Converting your house to an green energy, solar home will increase its value
In a tepid real estate market, having any “edge” to publicize about your home with potential buyers is a great benefit. Current research shows that having an energy-saving asset on your home, such as a solar panel array, can provide a substantial increase to its value and differentiate it in a crowded market.
An analysis released by the National Bureau of Economic Research (NBER) found that solar panels add between 3-4% in value. The authors of the NBER study said, "Our evidence suggests that similar to other home investments such as a new kitchen, solar installation bundles both investment value and consumption value." In this report, the investment value provided an increase in the sales price whereas the consumption value provided more intangible “warm glow” benefit because the home incorporated environmentally-friendly energy production.
This NBER analysis supports information from an April 2011 report released by Department of Energy’s Lawrence Berkeley National Laboratory.
“We find compelling evidence that solar PV systems in California have boosted home sales prices,” says the lead author Ben Hoen, a researcher at Berkeley Lab. “These average sales price premiums appear to be comparable with the average investment that homeowners have made to install PV systems in California, and of course homeowners also benefit from energy bill savings after PV system installation and prior to home sale.”
The authors calculated that, on average, solar Photovoltaic (PV) panels could add about $5.50 per watt to a home’s resale value. This means that the owner of a typical solar home with a 3.1-kilowatt pv system stands to make an extra $17,000 above the cost of a comparable, non-solar home.
“This is a sizable effect,” says Ryan Wiser, a Berkeley Lab scientist and co-author. “This research might influence the decisions of homeowners considering installing a PV system and of home buyers considering buying a home with PV already installed.”
In a comprehensive study discussing real estate and solar, the National Renewable Energy Laboratory (NREL) recently found that homes which already had solar installed appreciated 20% more and sold 17% faster than non-solar homes.
NREL did exhaustive interviews with home buyers and found that if available homes already had solar installed, buyers were more likely to purchase a solar home. But if solar was offered as only an option by a developer (rather than being already installed), the decision to go solar was often not made. This could be because of misinformation or misconceptions about the benefits of solar conveyed to the potential purchaser – probably because the facts were not effectively explained (or perhaps understood) by the real estate agent.
Even with the current solar incentives available from a number of utility companies, as well as tax benefits, some homeowners are hesitant to invest in solar because they feel that they won’t recoup their investment. However, data from these studies support the concept that solar home owners stand to make more money at the time of resale.
Besides adding value to a home, a solar installation with net metering can also provide the homeowner with the added benefit of offsetting most, if not all, of their electricity expenses. Net metering allows a homeowner with a solar array to sell excess electricity generated back to the utility company’s power grid. Any electricity sold back to the grid then shows up on the electric bill as credits, which are deducted from their overall utility expenses.
With utility companies raising their rates an average of 6% annually, a solar installation with net metering can be a hedge against the ever-rising cost of electricity used in the home. This is being recognized (and appreciated) by potential home buyers.
Syndicated Solar has expert Solar Energy Consultants in its Residential Division who are available to demonstrate to homeowners all the benefits of installing one of our pre-engineered solar system packages. PV system and installation pricing has never been more attractive and homeowners can immediately start reaping the benefits of lower electricity bills – whether their home is on the market or not.
- Solar homes appeciate and sell faster than non-solar homes
- An average solar home sale (with a 3.1 kW solar system) may bring in $17,000 more
- Going solar is a sound investment, allowing homeowners to take advantage of net metering and a variety of other solar tax incentives