Do Solar Panels Increase the Value of Your Home?
On average, solar panels increase a home’s value by over 4%. Depending on various factors like the size of the house, the solar plant, or the location, this number may go up or down. When speaking about solar panels, the usual topics that crop up are how the energy is virtually free of cost and how it is good for the planet. The topic of whether they increase the worth of the home over which they are installed is often overlooked.
A buyer will surely pay more for a home if there are assured savings on recurring expenditure on power. It therefore means that if you are worried your solar investment will be wasted when you decide to sell your house, you do not need to.
The Statistics Behind the Claim
There have been more than one study on the relation between typical home prices and the presence of solar panels on their roofs. For instance, one of the researches is by the Zillow Economic Research’s study of listing descriptions and transactions. Done between March 2018 and February 2019, it comprehensively lists out the percentage increase of home prices per location. The following graph gives a clear idea:
PV premium estimates for new and existing homes in California as well as the rest of the US (Source – Zillow)
Although there was a considerable variation in the amount of increase in house prices, what is important to note is that all of the prices are different, and none of them dropped.
A similar study, backed by the US Department of Energy, was done by the Lawrence Berkeley National Laboratory, named ‘Selling into the Sun’. Interestingly, this study used a methodological ‘Base Model’ approach and arrived at the same result as the previous study.
Among the various results this study produced, the following table gives an idea about the rise in PV premium in terms of $/watt (circled row).
(Source – Selling Into the Sun)
This points us to the fact that on average, a rise in about $4/watt is experienced as shown by the tabulated data. Considering a typical 5-6 kW system, this means the home value is increased by around $20,000-$24,000. Noting the average cost of installation for this type of a system, it is surely a profitable deal.
There are also similar studies by the NREL as well as the office of ‘Energy Efficiency and Renewable Energy’, and they point to the same facts using slightly different metrics.
Solar Homes Sell for a Premium (Source – energy.gov)
The Value and Cost of Solar Electricity (Source – Planning for PV, NREL)
From this data we can now see the commonly known benefits of solar panels. Their ability to improve your home’s resale value is another reason why they are worth it.
Factors That Control the Increase in the Value of a Solar-Fitted Home
In addition to the pricing stats, the Berkeley lab study also pointed out that the increased worth of a home will depend also on the age of the solar panels installed. This is a reasonable occurrence, given that the existing owner has already reaped a portion of the benefits the solar plant had to offer.
The location of the house is another important factor that decides how much of your home’s value will go up. This fact is clearly visible in the results of the Zillow and Berkeley research.
Additionally, it is important to note that whether the solar system is owned or leased also plays a crucial role in whether the price will be enhanced or not. Leased systems, for self-evident reasons, will not positively affect a home’s price.
A sizable number of home owners find themselves curious about the prospect of installing solar panels. However, the uncertainty in owning the same house for a few decades holds them back from deciding in favor of solar.
If you are curious about the value that solar panels would bring to your home, you can get a quote from a local solar company.
- Solar Homes sell for a Premium – Department of Energy
- The Median Home Price in the U.S. – CNBC