Solar panels are appearing all over the country on a wide variety of properties, including new homes.

The main incentive is the receipt of feed-in tariffs (FITs), but house builders need to address a number of issues before proceeding with a solar panel supplier.

FITs guarantee a minimum payment for all electricity generated by the renewable energy system, as well as providing an additional payment for the unused electricity that can be exported to the grid.

Solar panels benefit from FITs for the longest period of time of all of the renewable energy sources. Solar PV tariffs currently run for 25 years, but this is expected to reduce to 20 years.

Solar panels and new homes

It is useful for house builders to consider solar panels in terms of phases - not only the initial installation, but the operation of the equipment and subsequent disposal with the plot.

In order to qualify for FITs, a certified solar panel installer must be used. This has led to agreements being made between house builders and selected solar panel providers.

In most cases, a lease of the external roof space is granted by the house builder or homeowner to the solar panel installer, usually for a term of 25 years. Under the lease, the supplier retains ownership of the panels for the duration of the lease and is required to maintain them.

Points to address

Before proceeding with a solar supplier, house builders should consider:

  • Lender's consent: If there is a charge over the property, it is likely that the lender will have to give consent to the lease of the solar panels. If the plot has already been sold this is a primary consideration for house builders - they will want to avoid delays in sales due to lenders' requirements
  • 1954 Act: The solar panel lease is likely to be a business tenancy giving a statutory right to remain when the lease runs out. Therefore the provisions of the Landlord and Tenant 1954 Act need to be excluded in accordance with the usual statutory notice procedure
  • Planning: In most cases the mounting of solar panels on a house is not likely to require planning permission provided that they are installed below the highest part of the roof and project no more than 200mm from the roof slope or wall surface. Note that if the property is within the grounds of a listed building then panels are not permitted - and if the property is in a conservation area then restrictions will apply to the location of the panels
  • Building regulations: These will normally apply. Remember, too, that the electrical works for the installation will often also need building regulations approval
  • Restrictions on title: House builders need to ensure that the installation of the panels does not breach any restrictive covenants affecting the property. This is particularly relevant when building homes under a licence - be aware that the estate title may have certain requirements as to the aesthetic look of the estate
  • Transferring on: When selling a property with solar panels, consider whether they are fixtures for contractual purposes as often the supplier retains ownership of the panels during the lease. Be aware that it may be necessary to serve notice of transfer of the plot on the solar panel supplier. At the end of the solar panel lease, also be certain about who is to retain ownership of the panels
  • 1995 Act: An important consideration which is often overlooked is that of the Landlord and Tenant (Covenants) 1995 Act and the continuing liability of the house builder/homeowner under the landlord's obligations in the solar panel lease. It is important to include a landlord's release of liability in the lease, to apply when the house builder or home owner sells the house