Thursday, November 24, 2022

How Much Do Solar Panels Add To Home Value

Faq: Do Solar Panels Increase Home Value

Do SOLAR PANELS add VALUE to your Home?

Do solar panels hurt the resale value of your home?

Generally speaking, the opposite is true installing a home solar array actually increases the resale value of a home, particularly if you have a high-efficiency system that helps lower monthly energy bills.

Solar literacy in your local community is an important factor here, but for most homeowners, the answer to this question will be a resounding no. Multiple studies have shown that buyers are looking for more energy-efficient homes to reduce their carbon footprints and help save on electricity bills.

Do bigger solar installations present a better value-add than smaller systems?

Bigger solar installations may present a better value-add than smaller systems. However, in many cases, it’s not the number of panels that matters so much as the power output. A smaller system, assembled with the most efficient solar panels can be just as impactful as a larger, lower-efficiency system.

The aesthetics of the system may also be a factor, with many buyers actually preferring smaller, less conspicuous systems.

How much value does solar add to the home?

A few studies have shown that solar installations increase a home’s resale value by up to $6,000 for each kilowatt of solar panels installed, or by about 4.1% of the home’s value. However, this can vary quite a bit from one geographic location to the next, even for comparable homes with similar solar panel systems.

Do you really save money with solar panels?

Here’s How Much Adding Solar Panels Will Boost Your Home’s Value

In addition to lowering your utility bills and contributing to your eco-responsible lifestyle, a solar panel system can increase your homes resale value. Which makes it one of the best home improvements, ROI-wise, you can undertake. This article from MONEY reviews a recent study on solar’s effect on home values.

Solar panels are good for the environment, but are they good for the value of your home? A new study suggests the answer is yes although whether its enough to actually cover the cost of the panels depends on where you live.

Americans are investing in solar power, installing enough systems to power 12.3 million homes in 2018, according to the Solar Energy Industries Association, a trade group. But whether or not those solar panels pay off depends on a lot of factors, from the cost of electricity in your area to the shape of your roof. One of those factors: their impact on your homes value.

On average, solar panels raise a homes value by 4.1% across the U.S., according to a new Zillow analysis of homes across the country thats a boost of $9,274 on a $226,300 home, according to the study.

The analysis compared homes with and without solar-energy systems that were listed for sale and sold from March 1, 2018, to February 28, 2019, according to the methodology. The study controlled for the homes attributes, like bedrooms, bathrooms, square footage, age and location, to determine an areas solar panel boost.

So What Benefit Is Given To A House By Solar Panels This Relies On Various Variables

  • Where do you live in the country?
  • The electricity price in your region
  • Your homes scale, condition, and original value
  • The solar panel era
  • How well the machine saves electricity

The Berkeley Lab study states that every watt of solar power installed adds about 3 dollars to a homes value.

On average, 5,000 watts of electricity is produced by the national residential solar system.

Translation: A solar-equipped home could likely add about $15,000 to a home s value. Very incredible!

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Cost Of The Solar System

Though prices may be dropping, the cost of your solar system will vary depending on the type of system you choose, the size of your system, and your location. Some states have rebates and incentives that reduce the overall cost of solar electricity systems.

In general, the National Renewable Energy Laboratory says a 2-kilowatt system, which should offset the electricity use of an average-sized home, will cost about $8 to $10 per square foot before state and federal rebates and incentives.

Maintenance

Solar panels dont require much maintenance, aside from an occasional cleaning. The price of cleaning should run between $150 and $330, and cleaning should be done on an as-needed basis.

Providing regular cleaning and maintenance to your solar panels may be required if you lease your panels or to keep your warranty current. Read the fine print in your agreement, so youll know if cleaning and maintenance is required .

Tax credits

The EPA offers tax credits to homeowners who install solar energy systems. Until the end of 2019, that tax credit was 30% of the total cost of your solar system. Beginning in 2020, however, the percentage begins to step down. By the end of 2021, the credit disappears completely.

If you install your solar panels in time to receive the tax credit, you can choose to either deduct the tax credit directly from your tax payment if you owe federal taxes, or deducted it from your taxable income when you file your taxes.

Factors That Influence The Value

How much do Solar Panels Cost for Your Home?

