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Improving one’s home is a constant concern for homeowners, answering the question, “How do I make my home cater to my family’s needs?” A key factor is do solar panels increase home value.
Some of these improvements are functional, but many are just aesthetic upgrades (i.e a good garden or lawn.) These help increase the value of one’s home property. But what many don’t add to this list is adding a solar energy system to their home.
Yes, your property value does increase when installing your home battery backup. It is not an obvious choice at first, but let's explore below on why you should consider including it in your home improvement project.
How much value can your home power backup add to your home?
According to a 2008 study by The National Renewable Energy Laboratory or the NREL. It discovered that for every $1 decrease in annual utility bills, a home’s value increases by at least $20. If your Nature’s Generator is able to save you $500 a year that means an additional $10,000 to your home value. This supports the idea that do solar panels increase home value, absolutely, as long as your system reduces utility costs.
The Department of Energy’s Lawrence Berkeley National Laboratory conducted the largest study of solar homes from 2002 - 2013. Their finding showed that buyers from six out of eight states where they did the study aremore than willing to pay more ($15,000) for homes with solar panels than those with no solar panels.
Years later, Zillow, which is the most-visited real estate website in the country, shared that 67% of potential home buyers consider energy efficiency to be quite an important feature to have in a home. This was the result of a study they made in 2019. It meant homes with solar panels sell faster at 4% than homes with no solar panels.
Depending on the location, buyers are willing to pay an average of 4.1% or $9,274 more for homes with solar energy systems.
It can go higher depending on the location. For example, in New York, solar homes can be sold at 5.4% more, which is about $23,989.
What factors affect the value of your solar-powered home?
Having your solar power doesn’t guarantee an increase in home property value. Various factors are at play that may affect the value, and some of them are listed below:
- Location - solar panels can last up to 35 years, so depending on where you live, listed below are geographic variants that increase your home value:
- Electricity Rates - Some states have a higher electricity bill than others. The average U.S. residential electric bill is $117,46/month, according to the Energy Information Administration. If your electric bill is lower than this, switching to solar power may not be worth it. But if you live in California, Hawaii, Texas, Connecticut, and New York, you can get your money’s worth more as it can offset the higher utility bill their residents need to pay.
- Local Solar Market - If you’re living in a state that has a growing solar market and has laws that incentivize homeowners with solar energy systems, then you have the best potential to achieve a higher property value.
California, Texas, Florida, North Carolina, Arizona, Nevada, Georgia, New Jersey, Virginia, and Massachusetts are the top 10 best solar markets to be according to The Solar Energy Industries Association (SEIA).
- The Condition and Age - Solar energy systems have a long lifespan as long as they are well maintained. They can last from 25-40 years. If the system is old or not well maintained, you may have to spend more for upgrades or repairs because they don’t really benefit buyers.
If you’re selling a newer solar system, the amount you can add up can be higher as it can give more years in usage for its new owners.
- Leased Vs. Owned Solar System - This means your solar system is either connected to the local power grid, which is likely a leased solar system that is transferable to the buyer, or you own and build the system yourself, such as the Nature’s Generator.
How to calculate your home value increase?
Following the two studies that were mentioned above, provided below are estimated based on how much your home value may increase if you have a 6kW solar panel system with a $120 energy bill:
- Lawrence Berkeley Labs Formula - That would be 6kW multiplied by $5,000, equivalent to an increase of $30,000.
- Zillow - If your property has a Zestimate of $600.000, multiply it by 4%, then that’s an added $24,000.
With these two numbers in mind, your ballpark price increase is between $24,000 to $30,000.
Conclusion
Improving your home by installing a solar power system as a backup may not seem like the obvious choice for increasing its value. But why not consider it? Not only does it help increase property value, but it also reduces your electric bill and carbon footprint. So, do solar panels increase home value? Absolutely, they do!
The value depends on your location, the age, and condition of the system, and if you own the system or not. So, be sure to do some research first. Connect with a trusted company to decide what kind of system to have. You may also ask your local real estate agents what’s the trend in the area when it comes to renewable energy in residential energy. These will help you in creating a well-informed decision.
* We want to give credit where credit is due. Professional writer, Cris Ilao, contributed research and content to this blog titled: Do Solar Panels Increase Home Value Thank you, Cris, for your contributions!
