Boost Your Home's Value and Sell Faster: The Benefits of Going Solar
Despite the booming market for solar energy, selling solar systems isn't always straightforward. Many prospective buyers have concerns about return on investment (ROI), financing options, and the impact on their home’s aesthetics and value. Understanding and communicating the tangible benefits of installing solar can make a significant difference in convincing potential customers to make the switch.
Solar Increases Home Value
One of the most compelling reasons to invest in solar is the potential increase in your home’s value. Multiple studies support this claim:
- Lawrence Berkeley National Laboratory (LBNL): A 2015 study analyzed 22,000 home sales across 8 states, including 4,000 homes with PV systems, from 2002 to 2013. The findings revealed that each watt of solar added an average of $4 to the home’s value in California and $3 per watt elsewhere. This translated to an average increase of $20,000 in California and $15,000 in other states for an average system size of 5 kW.
- Zillow (2019): This study controlled for factors like size, location, and age and found that homes with solar sold for an average of 4.1% more than those without. This confirms that, despite market fluctuations, solar panels remain a valuable asset.
Faster Home Sales
Not only do homes with solar sell for more, but they can also sell faster:
- National Renewable Energy Laboratory (NREL): A 2006 study of energy-efficient homes in California found that those with PV systems sold 20% faster and for 17% more. Buyers preferred homes with pre-installed solar systems, indicating that the presence of solar can be a strong selling point.
- Zillow: Further research indicates that while homes with solar might sell slightly slower (by about 2 days on average), the increasing demand for energy-efficient features suggests that this trend might shift as energy costs rise and environmental awareness grows.
Recouping Costs
The initial cost of installing solar panels can be offset by the increase in home value and energy savings:
- Zillow (2019): The 4.1% increase in selling price equates to about $9,300 for a median-valued home in the US. Considering the average cost of a 6-kW system is around $12,300 after federal tax credits, homeowners can expect to recoup most of their investment upon selling their home.
Other Considerations
Several factors can influence the added value of a solar installation:
- Regional Markets and Electricity Costs: Higher electricity rates and robust solar incentive programs can enhance the value of a home with solar. For instance, homes in areas like Long Island, with high energy costs, are more attractive to buyers due to the substantial savings on electricity bills.
- Appraisal Practices: Appraisers must recognize the value of solar systems. Homeowners should ensure that their PV system is factored into the home’s appraisal, guided by standards from the Federal Housing Authority (FHA) and Fannie Mae.
- System Ownership: The benefits discussed primarily apply to owned PV systems, not those financed through Power Purchase Agreements (PPAs) or leases. Leased systems can complicate home sales due to the need for contract transfers.
FAQs
Does a solar system increase the value of a home?
Yes, studies by Berkeley Labs and Zillow indicate that solar systems can increase home value by 4% or more, depending on various factors.
Does a solar system make it easier to sell a home?
The evidence is mixed. While energy-efficient features are important to many buyers, homes with solar may sell slightly slower. However, the overall demand for green homes is increasing.
Does the increase in home value vary by region?
Yes, the increase can vary widely based on regional energy rates and incentives. Some areas see significantly higher premiums for homes with solar.
Are there other solar benefits to consider?
Yes, in addition to increased home value, solar systems offer energy bill savings and greater cost certainty for homeowners.