Do Solar Panels Add Value To Your Home?

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Without a doubt, solar panels are a “must-have” for any environmentally conscious homeowner. Furthermore, the savings on your utility bill means more money in your wallet.

Do solar panels add value to your home? The answer is yes.

In addition to lowering your carbon footprint and saving money, home solar can substantially increase the value of your home if you ever decide to put it on the market. If you are debating whether going solar is the right choice for you, it may delight you to learn that solar panels have another big benefit in addition to saving money as you take a step towards clean energy independence.

Do Solar Panels Add Value To Your Home?

Solar panels increase the value of your property, making your installation truly a smart investment. On the other hand, it makes a big difference if the solar panels are owned or leased. Be careful when choosing how you finance your installation because it might be difficult to sell your home if you have signed a lease agreement or have outstanding payments on the solar loan

Let’s take a closer look at exactly how much value can be added to your property with rooftop solar.

How Do Solar Panels Increase Home Value?

If you’re thinking about selling your solar home, you’d enter the market as an advantageous as buyers are looking for homes that can save energy and money while being gentle on the environment.

That being said, your property will be more attractive to potential buyers.  

Moreover, from the perspective of a home buyer, you’ll immediately be reaping rewards on your energy bill without having to go through the hassle of installing solar panels in the first place.

How Much Will Solar Panels Boost Your Home’s Value?

Several studies show that installing solar panels can significantly increase the value of your home. Homes with solar panels sell for more money compared to similar homes in the neighborhood.

A recent National Renewable Energy Laboratory (NREL) study shows that homes with solar panels sell 20% faster and for 17% more than non-solar homes. 

Solar Home Value Increase Reports

In addition, The Zillow report says solar panels increase property value by 4.1% across the U.S., which is  $9,274 on average home prices. 

According to the Zillow study, added value varies by region 

  • New York state (5.4%, or a $23,989 premium on a $440,400 home)
  • San Francisco (4.4%, or a $41,658 premium on a $955,200 home) 
  • Orlando, Florida (4.6%, or a $10,994 premium on a $368,300 home)

The U.S. Green Building Council statistical analysis of home value showed that homes with solar sell for 8% more on average compared to similar homes without it.

Furthermore, Lawrence Berkeley National Laboratory released a study showing that homebuyers are willing to pay a premium of $15,000 to $20,000 for a home with an average sized solar panel system on the roof. 

An example of a home with 5kW system

Let’s take for an example of a home with an owned 5 kW system. 

The average size of a home solar panel system in California is 5 kilowatts (kW). If a home has a system of this size, it can generate around 5,000 watts of power at peak performance. According to the Lawrence Berkeley National Laboratories (LBNL) report, each watt of solar adds $4 of value while in other parts of the USA, about $3 of value is added per watt. Therefore, a homeowner in California can expect a $20,000 premium (considering an average sized system would bring an increase of $4 x 5,000 W). 

Simply put, if a  2,500 square foot single-family home has a market value of $250,000, an identical home with a 5kW solar panel system can go for $270,000.

Of course, all of the above depends on the home location, the real-estate market and assumes that you already own the solar system.  If you have a leased system, there are many environmental and economic advantages, but it can create unique challenges when reselling the home.

All things considered, how much value can solar panels add to a home?

That depends on many factors such as:

  • Location of your home
  • The price of electricity in your area
  • The size, condition and starting value of your home
  • The age of the solar panel system
  • How much energy the system can save
  • Does your utility offer net-metering

Do solar panels increase property value?

One thing is for sure, solar panels can add value to your home in any case and are worth the investment.

First of all, you can benefit from electricity bill savings over the 25 to 30 year lifespan of your PV system. Even if you never sell your home, your installation fully pays for itself many times over as utility rates go up. As utility rates increase, electricity bill savings increase significantly over time. 

Secondly, if you are buying a house with a fully owned solar system you can expect to enjoy some return on investment as of day 1 since solar panels can bring savings ranging from $12 to $20 per kW.

To sum up, it is obvious that, with the right size solar installation, solar panels can add value to your home and you can benefit from investing in it from day one.

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