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Moving into a house with solar panels - do I need to worry?

  • 10 April 2018
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Hi everyone, hope you're all doing well! I'm looking to move, and most of the houses in the area I'm looking to move to have solar panels preinstalled. Do I need to know about anything before I move into one? Another quick question that has always intrigued me - if you profit from solar panels by feeding back into the grid, will that count as income the same as a job, or will it just reduce energy bills and that's all. I've looked at sites like this tax calculator but really can't find much about it. It's not a hugely important question, just me being curious :8

Thanks in advance to any replies 🙂
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Best answer by Transparent 10 April 2018, 15:29

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Updated on 15/06/21 by Jess_OVO

 

Great to hear that your new home has solar panels - there’s no need to worry, but there’s a few things you may want to check.

In order to register to receive payments for the energy fed-back to the grid - we’ll need check that you’re now the legal owner of the solar panels. Make sure you have a document showing this, such as the fixtures and fittings document from the house sale or a solicitor’s letter.

The type of payments you’re able to receive will depend on when the Solar panels were installed - if the previous owner registered for Feed-in-Tariff (FIT) payments with OVO before April 2019 you can complete our Feed-in Tariff Change of Ownership Form to continue receiving these type of payments. After this date the Feed-in Tariff was replaced by the Smart Export Guarantee (SEG) - find out more about applying here. It’s worth bearing in mind that you don’t need to register for SEG payments from the same company that supplies your energy - you may even want to switch SEG suppliers.

 

Whether you’re receiving FIT or SEG payments, these are tax exempt for domestic supplies. 

 

The best part - by using and exporting energy from a renewable source, you’ll be reducing the carbon impact of your energy use and contributing to our journey to Plan Zero.
 

 

Personally I don't think you'll profit from having solar panels installed, so income tax shouldn't come into it. However if you do I can imagine it will be taxable, and if so you will add it on top of your current salary (see here).

Transparent has a great answer there - and indeed, you should be delighted! :)

Any updates on the move? Hope it's all going great 😉
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Thanks for the update on this Topic @thadmories,

I'd forgotten that I did subsequently do a bit more research into the question of paying income tax on grid-connected micro-generation. There's a HMRC Guidance Note here which describes a 20% excess generation as non-taxable.

I think even that is arguable. After all, if your household were operating as a business, then you'd also be claiming the original capital cost of the solar-installation against tax.

I'd be interested to know what an Accountant thinks of this.
Thank You
Hi Steve,
just one thing to be wary of when you move into a property with pre existing panels...make sure that somewhere you have it in writing that you have bought the solar panels with the house, if that is the case. We didn't and are having to go through a lot of red tape to show that we own them. You will definitely benefit from them, and if you have an immersion heater and a hot water tank, have a SOLIC200 fitted. Free hot water everyday 🙂
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Good point @Hadstontyke. I hadn't heard of the SOLIC200 before but there's a good review here. Note that the reviewer is a qualified electrician and is therefore permitted to make the required connections inside the consumer unit. Buying in an electrician could double the cost of this strategy.

These solutions to maximising the use of solar energy will change over the next 5 years or so. Electrical energy is the highest grade we have because it can readily be changed into other types. I would expect to see a gradual shift towards it being more financially viable to store the output of solar PV panels using an electric vehicle (EV) or something like the OVO Home Storage Battery. This electricity can then be resold at a profit according to peak demand on the grid.

PV panels are actually only 16% efficient (max) due to the chemical properties of the silicon from which they're made. If you want to maximise sunlight energy to be used as heat for domestic water use, then you're better off installing solar thermal panels which are up to 90% efficient.

Unfortunately, government initiatives and subsidies have clouded the issue, leaving most consumers unaware of the differences between the financial viability of a strategy as opposed to its energy efficiency. As the payback time on installation of renewable energy systems is typically in excess of 10-years, we need to be making better-informed decisions on which strategies to adopt.

I have no doubt that this Forum will continue to generate much debate over the next few years as we start to see innovative new technologies hanging off the new generation of SMETS2 Smart Meters.
I can see that things have moved since we had our solar panels installed in 2014.. Thank you so much for the feedback. I think some reading will have to be done.
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If you'd like to start with some very informative reading, @Hadstontyke, you could do a lot worse than this page from Ofgem's site which outlines their forthcoming strategy.

The Government and Ofgem refer to the next stage of National Energy Management as Demand Side Response, but that term hasn't yet translated into common usage. It takes about 5 years to go through public consultations, build regulation structures and have them passed into law by Parliament. So if you want to see where Ofgem are basing the strategy, download this PDF of a PowerPoint presentation to Ofgem in 2014 by Tim Bailey and Peter Morgan of DECC.
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Thanks @AlbertRodriguez.

The best renewable-energy installations I've seen have been those by small local companies. They have a reputation to lose!

The worst have definitely been the larger national companies. When they specify incorrectly or install something badly, there is little chance of this being discovered by other prospective customers.

My nearest market-town has just one installer of solar/wind/hydro generation. The MD comes from a physics background and has a clear understanding of the underlying principles. He doesn't need to advertise because his satisfied customers tell all their friends, neighbours and work colleagues.

That's how it should be 🙂

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