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ENERGY

Are solar panels in Norway worth investing in for your home?

More and more people want to make the switch to greener energy, but Norway isn’t known for its searing sun. So, are solar panels in Norway worth investing in for you home? Here’s what you need to know. 

Are solar panels in Norway worth investing in for your home?
A man installs solar panels on the roof of a home but is it worth investing in solar energy in Norway? Photo by Bill Mead on Unsplash

High electricity prices and the urge to go green mean many in Norway are pondering whether it is worth getting solar panels. 

Solar panels turn the sun’s rays into energy which can be sold to the power grid or used for your own home. 

Figures from The Norwegian Water Resources and Energy Directorate (NVE) show that solar power capacity in Norway has increased ten-fold since 2015. Despite this, the Scandinavian country still lags behind others. 

“Nevertheless, estimated electricity production is less than 1/1000th of the electricity consumption in Norway. So why is this not even higher? Germany has managed to generate over 10 percent of the electricity they need from solar power by 2020,” Associate Professor Martin Møller Greve at the Department of Physics and Technology at UiB told public broadcaster NRK

Below we’ll look at some of the pros and cons of solar energy in Norway. 

READ ALSO: Rising energy prices: How to save on your Norwegian electricity bill

How much does switching to solar energy cost?  

Solar panels in Norway can cost between 40,000 and 130,000 kroner on average for a detached house. In comparison, solar cells cost between 2,500 and 3,000 kroner per square meter, and more design-friendly solar tiles cost between 3,500 and 4,000 kroner per square metre, according to home improvement site bolingsmart.no.

There is a subsidy scheme that can help cushion some of the cost too. The Enova subsidy will allow households to receive 26,500 kroner in support for powering themselves with solar cells and up to 7,500 kroner in grants to help with installation costs. 

How long does it take for the panels to become profitable?

Bjørn Thorud, who works in the solar energy industry and has panels on his home, told NRK that it would take at least a decade to cover their costs. 

“The repayment period is perhaps 10 to 15 years,” Thorud estimated. 

Bollingsmart.no estimates the length of time to be higher at between 17-20 years. 

The panels themselves have a lifespan of between 25 to 30 years. 

However, they may pay for themselves in other ways. The installation of solar panels in other countries, such as Sweden and the US, increases the overall value of the house, Thorud noted.

“We see in those countries that the value of the home rises about as much as it costs to buy solar cells,” Thorud says. 

There currently isn’t any research or evidence that suggests the panels have the same effect in Norway, however. 

Location, location, location 

According to Thorud, southern and eastern parts of the country are best for panels, but they are also a viable option in the north. 

“We work on Svalbard, where there is weaker sun, but where the price of electricity is high. This makes it profitable,” the solar panel expert explained. 

A lot also depends on your own house and its location. 

“But we all have different houses. Some may be down in a valley and have a lot of shade, while others are on a peak and have a lot of light,” Thorud explained.

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PROPERTY

How not to buy a house in Norway: Five pitfalls to avoid 

Buying a home in Norway comes with many challenges, from the dreaded bidding rounds to the small print. Here are some of the mistakes you need to steer clear of. 

How not to buy a house in Norway: Five pitfalls to avoid 

Norway’s property market moves quickly, and most homes do not spend too long on the market. 

Furthermore, rising property prices can make it feel like it’s constantly getting harder and harder to get on the property ladder. 

However, despite rising prices and the market’s breakneck speed, it’s important not to rush into things and end up making a massive mistake. 

Not sorting your paperwork 

Before you are ready to start putting in offers on houses, you will need the mortgage offer from the bank. Therefore, you should fix this before really getting stuck into viewings. 

Banks in Norway offer mortgages of up to 85 percent of a home’s value, with a 15 percent deposit required. 

They will also stress-test your finances against interest rate raises and consider factors such as your income and any existing loans you may have. In Norway, your debt typically can’t exceed five times your income when purchasing a property. 

Once you’ve got an offer, you can approach other banks to see if they will better the offer you received, and after this, you are ready to begin searching as you know what you can afford. 

READ ALSO: What foreign residents in Norway need to know to get a mortgage

Not reading the small print 

There is quite a lot of important small print when purchasing a house that will cost you big time if you don’t properly read it. 

All homes in Norway generally come with an in-depth report on the property’s condition, and in most cases, the buyer is responsible for uncovering flaws in the property. 

During a condition report, an appraiser will check for deterioration on the property, assess the materials used in the construction and thoroughly evaluate the home for any areas where maintenance will be required in the immediate or near future. 

Pay particular attention to things like the electrics, plumbing, kitchen, bathroom, and moisture damage, as repairs to these can be incredibly expensive. 

Then there’s the information about the housing association to which many, but not all, homes in Norway belong. 

It is crucial to check the association’s monthly costs and shared debt, as well as any future plans for major renovations that could increase those costs. 

Being able to tell a well-run housing association with healthy finances from one in a more perilous position can make or break whether a home is for you.

READ ALSO: How to analyse a Norwegian housing association’s finances

Showing the realtor your proof of funds 

Banks issue proof of funds certificates (Norwegian: finansieringsbevis). However, you should never show this to the realtor selling the property. 

This is because it will reveal how much money you have available, and as the realtor is working for and being paid by the seller, they will do what they can to ensure a higher price for the seller. 

Bidding on homes that you aren’t quite sure about 

Once you have your mortgage offer or proof of financing, you can put in offers on homes. 

Be warned, though. You shouldn’t just put in bids to be involved and get a feel for the market. 

You also shouldn’t put in offers on “maybes” either, as all bids in Norway are legally binding. 

This means that you could end up having to buy a property you put a speculative bid on if it is accepted by the owner. 

Agents do their utmost to prevent people from bidding on more than one home at a time, but some offers can slip through the cracks, so you also need to make sure you only bid on one property at a time. 

You also need to make sure you don’t offer more than you have, as you will be expected to follow through with the purchase. 

It is incredibly difficult to back out of a home purchase in Norway, and if you do manage to wriggle out of the process, it will likely end up costing you quite a lot of money. 

Not having money for the other costs 

Given that property is typically the largest purchase of most people’s lives, it’s easy to lose track of the smaller costs. 

One of these is stamp duty (dokumentavgift). When buying a freehold property in Norway, you will need to pay 2.5 percent of the purchase to the state in stamp duty. 

Banks in Norway don’t offer financing for stamp duty. So it’s worth remembering that you will need to pay this cost. 

One advantage of buying into a housing association is that you will not need to pay stamp duty. 

READ MORE: The hidden extra costs when buying property in Norway

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