Buying a house with solar panels already fitted

The first question, and how to answer it

Ask the seller directly, and then verify it. The answer will be one of:

Owned outright. Bought and paid for, no third-party interest. Straightforward.

Owned but financed. Bought on credit that may or may not be secured. Check whether anything is registered against the property.

Leased to a third party — a “rent-a-roof” arrangement. A company installed the panels free, takes the generation income, and holds a lease of the roof space, typically for 20 to 25 years. This is the one that needs work, and it has its own page: rented roof leases.

Verify it on the title. A roof lease should appear on the registered title. If the seller says the panels are owned but a lease is registered, that is a discrepancy to resolve before anything else.

The paperwork that should exist

Ask for all of it. Absence is not fatal, but it is information — and it is a negotiating point while you still have one.

The building regulations certificate is the one that most often surfaces at conveyancing. Electrical work in a dwelling that installs a new circuit is notifiable, and a solar installation normally does exactly that — see building regulations. Most installers self-certify through a competent person scheme, which produces a certificate. No certificate means either it was never notified, or nobody kept it.

What your lender will care about

UK Finance’s guidance for conveyancers states that lenders’ requirements on solar panels are set out at clause 5.20 of the Mortgage Lenders’ Handbook for England and Wales, and clause 5.14 for Northern Ireland.

From the lender-by-lender guidance published alongside it, three themes are consistent where a roof lease exists:

• conveyancers must report the lease to the lender
• the lease must meet UK Finance minimum requirements, and several lenders require a deed of variation before completion where it does not
• many lenders require an unconditional right to break the lease if they take possession

That last requirement is the crux. A lender repossessing a house does not want to inherit a 20-year lease over the roof that it cannot terminate. If the lease does not give it a break right, the lender may decline — and that is a problem you inherit when you come to sell.

Practical consequence: if there is a roof lease, tell your conveyancer and your broker early. It is not a detail for the week before exchange.

FIT and SEG

Two different schemes, two different answers, and both are commonly misunderstood.

Feed-in Tariff. Closed to new applicants, but existing installations still receive payments, sometimes substantial ones. FIT is registered to a generator, not to a property. Ofgem’s guidance says that a new owner of an MCS-FIT installation should contact the FIT licensee the installation is registered with, who will then update the generator’s details on the Central FIT Register.

So it does not travel automatically. If the property has a FIT arrangement:

• establish the tariff rate and the remaining term — a legacy FIT rate can be worth far more than current export payments
• confirm who receives the payments now, and that it is the seller rather than a roof-lease company
• deal with the transfer as part of the transaction, with meter readings recorded at completion

Smart Export Guarantee. A contract between the previous owner and their supplier. It does not transfer. You arrange your own SEG tariff after completion, and you will probably be asked for the MCS certificate — which is one more reason to obtain it.

The roof underneath

An array conceals the covering it sits on. That is worth taking seriously on an older property.

Tell your surveyor the panels are there and ask specifically what they could and could not inspect. A standard homebuyer report will not remove panels, and the report should say so.

Ask when the roof was last covered. If the covering is near the end of its life, the next re-roof means removing and refitting the array, with scaffolding, and that cost belongs in your budget rather than in a surprise five years from now.

Ask about leaks. Penetrations through a roof covering are the usual failure point, and a history of leaks around the array is a specific question worth asking.

Ask whether the roof was assessed before installation — and see structural surveys for what that assessment should have covered.

Questions to put to the seller

Give these to your conveyancer to raise as enquiries. They are the ones that change the answer:

1. Are the panels owned outright? If not, on what terms are they held?
2. Is there a lease or licence of any part of the roof or airspace? Please provide it.
3. Please provide the MCS certificate.
4. Please provide the building regulations compliance certificate for the electrical work, or explain how the work was notified.
5. Please provide the DNO notification or connection approval.
6. Is the installation registered for FIT? At what rate, with which licensee, and how many years remain?
7. Is there a SEG tariff, and with which supplier?
8. Please provide all warranties and the installer’s details.
9. Has the roof leaked or been repaired since installation?
10. Was a structural assessment carried out? Please provide it.
11. Has an export limitation been applied by the DNO?
12. Are there any restrictive covenants affecting external alterations? See covenants.

When to walk away, and when to negotiate

Negotiate: missing certificates, an unclear FIT position, a roof nearing the end of its life, an ageing inverter. All of these have a price and can be reflected in one.

Get proper advice before proceeding: a roof lease that does not meet lender requirements and where the lease company will not vary it. This is the situation that can leave you unable to remortgage or sell, and it is worth understanding fully before you commit.

Remember the panels are the smaller half. The generation is worth a few hundred pounds a year. The title, the lender position and the roof are worth considerably more, and they are what the enquiries above are actually about.