Do Solar Panels Increase Home Value? Yes! Zillow found that homes with solar energy systems saw a 4.1% higher sales value. The U.S. Department of Energy’s Lawrence Berkeley Laboratory found homes with PV systems saw a $15,000 higher value in their sales. The value of solar has never been higher nor provided greater returns.
How do Solar Panels Increase Home Value?
We mentioned the numbers, but why? Solar’s value continues to grow, especially in California. For decades, the arguments come back to energy independence, faster payback, and residual income.
For example, a home worth $250,000, would mean an additional $10,000 added to your selling price. However, sellers have been able to add up to $18,000 to the same type of home.
California buyers love:
- Saving money with no energy bills or rate fluctuations
- Having dependable energy backup during any power outages
- Residual income that has little or no time and work involved
Who doesn’t love those things? That’s why the value of solar is increasing, not to mention:
- Technology is improving, so prices dropped 80% in the last ten years. That makes solar investments approximately $2.50 to $3.38 per watt now.
- Incentives and financing offer at least 26% tax credit rebate and $0 upfront cost.
- Grid-tied connection for continuous energy to match any demand.
All in all, you can’t go wrong with a solar investment. With the long-term financial benefits, the solar panels will help you generate the electricity you need for your home and save you money.
Solar Investment Caveats
Full disclosure, there are two caveats you need to be aware of with this built-in value boost solar systems give your home.
- First, you must own your system. We don’t mean you have completed the payback period. We mean you are not in a solar PPA or leasing agreement.
- These two options are challenges when you are trying to sell your home. Although you may get into a solar system cheaper, solar PPA and leases:
- Trap you in long-term contracts where you still pay for your energy.
- Have rate escalations based on the solar company’s determination.
- All tax or rebate incentives go to the solar company and not you.
- Second, diminishing returns and longer sell times.
- On average, solar-equipped homes have seen up to eight days extra on the market than nonsolar-equipped homes.
- That’s not that big of a deal with the extra money you will get, but it is something to remember if you have a quick sale.
Diminishing returns come with your system’s size and age. Newer systems fetch higher home values, which makes sense. You may not be able to ask for the same value as a comp home due to your system’s age.
Larger-sized systems have faster paybacks, greater returns and may get you higher prices, but the more powerful PV systems may not increase proportionally to the installation cost you paid.
That wasn’t bad or scary. You can avoid both by owning your system and getting the right professionals to size it.
The bottom line is the increasing value of solar transfers to your home’s value. Whether you plan to sell your home or not, the added value a solar investment brings is just one of the many reasons to get a solar system installed today.