 0.9%-2% increase in your property value, whilst yet more estimates have suggested that a 4%-14% increase on average is more accurate.
This is all great news for homeowners, but unfortunately goes to show that it’s incredibly difficult to put a number on just how much installing solar panels could actually increase your home’s value. But it’s safe to say that an increase is incredibly likely.
Energy Performance Investment
The second way to determine how much installing solar panels on your home will increase its value is slightly more abstract. Rather than trying to put a value on numerical value on how much you could expect to see, instead we look at how much solar panels can increase your home’s EPC rating, and what that can do to your home’s value as a whole.
The Energy Performance Certificate (or EPC) rating for your home is a universal score given to all homes in the UK. It is measured on a standardised scale by registered inspectors and gives homeowners and homebuyers alike a very clear indication of how energy efficient your home is. The EPC rating for your home is scored on a scale from A-G, with A being the highest and G being the lowest. It is a whole home measurement that takes into account how energy efficient your windows are, the level of insulation your home has, how your home generates heat, and even the kind of light bulbs you have installed, to name just a few.
Given the growing importance of environmental concerns, and green legislation that is slowly being introduced across the country, many landlords and homeowners are already starting to avoid homes with low EPC ratings. Homes with low EPC ratings will inevitably cost more to heat properly, and can be more likely to be at risk of issues like mould and damp affecting them. Less and less people are willing to move into a home with high energy costs, and don’t want the cost and hassle of having to improve their EPC rating themselves.
A 2022 study from Santander showed that homebuyers across the UK were placing an average of a 9.4% premium on homes with high energy efficiency ratings, and estate agents were reporting homebuyers paying 15.5% more in the same study.
With the rising importance of energy efficiency in the eyes of homeowners, the impact that installing solar panels will have on a home’s EPC rating can’t be understated. Many homeowners have reported seeing their homes move from a band D (which is the UK average) to a band B with the addition of a solar panel system, which is an increase of two full levels (although this is dependent on individual homes).
Again, whilst it is hard to quantify just how much value this would add to the price of your home, in a market where there is a premium being placed on homes with high energy efficiency, adding 2 levels to your EPC will only have a positive impact on your ability to sell your home.
Ultimately when people are looking into buying a new house, they don’t want to have to go through the hassle and disruption of having to make it energy efficient once they are in, and they’re paying for the convenience of energy efficient measures already being done.
There is another way that solar panels will add value to your home. Future proofing. There is a gas boiler ban for all new build homes coming into effect in 2025 which could potentially be extended to include all homes in 2035. With this ban on the horizon, it’s looking likely that either electric boilers, or Air Source Heat Pumps will be the heating method of the future. Considering both of these types of heating run on electricity, they pair perfectly with solar.
There is also a slow but steady rise in the use of electric vehicles throughout the country, whether that’s fully electric or hybrid electric. In 2022, 1 in 10 new registered vehicles were electric, and EV sales rose by 40% compared to the year before. Electric vehicles are now the second most used type of vehicle in the UK, overtaking diesel vehicles, and sitting only behind petrol. Just like an Air Source Heat Pump and an electric boiler, an electric vehicle pairs perfectly with solar.
Solar power works by powering everything in your home that needs electricity, then once all those things have been powered it either stores the excess energy in a battery or it sells it back to the national grid. Crucially though, any power solar panels generate is completely free. So, anything being powered by your solar panels is being powered using free electricity.
If you are heating your home with an electric heating source, or charging an electric vehicle using solar power, then you would be using free electricity to do so since you’ve generated the electricity yourself from the sun.
If you install solar panels on your home today, then you would be putting the system in place to power your heating system and charge your car for free in the coming months and years. A home already having the power to do that, rather than needing to be retrofitted to do so will undoubtedly be more attractive to buyers in the future.
So, Is Solar Worth It?
Whilst it is difficult to put a number on how much adding solar to your home can increase its value, it is clear to see that the most likely outcome is that it will increase your home’s value. If you take the average UK house price of £288,000 in June 2023, and only assume the 4% value increase that solar panels can have then you would be looking at a potential increase of £11,520 to the price of your home.
Add to that the considerations of how a high EPC rating and energy efficient home is already appealing to homebuyers, not to mention the potential that futureproofing your home holds, the value of adding solar now will only continue to pay even more dividends as the future gets greener.