While these simple calculations can give you a ballpark, there are a number of factors that influence the value-add of solar panels. Some of the most prominent include:

  • Geographic location: Different communities experience different electrical costs . Additionally, geography can influence the amount of sun exposure you get, as well as the social benefits of installing solar power.
  • Local solar installation prices: Another geographic factor is the cost of getting a new system in your area. If a buyer would save money by purchasing a home with a system already installed, it will make your home that much more valuable.
  • System output: As you can see from the chart above, a larger system with more energy generation will provide more added value.
  • System age: If you have an older solar system, you’ll need to account for depreciation. Older systems won’t add that much value to your home when you sell it, as there’s a higher chance the buyer will need to do repairs or replace parts sooner.
  • System replacement value: Along the same lines as system age, how expensive or difficult parts of your system would be to replace affects the added value of the system overall.

Read Also: Is Solar Energy Bad For The Environment

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.

How Much Does Solar Increase Your Propertys Value

The National Renewable Energy Laboratory offers a useful guide when determining how much your propertys value will go up. According to its research, each additional $1 in energy bill savings adds $20 to your homes total value.

This rule of thumb varies depending on a number of factors, including:

The location of your home. Installations in active solar markets like New Jersey typically yield higher returns than comparable installations in less developed markets.

The size of your installation. Property value increases are directly proportional to the number of solar PV panels installed.

The value of your home. Larger houses usually receive higher nominal boosts in property value. However, this increase often represents a smaller percentage of the total home value.

The exact numbers vary from property to property and installation to installation, but recent research shows an average increase in resale value being $5,911 for each 1 kilowatt of solar installed. In a state like California, for example, a small 3.1-kilowatt system can add an average of $18,324 to the value of a medium-sized home.

The property value advantages of solar energy only increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home.

Its important to note that these statistics only apply to todays housing prices and utility rates. As electricity prices go up , the advantages of solar energy rise proportionally as well.

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The Question Of Warranty

Many buyers will also want to know about the warranty on the solar package, especially if theyre not incredibly thrilled to be stuck with solar in the first place. Zaragoza mentions that you should always ask your solar provider what will happen to your warranty if you decide to sell the home. Knowing that you can transfer the warranty to new owners offers them a big peace of mind, and if this isnt possible, then this might be a reason to reconsider the purchase or lease agreement.

Homeowner/seller Incentives For Installing Solar Panels

Do Solar Panels Add Value To My Home?

In addition to increased property values over comparable non-solar homes in their community, homeowners purchasing solar systems are realizing many financial benefits including:

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 solar4
  • Solar panels are viewed as an upgrade by potential buyers8
  • Homes with solar panels often sell faster than those without8
  • 100% return on solar investment upon home sale1

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.8 Sunruns Solar Advisors can show you how to document the cost savings on your electricity bill.

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Saves You Money On Your Electric Bill

Running on solar is essentially free electricity for the panels 25-year lifespan once you save enough on your energy bill to gain back your initial investment.

The initial upfront price could save you from increasing utility prices over the next couple of decades since utility rates have increased by about 2.9% annually for the past 15 years. There are also federal, state, and local incentives, such as the federal tax credit that allows you to deduct 26% of the total installation cost, making them even more affordable for the average homeowner.

Factors That Influence Home Value

Why are many prospective homebuyers willing to pay a considerable premium for homes with pre-installed solar panels? Theres no single explanation. Certainly as residential solar becomes more common, buyers increasingly view it as an upgradea home improvement likely to generate revenue in the long run.

Recommended Reading: What Is The Tax Rebate For Solar Panels

New Vs Older Home Solar Systems

A newly purchased solar system with efficient technology, more time on its warranty, and less need for maintenance may significantly add to property value. Homeowners with older solar systems should factor in some depreciation and anticipate a slightly lower premium upon sale.

Even if you sell your home in the future, updating your house with a solar installation is a sound investment versus other possible renovations.

A recent report shows that the cost of a residential solar system is less than half its price in 2010.10 Following this trend, as solar technology becomes more efficient to install, there may be a smaller premium on property values. However, lower installation price and increasing electricity costs should accelerate return on investment thanks to reduced electricity bills from buying a new residential solar energy system.

Curb Appeal Warranties And Other Concerns About Solar Panel Value

Do Solar Panels Add Value To Your Home?

