Table of Contents
Solar energy has more to do than just providing clean and renewable energy for households. It also has an effect on the property value and the housing market in general.
Solar systems are a hot topic in the modern world – and for good reason. The technology is touted to be the next big thing in the energy sector due to its numerous benefits and pro-environmental status. Since solar systems use nothing but solar energy to generate power, it is by far the best way to make your own electricity in a relatively cleaner way.
If you are on the fence about investing in a solar system and need just a bit more convincing about its benefits, then this guide is just for you. In this guide, we will discuss the role of solar energy in the housing market, how it helps, and how it can benefit the value of property. Read below to learn more.
Global warming has been a looming issue for decades and while you may have heard the term sporadically over the decades, it has never become this prominent than today.
The modern world is warming up and we are all to blame for it. While technological progress has benefited humanity in unimaginable ways, it has also come at a cost.
The world currently relies heavily on fossil fuels for power. We mine the earth for materials, process them in huge industries, and then use them in power plants where they are burned or reacted with other materials to generate electricity – and it has been like this since the Industrial Revolution.
However, the byproducts of current power generation methods have been piling up and polluting our environment. Greenhouse gas emissions are the perfect example since they are the most ubiquitous and commonly emitted pollutant in the world.
Greenhouse gasses contribute to the “greenhouse effect”. The effect describes the release of certain elements, mainly carbon dioxide (CO2) into the atmosphere. On its own and in low quantities, CO2 is quite common and not dangerous. After all, we exhale CO2 with every breath of oxygen we take!
However, when in enough quantity, CO2 rises into the atmosphere where it collects and creates an invisible blanket. This blanket plays a vital role in increasing global temperatures because it traps heat.
Normally, heat is transferred from the ground up to the atmosphere where it escapes into space. However, by creating this blanket, we have essentially turned Earth into an insulated oven.
The CO2 absorbs infrared radiation and keeps it there. This slowly causes the temperature of the earth to rise causing a range of environmental concerns. You may have noticed that storms are getting stronger, rains are either few or intense, and ocean levels are rising. These phenomena are all linked to rising temperatures caused by greenhouse gas emissions.
This is why world governments are investing heavily in solar energy because it offers a cleaner and safer alternative to current power generation methods.
The solar industry has its own emissions since the materials still must be sourced and processed, but the technology’s adoption by the masses is still going to be a net positive for the environment. A typical home solar PV system in the UK could reduce carbon emissions by around 1 tonne every year. Furthermore, people around the world are also becoming increasingly aware of the damage that we are doing to the environment, which is why we are seeing a huge influx of solar power around the globe.
Apart from this technology being environmentally friendly, solar energy also provides numerous other benefits, the biggest being its effect on property value which provides yet another incentive for property owners to invest in the system.
Before we dive into how solar energy impacts property value, let’s go over a few solar system basics. There are three types of solar systems:
On-grid systems are the cheapest because they directly provide electricity to your home without the use of batteries which would otherwise be stored for later use. This system is a popular and relatively inexpensive choice because it also enables property owners to sell excess energy back to the grid.
Off-grid systems work in the same way but also include separate battery packs for storage. These battery packs store unused electricity and provide even more savings and convenience. The drawback of these systems is that they tend to be expensive and slow down the overall Rate of Investment on your property.
Hybrid systems are a combination of the two. These systems provide a long-term solution and day/night backup. Hybrid systems use smart inverters that save power to a battery pack and convert DC solar energy to AC before sending it to the primary electrical installation in a property.
Now that you know the basic types of solar systems for properties, let’s look at how this technology improves property value:
Solar systems reduce your dependence on the grid, and thereby reduce your electricity costs. Prospective property buyers find pre-installed solar systems as a huge value-add since the property will essentially be independent and provide better power efficiency than other houses in the market.
Since solar systems generally generate more electricity than can be used daily, you can also sell excess stored energy back to the grid through a process called net metering and make additional money that is credited to your electricity bill.
In the UK, electricity peak hours are around 11 a.m. to 4 p.m. During this time, the electricity consumed typically costs more. However, by installing a solar system, you can significantly offset the higher tariff by using the electricity generated by the system rather than from the grid.
Peak hours are usually set during daylight to incentivise the use of solar technology. Please contact a professional electrical company like Calder Electrical to know how you can enable and manage net metering on your property.
Solar systems are passive systems and can be installed in underutilised spaces of a property, like rooftops.
They don’t require a lot of real estate either and hardly ever cover the entire roof. In fact, by going for a tall structure for the panels, you can add shade to your roof and still use the roof as you normally would.
Solar systems don’t have any moving parts and are completely electrical. This is why they don’t require extensive maintenance like generators. The most that you would need is periodic maintenance and cleanup of the panels that can also be cleaned automatically if it rains.
