Learn How Solar Panels Can Increase Your Home Value
REenergizeCO is passionate about helping homeowners save money on energy, take control of their power usage, and reduce their environmental impact. We have completed hundreds of solar installations in Denver, Fort Collins, and throughout the Front Range, and we can also help you maximize the value of energy-efficient upgrades to your home.
The process begins with a comprehensive home energy audit. Our team will perform specialized tests to determine where you lose energy and make individualized recommendations for installing solar and other options for improving efficiency.
REenergizeCO is recognized as an approved solar contractor by Xcel Energy and multiple county and municipal utilities. We respect your home, and our team can help you make smart energy improvements whether you intend to sell the house or live in it for years or decades to come.
Contact a solar team member at REenergizeCO today for more information on solar panel installation for your home. You can also reach us by phone in Denver at or in Fort Collins at .
We are here to answer any questions homeowners may have about home insulation, energy audits, and solar power.
Solar Panels Increase Home Value By 41%
The popular online real estate marketplace company, Zillow, also undertakes economic research. In a recent study, they calculated solar premiums for homes listed and sold between March 1, 2018, and February 28, 2019, by comparing prices reached for homes with and without solar energy systems.
Interestingly, even though California is generally considered the state leading the solar revolution in the U.S. , the Zillow research found that New York City reached a solar premium of 5.4%. This was not only 1.3% higher than the U.S. average of 4.1%, but higher than the three Californian metro areas included in the study.
The research shows that San Francisco has a sales price premium of 4.4%, Los Angeles 3.6%, and Riverside 2.7%. Orlando, Florida boasts a premium of 4.6%.
For the average home, 4.1% translates to a sale premium of $9,274. In New York, the extra value amounts to $23,989. These are less than the premiums reported in Appraising Into The Sun, but substantial nonetheless.
Do Solar Panels Ruin Your Roof
Solar panels are not inherently bad for your roof. The potential for solar panels to damage your roof stems from the method of installation. … These nails and bolts are typically driven directly through the roofing and into the attic or ceiling. Unsurprisingly, holes in the roof can lead to leaks forming over time.
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How Much Does Solar Increase Home Value
The majority of real estate agents and appraisers recommend their clients install at least a 6kW solar system to increase their property value. Let us dive deeper into the matter to understand the effect of solar plants on a home’s sale value.
Recent studies have shown that each kilowatt produced by a solar plant equals a $6.000 increase in home resale value. However, this price is average and may vary from state to state and from property to property. In areas with specific climate features like extreme heat or cold, the demand for alternative power sources is extremely high. That means potential buyers are ready to overpay to get a house independent from the local electricity grid. And, of course, the higher the electricity costs in the area, the better home sale deal you may get.
Please, look at the table below to learn how much solar panels would increase your home value:
| PV system size | |
|---|---|
| 10 kW | $60.000 |
The average cost of a solar panel system with installation services is $18.700. This price is actual for the average 1.500 square ft. home. So, considering how solar panels increase home value, you can easily calculate that these amounts are much higher than the total cost of a solar panel system.
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Go solar to save a bundle on electricity and get a high return on investment
The : 1 Rule For Solar Home Value A Brief History
For many years, people used the 20:1 rule of thumb to justify investing in solar. The 20:1 rule in solar means:
Your solar system is worth 20 times more than the energy savings realized in the first year.
Housing Market Capitalization of Energy-Saving Durable Good Investments
Going back to 1983, Ruth Johnson and David Kaserman published a study entitled Housing Market Capitalization of Energy-Saving Durable Good Investments, pioneering this assumption. You can read the full release here, though it looks like youll have to pay for the entire PDF.
Later on, in 1998, another comprehensive study was published by Rick Nevin and Gregory Watson entitled: Evidence of Rational Market Valuations for Home Energy Efficiency, which weve uploaded here if youd like to read it.
These sources of the ratio hypothesis were amongst the first studies that looked at the value energy-efficient equipment adds to our homes, and has stuck ever since.
Since then, researchers have been delving deep to find out just how much solar value can add in terms of dollars. Some are from educational organizations, some from firms that offer resources to help consumers choose the best equipment, and others are attached to companies that manufacture solar equipment.
Lets look at some of the figures that are backed by reputable research.
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Learn More About Solar Panel Net Metering
Net metering is a billing mechanism that allows solar energy customers with on-site solar PV systems to receive credit on their utility bills for the excess electricity they generate and send back to the grid. When a customers PV system produces more electricity than the customer needs at that moment, the net meter records the excess electricity as a credit on the customers next bill.
