How much do solar panels add to home value?
One of the benefits of solar panels is the value they add to a property. The energy produced by a solar energy system allows homeowners to save on their utility bills and benefit from net metering. Although the amount of value that solar panels can add to a home can vary.
Factors that affect the added value of your solar panels
The value that solar panels can add is affected by different factors. These factors can include your solar energy system and other external ones:
- Location is an important factor that affects the added value of your solar panels. This is due to multiple reasons, the first being the cost of electricity in your area. There is also the amount of sun exposure and local climate in your area, which directly impacts the performance of your solar panels. There are also the local social benefits of having a solar energy system.
- Local solar pricing will also determine the added value of your solar energy system. Solar energy system pricing can vary between local municipalities and states. Some prospective homeowners may even pay a premium for a home with a solar energy system included.
- The solar energy system’s age, output, and overall value will also factor into the added property value. You have to consider that a solar energy system is an addition to the property. If your system is capable of larger power output, it will also add to the value of your system. Depreciation will be determined by the age of the system, and the value of the components. If your components are expensive or scarce, it will also affect the added value of your system.
How much value can solar panels add?
- Studies conducted by Berkeley Lab note that homeowners around the country are willing to pay a premium of about $15,000 for a home with an average-sized solar array. With solar equipped homes sell faster in comparison to those without. The research was supported by funding from the U.S. Department of Energy’s SunShot Initiative.
- Zillow Research has also conducted a study that validates the added value of solar panels. Zillow analyzed the listing descriptions and transactions between March 1, 2018, and February 28, 2019. Homes with solar panels sold for 4.1% on average throughout the U.S., New York had the highest premium at 5.4%, while Riverside CA had the lowest premium at 2.7%.
- The National Renewable Energy Laboratory (NREL) notes from the Appraisal Journal, that every dollar saved on energy through solar increases home value by $20. This means that a solar energy system that saves $200 per year would also add $4,000 to the value of a home. What’s also worth noting from the survey is that the surveyed homebuyers say they would pay up to 10% more for a solar-equipped house.
While these surveys and studies all state varying amounts of the added value they all conclude that a solar energy system does add value to a home. Although it must be noted that this added value only applies if the solar energy system is fully owned and isn’t under a leasing contract. If the solar energy system is borrowed, it’s not included in the property value. If the solar energy system is being leased, the owner and buyer will need to work out the system’s leasing. Whether the buyer will take on the previous contract or not.
Why do solar panels add value to a home?
There are multiple reasons why solar panels can add value to a home:
- The reduction in utility bills is one of the greatest benefits of a solar energy system. Reducing or even eliminating the money spent on electricity can yield great savings in the long run, especially considering the rising utility prices.
- Buying a home with a solar energy system installed is much more convenient. If a home is already equipped with a fully purchased solar energy system there is no need to install a new one. All that’s left is to maintain the current system.
- The environmental benefits of a solar energy system can also add value to a home. Especially with the movement for cleaner and more efficient homes.
These are just some of the reasons that solar panels can add to a home’s value. Some homebuyers may have their reasons why a solar energy system adds value to a home.
Add value to your home with solar energy
If you’re looking to add value to your home and save on utility bills, we are here to help. Our website also has a free online estimate tool that generates a personalized report for you from a simplified questionnaire. That report will contain the potential savings you can net, and the cost of a solar energy system installed on your property. You can also contact us directly via phone at +1 (602) 363-8919 or via email at Scott@elitesolarenergy.org for more information regarding solar energy for your property.