Adding Solar Can Increase Your Home Value
Did you know that installing a home solar system is an economic decision that can potentially improve your family’s financial position?
Home solar not only can reduce or eliminate your electric bill, adding a photovoltaic (PV) solar system to a house is almost always a good real estate investment and may contribute to increasing home values by 3 to 4 percent. The combined benefit of higher resale value and lifetime energy savings makes solar a compelling financial investment.
One study by Lawrence Berkeley National Laboratory , which analyzed the sale of nearly 4,000 homes with solar in eight states, determined that some buyers, particularly those in California, are willing to pay a premium of $12,000-$15,000 for a home with an average-sized, resident-owned solar array.1 That illustrates how important it is for buyers and sellers to familiarize themselves with how solar affects property values.
In states with a booming solar industry, such as California, which has a more mature solar real estate market, local real estate agents, lenders, and appraisers are more likely to understand the value of solar, and there are plenty of comparable home sales that can guide accurate pricing decisions.
Other regions are still learning the benefits of solar. Renee Baker, a real estate agent in Las Cruces, New Mexico, said that about six years ago, many real estate professionals in the area did not understand how solar adds to the value of a house.
“The problem was that a lot of them didn’t know what they didn’t know,” Baker said.
But that has changed as more solar houses go on the market. The Solar Energy Industries Association (SEIA) reports that there are more than 1.5 million residential solar systems in the U.S. and that a new one is added roughly every 90 seconds. So, it follows that real estate professionals nationwide are beginning to gain experience with marketing the solar features of a house. They also have better tools and training to help them with solar real estate deals, including third-party groups that calculate the potential value of a solar system, currently and over its lifetime.
SunPro Solar home solar systems are more powerful, more efficient and degrade at a slower rate than conventional solar. As a result, SunPower systems generate up to 60 percent more energy over their first 25 years. If tools for measuring resale value base their assumptions on actual energy output and reliability, SunPower systems are well positioned to add additional value to your home. Moreover, SunPower has the strongest combined product and power warranty in solar. In a blog post by Savenia Labs, it was noted that there’s a relationship between comprehensive solar system warranties and higher resale values.
BEST WAY TO ASSESS SOLAR HOME VALUES
Real estate agent Baker said as local solar home markets mature, real estate agents are able to look up more comps. They are the best way to assess the value of any house, solar or otherwise.
Baker, who has handled about 16 solar home sales, said prospective home buyers have two major concerns: They want to make sure there’s documentation that the installation was done properly (information that any reputable solar dealer will provide) and they want proof that the system is saving money on electric bills.
“So, if you’ve got that documentation, you can show that,” Baker said. “You can show what the electric bills look like, and that’s the proof in the pudding.”
Using this “income approach” is recommended by the recent SEIA report, “How Owning a Solar System Impacts My Home Value: A Guide to Valuing Residential Solar Energy Systems.”
It spells out the various methods for assessing the value of solar homes and explains why the income approach provides the most accurate view for prospective buyers.
The report also provides several resources, including solar calculators, and lists organizations that can help solar homeowners. It will be updated periodically with additional tools as the U.S. solar market continues to grow and become a more integral part of the country’s real estate landscape.
Contact SunPro Solar or call us at (951) 678-7733 to find out more
1 Source: Hoen, B., Adomatis, S., Jackson, T., Graff-Zivin, J., Thayer, M., Klise, G., & Wiser, R. (2015). Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes. Based on analysis of home sales with & without solar energy systems in CA, CT, FL, MA, MD, NC, NY and PA from 1999 to 2013. Actual impact on home values will vary.
This post originally appeared on the SunPower Business Feed.