Do solar panels increase property value?

Installing solar panels will lower your energy bills whilst increasing the value of your property – a win-win. Having a solar installation can increase commercial property values and be more appealing to future buyers or tenants due to the environmental and financial impacts, such as reduced carbon footprint and lower operational costs.

How solar panels can impact property value?

One of the primary advantages of solar panels on commercial properties is the significant cost savings they provide. This in turn reduces the dependence on the grid, leading to lower energy bills and a quicker return on investment. Alongside the financial benefits, by investing in solar, businesses can significantly reduce their environmental impact, whilst also enhancing the value of their property and assets, which will be of higher appeal to future tenants and buyers who support sustainability.

Factors that influence how much solar panels can increase property value

• Energy savings – The more energy that the panels can generate for a business, the lower the cost of utility bills. If a business is a higher consumer, knowing that there will be a considerable cut in energy bills can be a very attractive feature to business owners and tenants. With the substantial rise in energy costs, having a solar system in place can give businesses the satisfaction that they can keep their costs low, even while being a high consumer. Many of our clients’ businesses see 30-40% of their annual electricity needs being provided by their rooftop solar PV.
• Sustainability commitment – Solar panels have a great impact on the environment by helping businesses to reduce their carbon footprint and reliance on fossil fuels. This enhances the industry’s effort to align with national and global environmental goals, enabling businesses to showcase their commitment to sustainability. A typical 204kWp (480 panels) will help avoid over 39 Tonnes of CO2e emissions a year compared to sourcing from the UK grid.
• Increasing corporate social responsibility – The environmental benefits of solar panels can strengthen a business’s corporate social responsibility by improving community relations, generating positive public perception, and enhancing brand image. This is especially relevant as more consumers and businesses are prioritising eco-friendly practices.
• Extra income streams – Businesses with solar can benefit from selling their excess energy back to the grid. This can be an attractive aspect to potential buyers of a property as they can have lower operational costs and earn money back for unused energy.
• Improved EPC rating – Due to the reduction in carbon emissions and need for fossil fuels, businesses will have improved energy efficiency measures when having solar panels on their property, which in turn means they will have a better EPC rating which is going to be more appealing to buyers and tenants.
• Ownership – Whether a business owns a solar panel system or leases it via what is commonly known as a Power Purchase Agreement (PPA) can impact the value of a property. A business owning a system typically see more value appreciation as new owners do not have to inherit ongoing lease payments, which in turn may not increase the property value.

Increasing value for residential vs commercial properties

Having solar panels on both residential and commercial properties can increase the property value. Businesses and commercial properties often see greater ROI than residential properties. The potential issue with residential properties is that if there is not much use in the property during the day, most of the produced electricity will be unused and exported back to the grid. However, with commercial property, businesses are likely to be functioning during the day and using the energy as needed. Residential properties tend to see an increased market value and faster sales due to the rise in energy costs and the appeal to be sustainable and save on household bills. This is similar with commercial properties, especially high consuming industries such as manufacturing facilities, as they will find that the property will have a higher value and quicker sales time due to the remarkable decrease in operational costs and environmental impact. The key difference between the property value increase with residential and commercial properties is the percentage scale and appeal. Residential properties can typically see a lower value increase primarily due to the appeal of lower energy costs, however commercial properties are usually more substantial due to the higher scale of savings and the impact on operating costs.

The financial benefits of solar panels

• Long-term saving – Solar panels typically come with a 25-year warranty and the panels themselves can last for over 25 years, therefore providing businesses with clean, renewable energy for lower costs compared to the grid for a long time. Mypower utilises panels that have a warranty and lifespan of 30+ years, with a high performance rating of 87.4% after 25 years.
• Pay back – Businesses can pay back their solar panel system in as little as 3-5 years, just from the savings they will achieve on their energy bills.
• Future proofing energy prices – With the current rising and fluctuation of energy prices, a solar panel system can ensure that costs will stay low and maintain stability in a business’s budget.
• Energy Price Cut - With solar, businesses can buy a significant portion of energy for an average of 4-5p/kW over 25 years compared to the normal average of 20-25p.
• High ROI – As solar panels can last over 25 years, after the payback period, business’ can continue to save money on their energy bills for at least another 15-20 years. This means once they recover their initial outlay and overall see the financial gains and savings generated by solar panels.

How to maximise the value of solar installation

As there are no moving parts in a solar panel system and the panels are generally self-cleaning, maintenance is minimal. However, businesses may need to clean their panels if they are finding that there is a drop in their overall performance. This is dependent on the installation’s environment and size and scale to ensure it is cost effective. Maintaining the panels by regularly inspecting and cleaning will remove dirt and debris which will help them to always function to the highest quality (6). Regularly monitoring and responding to alerts will ensure everything is in good condition, working properly and anything that needs attention can be dealt with as soon as possible. Not tracking this can lead to faulty components or systems, which will decrease the value of the solar installation.

Mypower solar panel services

Mypower design, supply and install quality solar PV systems for the commercial, industrial and agricultural sectors. Mypower also has a dedicated post install team to quickly and efficiently resolve any potential issues after installation.

• Commercial solar PV installations
• Industrial solar PV installations
• Agricultural solar PV installations