In the move towards greener living, many homeowners have, or are considering solar panels, with many thinking of solar panels and Equity Release at the same time. Whether you’re contemplating installing solar panels or already have them, it’s important to understand how they impact on Equity Release plans. Let’s look at what you need to know about solar panels when considering Equity Release.
Solar panel ownership and Equity Release
Solar panels can be owned outright, financed over time, or leased. Each method of ownership has implications for Equity Release, and lenders have specific rules. Informing your adviser about your solar panel situation can streamline the application process.
The particulars of leased solar panels
Leasing solar panels involves installing them under a rental agreement, where the solar company retains ownership. This can complicate Equity Release applications because the lease must meet certain lender criteria, possibly requiring a deed of variation so they meet these standards.
Dealing with deeds of variation
If there’s a hitch with your solar panel lease, a deed of variation might be needed. This legal document, once approved, can rectify lease issues, allowing your Equity Release to proceed.
Costs and delays
Sorting out solar panel lease issues can incur costs, typically around £500, plus additional fees. Addressing these as early as possible helps prevent delays in your Equity Release process.
Compliance and additional paperwork
If your solar panel lease is compliant with lender criteria, there may still be additional documentation required, such as the certification of the solar panels which ensure the quality and installation company’s credibility.
Owned solar Panels: documentation matters
Even if you own your solar panels, lenders will likely request evidence of ownership and proper installation, which could include certificates, receipts, and guarantees.
Lost lease paperwork
Misplaced lease paperwork for solar panels can be a stumbling block. Your solicitor may need to obtain new documents, potentially at an extra cost, to satisfy the lender’s requirements.
Hire purchase agreement considerations
If your solar panels are under a hire purchase agreement, lenders might require you to settle any outstanding amounts before securing Equity Release.
Lender specifics
Each lender’s approach to solar panels can differ, so providing comprehensive information to your adviser is crucial to anticipate and resolve potential issues early on.
In summary, having solar panels should not inherently prevent you from taking an Equity Release. The key is transparency and thorough preparation to ensure any potential issues are preemptively addressed, minimising application delays.
