Having solar panels on any property can be a good thing and especially from a landlord’s point of view as the main reason for them is you can entice tenants with the fact that you have solar panels, therefore their monthly outgoings will be less than renting elsewhere. As a private landlord you might want to consider using grant funding as a means of installing solar panels on your property. A solar panel grant can be obtained for either the full install cost or a proportion of the costs, but certain qualifying factors do apply. Find out more about these stipulations by speaking to Warma UK who can help you obtain a solar panel grant under the governments ECO4 scheme.
People seem to want to be more ‘green’ and do things that will benefit the environment and that includes renewable energy. From a tenant’s point of view, this can be a good reason to rent one property over another because if bills are not included in your monthly rent payment, you will be saving yourself money monthly on your energy bill payments as you will be paying less than you would if you were renting another property, without having to pay for the solar panels yourself. If all bills are included in your rent, your monthly rental as a whole should reflect this. As energy companies seem to be putting their prices up regularly, your savings will be even more in the long run, the longer you rent the property.
Installing solar panels can be quite costly. So the first thing you will need to take into consideration is overall costs. If you are a first time landlord and are looking to get a buy to let mortgage (or even if you already have other properties but will need a mortgage to buy another to rent it out), then as getting a buy to let mortgage is not so easy these days and can in some cases require a deposit of 50% plus (although some will take the minimum of 25% of the property’s value as deposit), you will need to take this into account when looking at purchasing the solar panels. Before investigating whether solar panels are a suitable investment, it would be a good idea to use the buy to let calculator here to work out what your repayments would be. You must take both costs into consideration when looking at all your outgoings when going to buy the property. Will you have enough money for a deposit and installation of solar panels? Will the rental return cover the cost of both of these? Factor that in to how much your monthly mortgage repayments will be.
For those that have already had solar panels installed, they may have also taken advantage of the government scheme FiT (Feed in Tariff), which is a government scheme where you got money back for any energy you did not consume and that was clean and went back to the National Grid. This looks like it may be fizzled out however in April 2019 although you will of course still benefit from cheaper energy bills in the long term. So if you were thinking about adding the panels for that reason, you may want to think again, as you will not get money back any more from next year for unused energy.
Obviously by installing solar panels on a buy to let property, you will not really be gaining much benefit from them personally as the monthly bill savings will be beneficial to your tenant more than yourself. You will also have the initial cost of installing them which is not cheap. As the government scheme will also be running out soon, you will not gain the benefit of getting money back for unused energy and they say could then take up to 70 years to get the benefit of getting your money back and really seeing the savings! Therefore, at present, it would seem the only real benefit for the landlord is that your property will look more appealing to those tenants who will want to save on bills themselves and could mean the difference between renting the property next door or yours as it will be cheaper for them on energy bills. It may be worth it to do as an investment for the future as you go to sell on one day as they could add value to your property, but even that, you would need to ask your local estate agent as some say they add value, but a lot of people do not like the look of them and that they ruin the look of a house. All in all, it would be worth thinking about what you think would be best for you now and in the long term and if you can comfortably afford to add the solar panels financially, taking into account all the other factors relating to buy to let mortgages etc.