Solar panels - What you need to know
Sophie Allinson gives an overview of the legal aspects to be taken into account when considering whether to invest in solar panels.
Increasingly, property owners are considering installing solar panels in order to reduce their energy bills and earn money for producing electricity. There are, however, some important legal considerations to be taken into account when deciding whether to install solar panels.
Solar panels on domestic and non-domestic properties are classed as a General Permitted Development. This means that they can be installed without the need for planning permission. However, there are certain exceptions to this rule:
- Solar panels installed on commercial properties must be connected to the business use and cannot materially affect the property’s external appearance.
- Solar panels on any property must not affect amenity of the area. For example, one council insisted on the removal of solar panels due to the glare they were producing.
- Listed buildings require listed building consent as does any property in the immediate surroundings of a listed building
- Restrictions are placed on solar panels installed on properties in a Conservation Area, National Park and World Heritage Site.
The installation of solar PV panels is controlled under Building Regulations. These panels are capable of producing electricity which the homeowner can use and sell, rather than solar thermal panels which are limited to just heating water.
Most installers of the solar PV panels are registered with a CPS (Competent Person Scheme). All relevant parts of the Building Regulations will be covered provided the installer is registered with a CPS. After installation, the installer must then notify the CPS body who then notifies the Local Authority regarding the installation.
If you are intending on installing the panels yourself, or through someone who is not CPS registered then an application for Building Regulation Consent must be made. This application must identify how you will comply with the Building Regulations. The Local Authority may then inspect the work and ask for explanations or alterations to be made. Once the Local Authority is satisfied that the Building Regulations have been complied with, a Completion Certificate will be issued.
Solar panels are regarded as fixtures by HMRC and therefore they are chargeable to Stamp Duty Land Tax. This also applies even where the roof of a property is leased for solar panels.
The income received from the solar panels through tariffs are not subject to income tax so long as the electricity produced is used mainly for domestic purposes. However, where a business installs solar panels and benefits from tariffs, this money is subject to tax.
An important consideration to make before installing solar panels on a property is whether there are any restrictive covenants relating to your property that you are required to comply with. Various breaches have been reported due to installing solar panels such as:
- Breach of consent to plans and alterations
- Breach of non-business user covenants
- Breach of lease covenants
- Breach of nuisance and annoyance
As well as conforming to any notice requirements under a restrictive covenant, your buildings insurer and mortgage lender should be informed of any potential installation.
Leasing a Roof Space
Some utility companies offer to take on leases with homeowners for their roof space in order to place solar panels there. In these circumstances a business tenancy is created which attracts protection under statute. The following should be considered:
- A business lease does not expire at the end of the term unless the lease is terminated and rent payments discontinued.
- The tenant will have exclusive possession of the roof.
- The landlord will remain liable under the lease even if the freehold property is sold. This is because these leases often create personal covenants with the landlord which are not capable of being transferred to a successor.
- Where a homeowner is leasing their roof they must obtain consent from the lender of the property (if applicable).
If you have any queries regarding the information in this blog please do not hesitate to contact a member of the Residential Coveyancing team here.
About the Author
Sophie is a Solicitor in the firm's HR & Employment team.
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