Falls in the value of houses near to utility solar farms are one of several ‘externalities’ of solar farm construction rarely considered or, if so, routinely dismissed by solar farm developers.

Although some developers and valuers claim there is no effect, or even a slight increase in the value of houses near to solar farms, more careful studies reveal an adverse effect.

The closer to a utility solar farm and the larger the installation, the greater is the adverse impact on house values.  Houses in more rural areas are more likely to be affected than those in more urban areas, although it is difficult to quantify this effect.

A review of the global literature was undertaken and the results of one of the most careful studies, carried out in the Netherlands, was used as a basis for estimating the impact of Botley West Solar Farm (BWSF) on local house prices.  BWSF is surrounded by 11,000 properties of various sorts within 1.5kms of its boundaries. 

The value of all houses (January 2027 median values) within each 0.1km buffer of BWSF was calculated, up to the maximum 1.5 kms distance.  The total value of all properties is over £4.9 billion.

Using the Dutch results the estimated total loss in house values at January 2027 due to the construction of BWSF will be £153.1 million, approximately 3.1% of the total value of all properties, or an average loss of £14,115 per property.  Houses near to BWSF will be more affected than those farther away; for example a decrease in value of £40,475 for detached properties within 0.1 kms of BWSF, falling to £29,240 at 0.5 kms and £8,440 at 1.5kms. 

Future buyers might be more reluctant to consider houses near to solar farms; thus house values may not rise as much in the future. 

The estimated cost of building BWSF is approximately £800 million.  The strike price for Solar PV energy in England in 2022 was £45.99 per MWh.  Botley West’s calculated total output per year could thus generate an annual income of c. £58 million if all output went into the CfD scheme (unlikely).   These figures will change with the significant increase in CfD prices in the current sixth round.

Losses in real estate values are genuine externalities of Solar PV installations.  Losses in amenity value, that is, the health and welfare benefits of walking in green spaces, are difficult to estimate, but are additional externalities. 

The question now arises; “Who pays when private benefits involve public losses?” Click on the image (right) to read the full Report