Then, when the PV system does not produce enough electricity to meet the customers needs , the customer can use the credit to offset the cost of purchasing electricity from the grid. In this way, net metering ensures that solar customers only pay for their net electricity consumption.
Net metering is available in most states, but there are some significant variations in how it is implemented. For example, some utilities allow net metering customers to carry over their credits indefinitely, while others require credits to be used within a certain time period or they are forfeited.
In addition, some utilities have limits on the amount of PV capacity that can participate in net metering, while others do not. As a result, it is important for potential solar customers to research their state and local requirements before installing a PV system.
Does Solar Really Add Value To Your Home
I bet youre wondering if installing solar panels adds value to your home, or in other words, does it make your house more attractive.
Homeowners are constantly looking for ways to increase the value of their homes. Whether it be adding a new deck or converting your yard into an edible garden, there is always something that can be done to boost home equity.
But what about investing in a solar energy system, so you can power your homes electricity from the sun?
Solar can add value to your home and make it more attractive to potential buyers. The premium you can expect varies across different states, partly depending on how sunny it is and the cost of electricity from the grid. A real estate expert can help you understand what to expect in your area.
As the costs of installing solar energy continue to drop and equipment becomes more efficient and sustainable, an increasing number of homeowners are taking the plunge and going solar.
In this article, we do a deep dive into all the studies we could find on whether or not solar really adds value to your home.
Theres a lot to take it, so grab a cup of coffee and take your time going through the rest of this article.
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Value In Solar Energy Is Not Just Money
While solar energy can save a lot of money, added value doesnt only apply to dollars.
These are the most commonly acknowledged benefits of installing solar energy in our homes. All add value in one way or another.
- Solar power reduces current utility bills and saves money
- Solar improves comfort levels in the home for example by making heated floors accessible
- Solar is seen as an investment for future energy savings
- Solar is identified by many buyers as an upgrade
- It enables a greener lifestyle, which many people recognize as increased home value
- Some people consider solar panels to improve social status
- Solar increases the financial value of our home, increasing both the potential resale and rental values
- Installation of solar PV systems improves energy efficiency
- Solar systems help to reduce greenhouse gas emissions and ensure cleaner air
- Solar panels may provide power to the grid during peak demand hours, lightening the load on power plants
But the million-dollar question is, how much value will solar add to your home?
Leveraging Solar Rebates And Incentives
Homeowners who are considering installing solar panels may be eligible for a variety of rebates and incentives. The federal government offers a tax credit worth 30% of the cost of installation, and many states have additional programs that can lower the overall expense even further.
In addition, many utility companies offer solar rebates that can offset the cost of installation. As a result, there are a number of ways to save money on solar panels. Homeowners who are interested in going solar should research the available options to see if they qualify for any rebates or incentives.
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What Kind Of Return On Investment Can I Expect To See
Of course, the big question you will likely find yourself asking is exactly how much you can expect solar panels to add to the value of your home. Ultimately, this depends on a variety of factors including the size of your home, the number of solar panels added, and the location of your home . However, the average U.S. home saw a 4.1% increase in value after having solar panels added. Depending on the value of your home, this can represent a significant return on your initial investment, which would be on top of any money you would have saved over time by making your own electricity.
How Much Do Solar Panels Increase The Value Of A Home
Installing solar panels onto your home is a sizable home renovation. Any responsible homeowner would want to know how much of a return on investment they would receive from a solar panel installation.
Solar paneled homes also tend to sell at a faster rate than those without solar panels. The National Renewable Energy Laboratory discovered that homes with solar panels sell 20% faster than similar-sized houses that depend on an energy grid.
NREL research also suggests that solar panels translate into overall better value for your home. The Lab found that every dollar that a solar system saved on energy costs increased home value by $20. This means that an energy system that saves the average homeowner $400 per year, would add a value of $8,000 to your home.
Its important to note that the added value to a solar-powered home is not as cut-and-dried as most homeowners might hope. This is because buyers have differing opinions on whether solar energy is indeed a valuable addition to the home, or if its just an additional cost. The final sale price of a solar-paneled home depends on a variety of factors explored in the following section.
