You may already know that adding solar panels helps you save on electricity bills and helps the environment but did you realize how much it can increase your home’s value?
The National Bureau of Economic Research (NBER) recently released an analysis that found solar panels add between 3 percent and 4 percent to the value of a home. During the past year, homes with solar systems sold for an average of 4.1% more than comparable homes without solar power. But the news gets even better…As the demand for solar energy increases, it becomes critical that the value of solar arrays be determined as an asset for home sales. In 2015, Berkeley Labs showed that a home with a host-owned solar array increased the value of that home. [1]
The Study
The study of how solar energy impacts the resale value of homes we lead by the U.S. Department of Energy in conjunction with a team of researchers that spanned many organizations.
The study looked at the most significant valuation of homes to date, with 22,000 home sales and appraisals. The time frame was 2002-2013, which spans the rise, fall, and recovery of housing markets.
Results
Host-owned Solar is an important aspect. It means the homeowner owns the solar array and the energy it produces. The study showed home sales were higher with host-owned solar arrays. In addition, homebuyers were willing to pay more for homes with host-owned solar arrays to the tune of about $4 per watt generated by that system. On average, that adds up to about $15,000 for the standard-sized P.V. system.
Outcomes
The study showed that home values with host-owned systems increased in value by about $4 per watt of that home’s system. On average, you are looking at around a $15,000 increase in value for a solar P.V. system of average size.
In Today’s Market
It is clear that solar increases a home’s value and more so today despite recent studies. The current Texas energy crisis illustrates the power of solar to consumers. In that crisis, millions lost power when the traditional energy grid failed, and there was no opportunity for outside power sources to help. Texas has a grid that is isolated.
The lesson for Texas is that solar works, even when the traditional grid fails. A home tied to the grid and powered by solar energy could run heaters, electric ranges, microwave ovens, and other essentials when houses that were only connected to the grid had no power at all.
The current homeowner is looking carefully at sustainable energy and home features. The disruption of 2020 and its lingering presence in 2021 also make solar energy a viable asset for home buyers. That value varies by market. In California, it equaled about a 2.7% increase in home prices, whereas in N.Y., that asset increased home values by 5.4% or nearly $24K — according to data from Zillow. [2].
Resources and Further Reading
[1] Berkeley Lab Illuminates Price Premiums for U.S. Solar Home Sales
