Solar energy has many benefits. It’s clean, sustainable, and can help you save money on your energy bills. And here’s one added benefit people don’t usually think about: solar can also increase your home’s value.
In 2011, the National Bureau of Economic Research (NBER) concluded a study of the impact of solar energy systems on homes in and around San Diego and Sacramento. The research team found that an average residential solar energy system added three to four percent – or around $22,500 – to the average home’s value. They also found that the cost of installing the system was less than the appreciation in the home’s price due to the presence of solar panels.
Another study released in 2011 by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (LBNL) looked at California homes from 2000 to 2009, and found that “California homes with PV systems have sold for a premium over comparable homes without PV systems.” According to the researchers, most homes increased by an average of $5.50 per installed watt of solar capacity. And like the NBER’s study, the value added by the solar system exceeded the costs of installing it.
A follow-up study conducted by LBNL and Sandia National Laboratories confirmed the results of the prior studies. Published in 2015, the team’s report drew on data from 22,000 home sales in eight states from 1999 to 2013. The researchers found that “home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets.” According to the research team, home prices increased by around $4 per installed watt or a premium of $15,000 for a 3.6-kilowatt solar system.
In other words, installing solar on your home is, financially speaking, a good move – but only if you own the system. If you’re leasing it, on the other hand, you may run into a few hurdles. Homeowners who have leased their solar system have to find a buyer willing to take on the lease. And, the company that leased and installed the equipment has to renegotiate and approve the new homebuyer.
Interested in learning more about lease vs. own? Read here
Selling a home with solar? It’s not always easy.
Keep in mind: the process of selling a home outfitted with solar can be tough even when you own the system. Since solar homes are still relatively rare, some home appraisers don’t know how to accurately factor the value added by solar into their appraisals. And realtors might not be educated on the many benefits of solar power, which could make it difficult for them to present it as a selling point. And some home buyers might find homes topped with traditional solar panels unsightly.
But while it’s a turn-off for some, it can be a boon to others. So be sure work with your realtor and provide them with as much information as possible when selling. High-efficiency solar systems, plus new products like Enphase storage, can go a long way to attracting customers.
What if you’re a homeowner who doesn’t want to sell your system?
While it’s possible to remove the equipment from your current location and place them on your new home, this is typically not recommended, since the size, placement, and number of panels and microinverters on a home are carefully selected to meet its unique needs. Even if the home you’ll be moving into will have similar energy requirements and a similar rooftop, it’s best to leave the system for the next homeowner and purchase a new one for your new home.
Thinking of installing solar to boost your home’s value? Consider the market first.
Some homeowners might consider installing a solar system merely to boost their home’s sale value. While that could work, you’ll need to consider your market. The research cited above also indicates that solar tends to make home values rise the most in areas with high-value homes and a higher proportion of college-educated people, since that demographic tends to be more environmentally conscious. That usually means you’ll get the most bang for your buck by installing a system on a home located in or around a metropolitan area. And if you’re looking to sell in hurry, you might not want to wait to install a system just to increase the sale price, since the installation process can take two to three months.
If you’re a homebuyer who is interested in going solar, there’s no reason not to consider a home that already has a functioning solar system installed and paid off. Just remember: the newer the system, the higher the premium it will add to the house. But even homes outfitted with older systems can be a good investment. While panels are typically warrantied for 25 years, many solar panels are capable of producing energy for 30 years or more. And, Enphase microinverters come with an industry-leading 25-year warranty.
And finally, as with any other home, consider location when buying. Homeowners in the sunny South and Southwest will be able to reap greater savings on their solar homes than someone living at a higher latitude.