Solar panels increase property values
Increase home value 3-4% by installing a solar panel system
Multiple studies have shown that homes with solar panel systems are valued and sold at prices above similar homes in their area. Early studies focused on established solar markets such as California found that home values increase by four percent or more when homes are equipped with solar panels. Lawrence Berkeley National Laboratory, a research laboratory affiliated with the Department of Energy, continues to expand on that research as solar grows across the U.S.
- The Lab’s 2015 Selling Into the Sun report analyzed sales of solar-equipped homes in eight different states.
Solar Panels and Battery Storage Can Help You Build Long-Term Financial Gains
Savvy homeowners, potential buyers and appraisers know that solar panels and battery storage can increase your home’s value on the real estate market.
Specific numbers vary between each installation and property. Yet recent studies show an average increase in resale value between $4,020 and $5,911 for each 1 kilowatt of solar panels installed.
At $5,911 per kilowatt, a 5 kilowatt solar panel installation would add an average of $29,555 to the market value of a mid-sized California home. Or a small 3.1 kilowatt system would add an average of $18,324 to the value of a mid-sized home. That’s an appreciable amount that homebuyers are willing to pay.
The price of an average rooftop solar installation and battery is generally recouped in the home’s sale price. Plus, households purchasing solar are rewarded with lower energy bills and healthy tax incentives that can cover the system’s costs multiple times over the life of its warranty.
- Zillow’s article dated April 2019 Homes With Solar Panels Sell for 4.1% More
- Fannie Mae December 2018 Exploring the Influence of Solar Panels on Housing Values
- C|Net August 2011 Econ 101: Solar panels increase home values
Buyers Appreciate Solar’s Added Value
Buyers consider monthly electric bills when purchasing a home. So when assessing the long-term financial value, they’re increasingly open to the premium of a solar-ready home.
The National Renewable Energy Laboratory notes that installing solar panels is viewed as an upgrade, just like a renovated kitchen, and homebuyers across the country are willing to pay a premium for the economic and environmental benefits of a solar home.
With lower monthly electricity bills and tax incentives for new installations, homeowners can realistically anticipate not only recovering their initial investment but also gaining a handsome return on their investment. If you purchase a solar energy system, you can expect to add a sizable percentage to your property value. It’s the smart, sustainable energy solution and is encouraging more Americans to go solar every day.
Influencing Factors of Solar’s Added Value
The added property value from a solar energy system varies by market and constitutes many factors. The value added to a home from solar panels can change based on the following:
- Local cost/price of electricity
- Frequency of power outages
- Environmentally conscious community
- Solar installation prices
- System replacement value
- Age of solar system
- State incentives
- Understanding of solar technology and benefits in the area
Homeowner/Seller Incentives for Installing Solar Panels
In addition to increased property values over comparable non-solar homes in their community, homeowners purchasing solar systems are realizing many financial benefits including:
- State rebates and incentives (such as net metering)
- Net metering in CA
Though there have been some recent state battles involving net metering, this incentive is still available and is undoubtedly one of the biggest reason to go solar in California. In the Golden State, any solar homeowner will receive bill credits for their extra solar power at the retail rate from his or her utility. The capacity limit is 5 percent of aggregate customer peak demand for California's net metering program - a statewide incentive.
Check out the top utility net metering programs in California:
- Los Angeles Department of Water and Power (LADWP)
- Pacific Gas & Electric (PGE)
- Southern California Edison (SCE)
- San Diego Gas & Electric (SDG&E)
- Federal solar investment tax credit (ITC)
- Replacing grid electricity with a sustainable, often cheaper option
And, as the seller of a solar property, there are tremendous advantages in the real estate market such as:
- Higher asking price than comparable homes without solar
- Solar panels are viewed as an upgrade by potential buyers
- Homes with solar panels often sell faster than those without8
- 100% return on solar investment upon home sale
Homeowners with a solar energy system who may want to sell should note that prospective buyers are interested in documentation showing that the installation was done properly from a reputable solar dealer, and proof that the system is reducing electric bills. HomeLink Advisors can show you how to document the cost savings on your electricity bill.