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Factors That Determine How Much Value Solar Energy Adds To Your Property
While the figures presented above may give you a general idea of how much value solar energy can add to your home, it is important to remember that these are just average values that will vary depending on certain factors. Explained below are some of the factors that decide how much value solar energy adds to your home:
Can You Walk On Solar Panels
BUST – In theory you can walk on any type of solar panel, but either you or the panel, or both, might not be very happy with the outcome! You definitely don’t want to walk on aluminum-framed glass panels, but other types are designed specifically to be walked on, like Solara’s Standard and Power M series.
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Local Solar Installation Prices
The cost of installing a new solar energy system in your area is another factor that is influenced by which state you are located in. In case you are located in an area where the installation cost of a new system is high, so much so that it would be more cost-effective for a buyer to purchase a home already equipped with a solar energy system instead of a non-solar home and make it solar. Your solar energy system will be more effective in increasing the value of your property.
Discover Whether Solar Panels Will Increase The Value Of Your House
- Columbia University Graduate School of Journalism
- University of California, Santa Cruz
- Western New Mexico University
Autumn is an independent journalist and educator who writes about climate, wildlife, biodiversity, and environmental justice and policy.
- University of Tennessee
Within the past decade, more and more prospective buyers are willing to pay a premium for homes with photovoltaic panels. The energy cost savings associated with solar, as well as the growing interest in environmental sustainability, are among the reasons why.
But the size of that premiumand potential energy savings generated by a home solar systemvaries considerably by location. To understand how solar panels increase home value, there are several factors that must be considered.
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Pro Tip For Selling And Listing Your Home
If you invest in solar, the value of your home should increase. Although solar panels are an asset for the vast majority of homeowners when they list the house, a few caveats apply.
First, the solar panels need to be owned, not leased. Buyers are enthusiastic about solar, but they donât want to be locked in to the previous homeownerâs contract.
Second, you need to hire a qualified listing agent to handle the sale. Qualified agents will have taken the National Association of Realtors course Selling the Sun: Establishing Value for Solar Homes. This and other programs enable real estate agents to accurately determine the value of a home with a solar energy system and market it effectively to prospective buyers.
Your agent or realtor can work with the buyer to ensure they hire an appraiser who knows solar as well. Tools such as PV Value® are used by agents and appraisers alike to calculate the line item addition to the homeâs value that solar panels and other upgrades provide.
Without specialized knowledge, tools, and training, the sale of your home will be in the hands of inexperienced agents and standard bank appraisers who donât understand the full value that solar adds to a house. You may be forced to sell your home for less than market value if you donât have the right partners.
Theyll Likely Recoup The Cost Of The System When They Sell
The 4.1% selling price premium the 2019 Zillow study found equals about $9,300 for a median-valued home in the US. The average cost of a PV system is $2.77 per watt, according to EnergySage data from January 2022. This means a 6-kW system would cost about $16,600, before any incentives, and about $12,300 after the federal solar tax credit discount.
Even given that these prices and the incentives offered vary wildly, a nice shorthand is that a homeowner will likely recoup most of the cost of their solar installation when they sell their home. And again, thats before factoring in any of the savings theyll see on their energy bill.
Educating your customers on the basics is a great way to close deals. and let it answer the questions for you.
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Where Can You Find The Greatest Appreciation Of Value
According to the same Zillow study mentioned above, they created a nice chart showing both the percentage increase from solar and the actual dollar amount increase by location. Check out this pretty cool chart they made here:
While it makes sense that New York and California will be up there, given they have some of the highest rates in the country, it was interesting to see Orlando being a standout city as well. Orlando has roughly half-price electric rates vs. the former states mentioned.
Do Solar Panels Increase Property Taxes
Needless to say, when a house goes up in value, the property tax of the house also increases accordingly. However, as of 2022, some states in the US started offering property tax exemptions for property owners who have invested in solar energy or are going to, but of course, there are some conditions that need to be met.
These property tax exemptions essentially mean that residential and commercial property owners can omit the value of their solar system from their propertys valuation for tax reasons. Naturally, this protects property owners from increased property taxes, and therefore, the exemption makes it more budget-friendly for a taxpayer to invest in a solar panel system on a commercial or residential property.
Seeing as how property taxes are collected state-wise, the state taxing bodies hold the authority to offer property tax incentives for purposes such as going solar. Keeping this in mind, whether or not you can benefit from property tax exemptions depends on which state you belong to and whether or not the taxing bodies of your state offer this incentive.
According to current reports by the SEIA, 36 states in the US are offering property tax exemptions for property owners that are going solar.
For instance, Solar systems in New Jersey are excluded from property taxes given that they are utilized to accommodate electrical, cooling, or heating needs.
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