Solar Panel Leases - FTB

FTB_BTF

Hi, apologies if this is the wrong place to post, this is my first time posting.

My partner and I are FTB and have found the perfect property for us, we felt really positive about moving forward with it. We noticed that the house had solar panels and thought this was just an added bonus when we were looking. Didn't think much else about them until our survey report mentioned confirming if they were leased or owned outright - as young FTB we didn't even know leased panels were a thing

We have now had it confirmed they are leased. Unsure how long remains etc right now, trying to find this information.

After looking around online this has worried me as there are many stories about them causing a pain for home owners.

Just wanted some personal opinions on the situation, has anyone had any good experiences with these? Are they more hassle than worth on a house we otherwise love? Is there anything we should really take into consideration regarding them?

Thanks in advance!

Keep_pedalling

They could certainly cause an issue with obtaining a mortgage.

FTB_BTF

We have had a mortgage approved and the lenders did conduct a valuation but I assume they could still choose to refuse the mortgage if they wish?

eddddy

Just to clarify - the solar panels probably aren't leased. It's likely to be the roof (or airspace above the roof) that's leased.

In simple terms, this has probably happened...

• The home owner has leased their roof to a company for maybe 20 years. (i.e. The company is the tenant of the home owner)

• The company has installed their own solar panels on the roof that they have leased

(Conceptually, it would be a bit like if a house owner leased one of their bedrooms to a company for 20 years, and the company installed their equipment in the bedroom.)

Mortgage lenders are nervous of lending on houses, where part of the house is leased out.  But some mortgage lenders will agree, if the terms of the lease are acceptable to them.


For example, mortgage lenders will want a break clause in the lease, saying that if the house is repossessed by the lender, the lease is automatically terminated.

If the lease already contains that clause (and other relevant stuff), that's great.

If the lease doesn't, the seller will have to ask the company if they'll agree to a 'lease variation' to add the clause(s).

The company might say "yes", or they might say "no", or they might not reply, and/or they might faff-about for weeks or months.

FTB_BTF

Sorry yeah that was what i meant!

I have seen that lenders are wary of such situations so that is one hurdle we've considered we'll have to face.

Also looking if anyone has any advice on issues that arise should we get the mortgage and go through with purchasing the house. Understand this may not be the right forum to ask this?

user1977

You should wait to see what your solicitor tells you about the lease. Not much point speculating before then.

Scotbot

If the panels are leased and need to be removed for roof repairs then the leasing company  has to remove them or give permission for them to be moved. This can be an issue. Find out who owns the panels then check them out.

Myci85

We are in the same position, in process of buying a house with lease solar panels. I realised the potential issues before we offered, and read up as much as possible about the pitfalls before offering. I then requested a copy of the lease before we offered so I could check it had the required clauses to be able to obtain a mortgage, and that they will remove panels if I need them to for roof repairs. I know the current owners bought the house with them in place, with a mortgage, so I hoped it wouldn't be an issue. 

We have just had our mortgage offer through, but even though we provided the lease on application, it does detail in the conditions that the lenders legal team will need to check the lease and confirm they are happy with it. So my solicitor is sending it over and just keeping everything crossed there aren't any issues... from what I can see it has the clause in that the lender needs which basically says that if the lender needs to repossess for any reason, the solar panel company will remove the panels free of charge and terminate the lease. 

RHemmings

Just a minor opinion on this. I want to have solar panels on my roof eventually, and a house with owned solar panels would have been a big plus for me. But, a home with leased (roof space) solar panels would, for me, be even worse than a house with no solar panels at all. Because then I can't put my own panels up for the length of the lease and I'm otherwise restricted by the terms of the leased agreement. 

ThisIsWeird

FTB_BTF said:

My partner and I are FTB and have found the perfect property for us, we felt really positive about moving forward with it. We noticed that the house had solar panels and thought this was just an added bonus when we were looking. Didn't think much else about them until our survey report mentioned confirming if they were leased or owned outright - as young FTB we didn't even know leased panels were a thing
We have now had it confirmed they are leased. Unsure how long remains etc right now, trying to find this information.

Hi FTBBTF.

How old is the property? Is it likely to require a new roof, or significant repairs, for a decade or so? If not, then - personally - I wouldn't worry too much.

The chances are that there will be no issues arising over the remaining duration of the 'lease', which I expect to be the duration of the FIT which is usually around 25 years (you should receive confirmation of the lease duration, or can ask before proceeding).

You just need to compare the pros with the cons.

Pros: the generated leccy should be fully available to you. Are you at home during the day? Or, could you set the W/M to run whilst you are at work? Or, does the house have a hot water cylinder? If so, you will - for most of the year - have free hot water. If you cannot use the leccy as it's generated, then you should be able to add batteries to allow you to use the leccy when you want. (The leasing system works on the installer receiving the FIT, but the homeowner gets all the generation they can use).

Cons: if you need to fix the roof, you'll need to arrange with the installer to sort temp removing the panels. That shouldn't be an issue. If you fancy a loft conversion, then that could be problematic - no idea of how this is resolved, but perhaps you need to buy the remaining time of the panels? No idea.

On balance, provided the roof is in good order, I'd consider it a wee bonus. I suspect that once the FIT duration is up - prob 25 years in total, so good chance it's around half-way through - the panels are yours.

powerful_Rogue

Could always see how much it would cost to end the lease early and put that to the buyer.