Many homeowners are interested in solar power, but have held out because of concerns about curb appeal. However, new innovations in solar panels are rapidly making them more visually appealing. Todays solar panels are smaller, sleeker and offer increased flexibility of configuration. And depending on your roofs pitch, todays panels can appear barely-there. Another option, depending on the area of the country in which you live, are roofs with solar shingles. These solar shingles can blend into the architecture of a home and that of surrounding homes. If you have any concerns about solar panels and curb appeal, let your solar contractor know. They will likely be able to find an option that meshes well with your preferred aesthetic.

Homeowners also fear that they will be on their own if something goes wrong with their solar panel system. However, as with any major home renovation, you can allay those fears by ensuring your solar panels have proper manufacturer and installer warranties included. These warranties should give you peace of mind. And unlike other parts of your home, a solar panel system has no moving parts that will wear out over time, and they typically require little maintenance or repair.

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A Win For Landlords And A Win For Renters

Renters have also indicated that they are willing to pay more for rentals with solar installed little surprise when you consider the direct savings on their energy bills. Therefore, landlords looking to increase the value of their investment property can benefit greatly from installing solar panels. Not only can they charge more in rent, but the appeal of solar for renters means your property is more likely to be rented out all the time. All landlords will recognise the value in that.

Some states currently offer rebates specifically for landlords. For example, Victorias Solar for Rentals program offers eligible rental providers a rebate of up to $1,400 for the installation of solar panels on their property. Eligible landlords can also apply for an interest-free loan of up to $1,400 to further reduce the upfront cost of the solar panel system.

Solar Panels Are Adding Value To Homes

Solar panel owners are seeing an increase in their property values over comparative homes in their neighborhood. The main reason for this increase in market value is that homes with solar panels offer a definite financial benefit to future owners.

Potential buyers are encouraged to purchase homes with an installed solar energy system because of:

  • The ability to replace your electric bill with a much cheaper and cleaner option
  • The reduction of our carbon footprint

Recommended Reading: How Much Does A 20kw Solar System Cost

Use Our Home Solar Calculator To Help You Estimate Home Value Increases

To quickly and accurately calculate how much solar you do need, we recommend using our solar calculator. That information, combined with the formulas above can also help you quickly estimate your expected property value increase with solar.

In the section below, we provide an example of how to create a ballpark estimate of the value of your home with solar panels installed using our calculator and the above formulas.

Our calculator takes the following factors into account in order to give you an accurate estimate of your installation costs and solar savings:

  • Your available roof space
  • Your utility company electricity rates
  • Available solar incentives

In our example, we use Zillow as well, to help you get a gauge on your initial real estate value without solar.

When you enter your address into a search engine like Google, youll quickly find a Zillow link to your property. On that page is a listed Zestimate value, or the amount your home would probably sell to a new owner for based on sale data from similar types of homes.

Find out how much a rooftop solar system will cost you

Do Bigger Installations Increase Home Value

Do Solar Panels Add Value To Your Home?

Home solar energy is yours to control while adding property value. Research shows, however, that the wattage generated by a solar installation does not proportionally raise the value of a home. So, installing a massive solar array on your rooftop wont necessarily equate to a higher resale value. A solar installation that sufficiently meets your energy needs is enough for you to recoup the price of your installation.

Also Check: How Much To Install Solar Panels On A House

Final Thoughts On Solar Panels And Property Value

In terms of property value, solar panels can certainty add value to your home and can make your property more attractive to buyers.

Ultimately, solar panels are a long-term investment that residents must be prepared for. Whether youre eco-conscious, looking to save money, or a mixture of the two, the upfront costs to install solar power into your home can be daunting. The immediate rewards that can be reaped, however, are very much worthwhile. With immediate savings on your energy bills, you also wont have to worry about the following:

  • Little to no negative impact on your property value with many property prices benefiting from using solar.
  • Over-reliance on the National Grid for your energy supply .
  • Having a high carbon footprint, as your solar panels save tonnes on carbon emissions each year. Through generating clean energy.
  • Price increases on your annual energy bills due to the production of your very own energy. In the meantime earning extra cash on your excess solar energy!
  • Maintenance solar PV systems are expected to last 25 years. Meaning your system will most likely see you through your residency if you are unlikely to move.

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