There are hard-hitting truths lurking behind the attractions and incentives of photovoltaic panel installation.
At first, installation seems laden with sunshine – literally and metaphorically. Income can be generated through free electricity with a chance to sell excess supply to the grid. The panels are environmentally friendly. The government even subsidises the installation tax-free.
But there are implications.
Installing panels on a residential block will often require planning permission. This may depend on their visual impact, including whether they are installed above the ridgeline, or project less than 200mm from the roof.
Panels can also have technical consequences. The panels’ weight – which can increase the load of the roof by 15%, may require expensive strengthening work. Furthermore, the panels will also need to be secured to prevent wind uplift, with different approaches for pitched and flat roofs.
Another issue is the suitability of the roof and whether the existing roof coverings ought to be upgraded/renewed before the panels are installed or whether any available guarantees for the existing roof coverings will be affected by the works.
Then there’s the future. Solar panels come with a 25-year warranty and low ongoing maintenance costs, so your block will need to budget for annual checks and cleaning.
Now for the law.
First, consider the Lease.
Most solar panel installations will be installed on the roof. The Lease should identify which parts of the block belong to the leaseholder and which have been reserved to the Landlord. The Lease will usually contain a plan providing further illustration(s) which may be helpful in identifying who is responsible for the installation location.
Whilst most leases permit a landlord to recover a service charge cost for repairs, it is more unusual for leases to allow recovery for works classed as “improvements”.
There is no single test to determine whether particular works are improvements or repairs.
The most useful guideline is: “is the repair is so radical and extravagant as to amount to creating a new thing in place of what was there and not a mere replacement?”
It seems likely the courts/tribunals would decide solar panel installations are “improvements”, subject to the Lease provisions.
Generally, service charge clauses are read restrictively and only permit the recovery of expenditure if the lease permits it. So, improvements will not be recoverable without clear words to that effect.
Who will be responsible for maintenance? It is unlikely the lease will incorporate provisions and variations may need consideration. Also, the installation is likely to be connected to the mains. Does the lease contain provisions for the running of cables around the development?
Invariably leaseholders will proceed on the basis that any “returns” will help baluster the Reserve Fund. The lease should be checked to see if (i) it contains provision for a Reserve Fund and (ii) whether the Reserve Fund permits such “returns” to be accumulated (unlikely).
Whilst the idea of solar panel installations may sound attractive due to the potential “returns”, given the above legal consideration, the process may not be so simple.
In summary, solar panels may bring sunshine to your block. But without an experienced surveyor and solicitor on your side, a number of dark clouds may follow.
Yashmin Mistry is a Solicitor and Partner at JPC Law