The panels typically come with a 20-to-25-year guarantee, and you would only need to replace the battery and inverter once a decade. Keep in mind that these systems will be paying for their replacements themselves and more by saving electricity and selling it back to the grid. These benefits and low recurring costs make these systems highly valuable for properties.
Solar systems are incredibly environmentally friendly and produce clean, renewable energy. Modern property buyers have become more aware of the dangers of environmental changes which is why their preferences have changed towards properties that are pro-environment.
These properties are often listed as “eco-friendly” or “Pro-Green”, thereby increasing their marketability.
Properties in the UK can take advantage of monetary incentives and tax benefits provided by the government to make their solar installations more feasible. Here are some ways to get the most out of a solar system on a property:
The Smart Export Guarantee (SEG) allows a property with net-metering enabled to sell back excess electricity to the grid, thereby earning credits on the electricity bill.
As you can imagine, these credits have a lot of value and an unused property that is constantly generating electricity, and accumulating credits will automatically increase the overall value of the property.
As of April 2023, the UK government has reduced the Value Added Tax rate on solar installations to zero. This is an incentive for all property owners who want to invest in a solar system. Now you can easily purchase solar panels and get your system up and running without paying hefty taxes. This makes investing in a solar system not only more feasible but also a smart decision for property owners.
Unfortunately, as of 2024, the original Green Deal is unavailable, but we are mentioning this scheme because some financing options in the deal are still available.
Private companies have realised the potential of solar energy and its demands which is why they are providing easy loans that allow property owners to switch to solar more easily. Depending on the company, you can also find deals where you can pay back the loan in the savings you make on your electricity bill.
Communities have also become aware of the long-term benefits of solar energy for the environment which is why several local councils are offering additional grants to property owners to make solar installations more feasible.
However, these grants can vary greatly depending on where you live so we recommend that you check in with your local council to see if any options can make your installation more affordable.
Property owners are always on the lookout for new ways to make their property stand up and be more marketable in an ever-competitive market. Solar energy is an excellent strategy to not only increase the value of your property but also monetise it when not in use.
The savings on a property is dependent on the size of the system. On average a 3-5KW system is ideal for properties that incur about 250-300 units of electricity. This is just enough electricity to power small properties throughout the various seasons. The electricity generated by these systems in this scenario can result in annual savings of up to £1,460+.
Of course, cheaper electricity is just one benefit. The other benefit comes from net metering, or the ability to sell excess electricity back to the grid.
By applying for net metering, your local power company can install a special meter that records the total units sold by your solar system back to the grid. Depending on the local tariff, if you account for reduced bills over 25 years plus the benefits of net metering, you could see annual savings of more than £42,530+!
If you have read through our guide, you already know the answer to this question.
However, if you are still unconvinced due to the high costs of installation, then consider the fact that a typical solar system will virtually pay back its original installation amount within half of its lifespan. That’s right, by this rate, you will get back your initial investment, save on electricity, increase your property value, earn credits through net metering, and more – all before you even change a single component on the system.
These benefits make solar systems not only worthwhile but also a smart decision for property owners who want to increase the marketability of their property and obtain benefits from the initial investment.
Keep in mind that the modern consumer has become more aware of the environment. World news constantly provides updates regarding this issue and almost every large multinational has created sustainability initiatives to reduce carbon emissions.
All these factors have created an environment that requires people to be more considerate towards the environment. A study published by The New York Times highlighted how solar energy has become a popular factor in the purchase decision of properties.
With new families being more pro-environment, the demand for “green” houses has reached unprecedented heights. This benefit also carries over to old properties that are retrofitted with solar systems to boost their marketability. If you are a property owner, we recommend that you talk to a professional installation company like Calder Electrical who can help in conducting an energy audit and highlighting how you can benefit the most from a custom-made system for your property.
Calder Electrical Services provides a wide range of solutions to help you play your part in making the world a more sustainable place.
If you wish to have solar panels installed on your residential or commercial property, our experts can conduct a site visit to determine your requirements and propose the best type of solar system for your needs.
We also offer solar battery storage installation so that you can minimise any wastage of the energy you create. This will help lower your energy bills and make you more independent from the grid.
We have been providing electrical services to residential, commercial, and industrial properties for over 40 years and are specialists in all aspects of electrical installations, maintenance, and testing.
All our work is fully insured and meets the current regulations and standards set by the NICEIC. Also, all the notifiable work is signed off by the local authorities.
Contact us here or call us at 0800 612 3001 to get in touch with our professional electricians for more information on the different types of solar panels and battery storage options.
Photo by Watt A Lot on Unsplash
