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Why 95% of Traders Fail

UK Home Solar Panel Installations Good or Bad for House Buying and Selling?

Housing-Market / Solar Energy Apr 01, 2014 - 05:02 AM GMT

By: Nadeem_Walayat

Housing-Market

The solar installation industry has been busy for many years convincing home owners with well rehearsed sales pitches and graphs of how much they could earn each year by profiting from FREE energy from the sun to generate their own electricity by installing large arrays of solar panels onto their south-ish facing roofs, that like a contagion soon tend to spread to neighbouring roofs despite the fact that the southern most tip of the Island of Britain lies a good 500 miles north of the start of the optimum zone for generating solar energy.


Whilst prior to 2012 the Feed in Tariff of 43.3p per kwh generated was highly lucrative for home owners who did not intend on moving for at least 15 years, however as of writing the feed in tariff of 14.9p makes UK solar home installations a very bad decision for a number of reasons that I will touch upon below.

New Housing Market Ebook - FREE DOWNLOAD

Part 1: U.S. Housing Market Analysis, Forecast 2013-2016
Part 2: U.K. Housing Market Analysis, Forecast 2014-2018
Part 3: Housing Market Guides
    Home Improvements to Avoid
        2. Solar Panel Installations
Part 4: Historic Analysis 2007 to 2012

This article is excerpted from the new housing market Ebook "UK House Prices Mega-trend Forecast 2014-2018 - How to Capitalise on the Great UK Housing Bull Market with Home Buying, Selling and Improvement Guides" available for FREE download from Mid April 2014.

Reasons Why You Should Not Install Solar Panels onto Your Roof:

  • New Technology - Remember Betamax video recorders? All of today's solar panel installations will soon become obsolete over the next 5 years with the advent of nano-tech SOLAR PAINTS, and flexible transparent SOLAR SHEETS covering windows which will be able to generate far more electricity at far cheaper installation cost whilst seamlessly blending in with the environment so that most people would be unaware that any solar technology has been installed.
  • SUN - Most of the UK just does not get enough sun during the year to truly justify the outlay for installing solar panels due to the UK's long 6 month winter months of October to March. So you are only really going to get a good number of sunny days for 6 months of the year. Solar panels are best suited to countries that hug the equator. Therefore in my opinion the only areas of the UK where Solar Power should considered are along the South Coast of England, and perhaps no more deep than 50 miles inland, and even that is no where near the amount of solar energy that the likes of the Meditarian countries receive. So understand this that the amount of solar energy your UK solar installation generates per year will be lucky to be 1/4 that of the same installation in countries such as Spain.
  • FREE SOLAR - Home owners should NEVER EVER sign up to FREE solar panel installs that effectively lease their homes roofs to a third party for as long as 25 years. Luckily the cut in the FiT has reduced the FREE Solar installs that were all the rage several years ago, which will prove a nightmare for those home sellers.
  • Quality of Solar Panels and Inverter - Most home owners will be no experts at discerning whether what is being installed will be of much use, especially for the cheaper quotes as without top of the range panels AND an inverter to convert the DC electricity generated into AC current then not only will you be greatly disappointed at the amount of electricity generated but the whole system will likely have a far shorter life-span than expected and that the inverter's may fail several times over the expected 25 year period requiring expensive replacements.
  • Worthless Guarantees - Whilst the sales pitch may have been for 25 years of electricity generation, however the guarantees tend to be for just 10 years. Furthermore it is highly likely that your local installer will have long since gone out of businesses before the 10 years are up thus making the guarantees worthless and you liable for any repair costs.
  • Increased Risk of Roof Damage - If the solar installation has not already damaged your roof and left it open to water damage, then your roof will permanently have to handle the extra weight of the panels along with strong wind-shear forces during storms that could rip parts of your roof off and panels along with it.
  • MAINTENANCE - Most solar calculators factor in 25 year installs, however all roofs need maintenance, and it maybe that those panels will need to be ripped off in 10 years time or so to repair or replace the roof.
  • INSURANCE - Most insurance companies charge a higher premium for solar roof installations.
  • Unrealistic Home Sale Valuations - Unless your a nutcase you won't intend on taking the solar panels with you when you sell your home which means you may have an unrealistic expectation of their value to prospective home buyers.

And the most important reason why you should not install solar panels is that you could put off many prospective home buyers from even setting foot through your door due to the lack of curb appeal as well as the extra costs that will be factored in such as roof maintenance and ultimately removable of ageing panels. So effectively you will put off as much as 50% of the market from buying your house! Especially if you have been fantasising that the solar installation should result in an substantial increase in the value of your home.

The bottom line is that the solar PV industry has a destiny with extinction, so don't make the mistake of getting sucked into the PV solar panel sales pitches that will likely cause you problems when coming to sell your home, instead WAIT for solar paint.

Winter is Coming

Where saving the environment argument by using renewable energy is concerned, it does not appear to be so clever for the nation to plough billions into generating the most electricity when demand is at its lowest (summer months), then along comes winter!

So yes, whilst the early solar installations will profit those home owners for a decade or so, however this is as a consequence of another example of the Labour catastrophe that befell Britain, where the government chose to pay home owners FIVE times more for the solar energy generated than the home owners paid for electricity bought from the grid, the cost of which contributes to Britains annual £120 billion black hole (budget deficit). Or to put it another way, why wait for the sun to shine ? Just buy power from the grid and then use it to shine super bright lights onto the solar panels 24/7/365! Where the subsidy will out weigh the lighting costs. That is Labour government logic!

Buying a House with Solar Panels Installed

One of the primary considerations when contemplating buying a house with solar panels installed other than the loss of curb appeal is who actually owns the solar panels? As many of the earlier installations were for free in exchange for the leasing the roof out to the solar company to receive the FiT payments for typically 25 years. If so then you should avoid such properties as there will be a whole host of problems to deal with.

Worse still if the panels are owned by the home owner then they may even be planning on taking them with them which will result in damage to the roof.

The next question to ask is what is the Feed in Tariff, as the government has repeatedly cut the FiT over the years from the original 43.3p per kwh to just 14.9p kwh as of writing which would make a huge difference to how much income the solar installation could yield. The FiT stays with the property so 'should' be signed over to the buyer, although you need to ensure that this is explicitly included in the sale and not end up being a bargaining chip.

On a positive note those who did install solar panels when the Feed in Tariff was high (43.9p kwh) can profit from the subsidy for the energy generated that could amount to over £1k per annum that could eventually pay for the installation costs and any routine maintenance costs.

Ensure you are subscribed to my always free newsletter to be in receipt of the new ebook on release containing many more home value increasing guides and ongoing housing market analysis in your email in box.

Source and Comments: http://www.marketoracle.co.uk/Article45043.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, stocks, housing market and interest rates. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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