Do solar panels increase your home's value?

Independent

3 days ago

One of the first things people ask their solar panel installers when beginning the purchasing process is do solar panels increase home value? And if you ask your favourite search engine the same question, you are likely to get an answer that sounds very comforting, with some websites touting gains of as much as 14 per cent of your property's value. However, this can vary by region.
The truth is a bit more complex, of course.
The short answer to this question is almost certainly yes. That's because it's very unlikely that adding something that would give your home's new owner some free electricity for a few decades would make that home less attractive.
But the question you are really asking is: by how much? And this is a much harder question to answer.
How much do solar panels cost in the first place?
The cost of solar panels depends on the size of the array. The table below will give you some indication, with array costs taken from a survey of installers conducted by The Independent and energy prices from the Energy Saving Trust.
Household size
System size in kw
Array cost
Electricity cost per year before solar
Savings (energy used and sold from panels)
Price after solar (negative means a surplus)
Pays for itself after
3-bed
3.6kw
£4,990
2,900 kWh @24.5 pence = £710
£540
£170
9 years
4-bed
5.4kw
£5,470
2,900 kWh @24.5 pence = £710
£780
-£70
7 years
5-bed+
9.9kw
£7,390
2,900 kWh @24.5 pence = £710
£1,370
-£660
5 years
When can I see a return on my investment?
The table above tells you that with a bigger array you can get a return on your investment in as little as five years, but more like nine for smaller installations.
To do the maths we are using an address in London, assuming a family of three and typical use — no heat pumps, high daytime usage or electric car charging.
Other assumptions include no shade on the panels and that someone is in, using power for about half the day and an export price of 15 pence per kilowatt hour (p/kWh). Other than a new inverter, no other maintenance costs are assumed, and no financing costs are assumed. The roof is roughly south-east facing.
Much will depend on what price you get for your exported electricity. Tariffs vary widely. If you keep on top of things, however, you should be able to secure the 15p/kWh rate used in our assumptions.
Much will depend on what price you get for your exported electricity. Smart Export Guarantee (SEG) tariffs vary widely between suppliers, from around 2p/kWh to over 15p/kWh. If you keep on top of things, you should be able to get a competitive rate.
How energy prices affect the ROI of solar panels
Energy prices have a huge impact on the return on investment you get from solar panels. In 2021, a solar array might have taken 12 to 15 years to pay for itself. But by 2023, thanks to soaring electricity prices, that payback window fell to as little as five to nine years.
Even with prices now stabilising, they remain well above pre-2020 levels. If you're able to use a large proportion of your electricity during the day — for example, by running appliances or charging a battery — you can dramatically increase your savings.
The Energy Saving Trust has a handy calculator you can use to ascertain your savings from having solar panels and the ROI on your investment.
Do solar panels increase home value in the UK?
A good way of tackling this question is thinking about home improvements in general. Ones that are critical, like fixing a leaky roof, are likely to generate good returns since the home will be very unattractive without the work being done.
Similarly, a loft conversion or extension which makes the useable size of the home bigger will increase a home's value in a fairly reliable way.
But optional improvements like solar panels are harder to quantify. This is for a number of reasons.
Firstly, the idea of owning a home with solar panels is still a fairly new one. It won't be like weighing up the value of an extra bathroom or a new kitchen for most buyers. Without research, most people won't know the value of a solar setup.
Secondly, as you can see from our guide here, owning solar panels and managing them well does take a little effort. You need to set them up correctly to get paid for the electricity you don't use, and you may need to switch tariffs each year. It's hardly a second job, but it does take some time. Not everyone will see that as a plus.
And although most homeowners spend very little time looking at their own roofs – or even roofs in general – they can divide opinion on aesthetics.
Thirdly, and perhaps most importantly, making a firm estimate on any improvement is difficult, and those trying to do so are often trying to sell those improvements and don't come from a place of neutrality.
You can't sell the same property twice at the same time, once with panels and once without to show how much value they add. Other, bigger factors such as the state of the housing market or rising or falling interest rates will make a far bigger impact on house prices than a £7,000 solar installation.
In short, these estimates have very little to back them. Most people will see cheaper electricity bills as a plus, but they may struggle to put a price on that, especially when buying a home is partly about taste and emotion, rather than pure numbers.
Those expecting that an investment of one sum will boost the price of their house by more than that sum will probably be disappointed. That's because buyers who want a solar array can just get their own.
Fitting them does not cause the mess or inconvenience of a new kitchen or bathroom, and they don't improve the look or feel of the home either. So you aren't doing the next owner such a massive favour. For more on this, read our guide on Are solar panels worth it?
How location within the UK affects solar performance and property value
It's important to remember that solar panels are not equally effective across the UK, and this can affect your ROI on the investment. Factors like roof angle and sun exposure vary by region and, crucially, so does house price growth.
Southern England sees significantly higher solar yields than northern Scotland, thanks to better sun exposure.
Meanwhile, homes in higher-value regions may see more uplift in absolute terms, but percentage-wise, returns are still modest.
Local planning regulations or conservation area restrictions may also limit what kind of installation is allowed.
What else affects the value that solar panels add to a home?
While there's no guaranteed uplift in property value when getting solar panels, the following factors can make a difference:
Age and condition of the solar system: newer panels are more efficient and more attractive to buyers.
Presence of a battery system: homes with battery storage can reduce reliance on the grid even further, improving appeal.
SEG or legacy FIT tariff details: if the home still benefits from the now-closed (and more generous) Feed-in Tariff scheme, that may increase its value.
Aesthetic impact: panels integrated flush with the roofline are often more desirable than bolt-on systems.
Documentation and maintenance: a well-documented system with clear records helps reassure buyers.
Should I add solar panels solely to improve my home's value?
In other words, spending £5,000 or £7,000 on a solar installation may well add a similar amount in value — but whether solar panels increase home value depends on many factors, from energy prices to buyer demand in your area.
Even if there was a good estimate for the improvement in the value of your house that solar panels could make, you ought to think twice before using it for the same reason that movements in the UK's average house price might not apply to you. That is because your house's price might not behave like the average house's price.
You could easily spend £7,000 and see your house price drop, not because of your investment but because demand in your area has fallen or the cost of borrowing has risen.
Here's the most useful advice: don't buy solar panels for your home if all you want to do is improve its sale price. Do buy them if you want to cut your energy bills.