How Solar Panels Add Value to Your Home
Have high installation fees been scaring you from solar? Maybe it’s time to take a second look.
The U.S. Department of Energy’s Lawrence Berkeley Laboratory recently released a report that lends peace of mind to homeowners ready to take the solar plunge. The report details a study comparing solar with non-solar home sales over the course of 15 years.
Its conclusion? By installing solar, you can expect to raise the value of your home by an average of $15,000, or about $4 per installed kilowatt — about the same as the average cost of installing residential solar.
Why the Berkeley report is significant
This new report differs significantly from previous studies in a number of ways:
First, is the sheer scope of the study. 22,822 home sales were analyzed, including 18,871 non-solar homes and 3,951 homes with solar photovoltaic (PV) systems installed. Approximately one-third of the homes were new construction. None of the home sales exceeded $900,000.
Also significant is that the home sales occurred across a wide geographic range. Many previous studies of solar home value have been restricted to limited areas or regions — most often California. This study drew data from eight states, including California, Connecticut, Florida, Massachusetts, Maryland, North Carolina, New York and Pennsylvania. The fact that its findings were consistent across the board indicates that solar home sales everywhere are likely to follow a similar pattern.
Finally, the Berkeley study took place over a long enough period of time to dispel any doubts about the staying power of solar home value. Spanning the years 2002–2013, the data proved that the value of solar remains consistent, regardless of economic fluctuations.
Takeaway points for homeowners
If you are considering investing in solar, this study has some important implications. Here are a few to consider:
Owning vs. leasing a solar system.
While the study did not analyze homes with leased solar systems, it does counteract the common fear homeowners have of not re-gaining their investment should they decide to sell their home. In fact, some analysts have suggested that leasing a solar system could be far less desirable from a buyer’s point of view.
The price of solar continues to drop.
The U.S. Department of Energy’s most recent Solar Pricing Trends report indicates that the cost of installing PV has declined steadily for more than half a decade. With solar home resale values remaining steady, solar is only becoming a more solid investment with each passing year.
Layers of value.
Most people add solar to their home because they want to enjoy the energy saving ROI as well as do the right thing for the planet. A typical 5-killowat solar PV system can easily see an ROI of 20 percent. Even accounting for depreciation, this means that if you sell in five years, you can readily get your initial investment back and sell your home at a higher price than it would without solar.
In conclusion, it’s now safe to say that solar is a solid investment that will stand the test of time, regardless of whether you plan to stay in your home or sell. In fact, as news of this report spreads, it could help convince lenders to make it even easier to acquire solar. Why not send a copy to your banker or real estate agent today?
Ryan McNeil is the president of Renewable Energy Corporation, a Mid-Atlantic residential solar energy company that is committed to installing quality, American-made solar panels.