Solar Panels: What happens when I move house?

Author: Chris Alexander

You may have heard me this morning on the Jonathan Vernon-Smith show on BBC Three Counties Radio discussing the implications of long-term solar energy contracts when it comes to selling your property.

There are a number of companies in the marketplace currently offering free installation of solar panels in exchange for contracts of up to twenty-five years which entitle the householder to benefit from the electricity generated and allows the installer to sell surplus energy back to the Grid. I was asked to comment upon the implications for householders proposing to sell where these agreements are in place.

The first observation I would make is that each company’s terms and conditions will be different. However, remember that by signing up to them, you are entering into a long-term contract with obligations you will need to perform for the entire duration. It is therefore essential to check the termination provisions in the contract (if any), to see what should happen in the event that you no longer wish to continue. I consider it is going to be unlikely to be easy to terminate the contract because of the capital investment made by the solar panel company.

The contract provides you with personal obligations to the solar panel company and these cannot generally be assigned to a buyer of your house without the solar panel company being a party to that arrangement. Therefore, if your buyer was prepared to continue with the contract, a novation agreement would be needed to transfer the obligations to the buyer and to release you from the contract. If you failed to procure the agreement of your buyer to step into your shoes and went on to breach your obligations to the solar panel provider, then I could envisage a hefty damages claim being brought by the solar panel company based on their losses for the remaining term of the contract.

However, in practice I would expect that this is unlikely to be an insurmountable problem, but will add to the complexity and cost of a sale transaction. Further, it may limit the type of buyer who would like to purchase your property.

Other Legal Issues to Consider

Before entering into one of these contracts you should consider whether or not planning or other permission is required for the development to your roof or wall. The government’s planning portal website provides some useful guidance on this. Also check that the terms of the contract are not granting any specific rights over your property to the solar panel company. These could require registration of the Land Registry and, also, could require the consent of your mortgagee to put in place.

Follow Chris on Twitter: @Alexander_CJ http://twitter.com/#!/Alexander_CJ

Contact Us

For further information about our Litigation and Dispute Resolution services or to discuss a particular matter or situation in more detail, contact Chris Alexander at our St Albans office by email at chris.alexander@salaw.com or on 01727 798042.

© SA LAW 2011

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.