Did you know that you can also increase your home value by setting up a solar system?
Powering your home and property through solar may be a large investment on the front-end, but it can pay for itself through lower electrical bills, federal tax credits, state incentives and by improving your home’s value.
Home improvement projects like remodeling our kitchen can increase the value of your home. Installing rooftop solar panels and a solar battery can also increase your home value and improve your investment.
How much can you increase your home’s value through solar?
Multiple studies have shown that installing a solar photovoltaic (PV) energy system can increase your home’s value. The exact number of savings depends on your local area, system ownership, electricity rates, and potential energy bill savings.
The National Renewable Energy Laboratory found the value of your home can increase by $20 for every $1 you save on electricity bills.
Zillow Group found — nationally — solar homes sold for 4.1% more than comparable homes without solar energy systems, in a 2019 study. That translates to a $9,274 premium.
In New York City, that percentage increased to 5.4% more than non-solar homes. Orlando, FL saw solar homes go for 4.6% more than non-solar homes.
Using Zillow’s findings, CNBC reported the state with the highest solar premium was New Jersey, with a 9.9% ( or $32,281) increase on the median-valued home. The next highest state reported was Pennsylvania, with a solar premium of 4.9% (or $8,589) for a median-valued home.
The U.S. Department of Energy’s Lawrence Berkeley Laboratory found home buyers in six of the eight states surveyed were willing to pay $15,000 more for homes with PV systems in a 2015 study.
Installing solar panels and a solar battery can help increase your property value, regardless of which city or state you live in — though there are careful considerations to ensure this increase.
How can solar panels increase your home value?
Installing a solar system for your home can improve its value for two reasons: future savings and consumer preferences.
Many consumers value environmental sustainability and reducing their carbon footprint, which is a great reason to install a PV system for your home. Another driving factor is saving money on energy bills, earning tax credits and having reliable electricity.
EnergySage reported homeowners can save between $20,000 to $75,000 over 25 years by going solar.
Zillow found home buyers increasingly care more about energy efficiency in purchase decision making in a 2021 study. The real-estate marketplace reported 67% of home buyers think energy efficiency is very important or extremely important.
The company also found “eco-friendly features” can help homes sell up to ten days faster than similar homes in a 2022 release.
Consumers in states with better solar incentives, more sunshine and an environmentally conscious culture may be willing to pay more for a home with a PV system and backup battery.
Factors to Consider:
Ownership vs. Lease
Solar panels and batteries are an investment. If you purchased your solar setup outright, you are able to include the solar setup in the sale of your home or property. This is the simplest, low-cost, high-profit option. However, many people choose to lease their solar setup which makes things complicated, but not overwhelming. If you find yourself in this situation, there are two main options.
The first option is a lease buyout, where you pay off the remainder of your lease and the homebuyer has the option to start their own lease under their name. The remainder of your lease may be an expensive payment to make at one time — depending on your lease length or terms.
The second option is transferring the lease over to the buyer, if the buyer is willing to take on the lease of your solar setup. This option is more cost-effective than the first option. However, the new buyer will have to qualify for the lease to take it over.
Age of Solar Setup
One of the appeals of going solar is the cost-savings it can provide homeowners. The average solar panel and battery system will last for 25 to 35 years. Homeowners with newer systems can leverage the new, eco-friendly feature if they decide to sell. However, homeowners with solar systems over ten years old may not see the energy bill savings.
There may be some wear and tear on a solar system. You need a proper warranty, coverage and maintenance to maintain the value of your solar system. Inefficient solar systems see less cost-savings and may lower demand for your home.
For homebuyers, make sure to get the full details of a home’s solar system. This includes the model, manufacturer, warranty, age and previous upgrades or repairs.
For homeowners thinking about selling, it is your responsibility to maintain your solar system in order to keep its value for the next homeowner.
Homebuyers considering solar homes might want to see lower electricity bills and reduced dependency on utility companies. Solar panels can save homeowners money during the day and solar batteries can store unused power.
Solar systems are most cost-effective in states with higher electricity rates — like California, Colorado, Connecticut, Hawaii, Massachusetts, New Jersey or New York. Solar savings are most appealing in states and cities with higher electricity rates. The demand to save money can translate to higher sale prices.
Location can matter if you want to increase your property value with solar. The sales appeal may be higher in the Sunbelt States — like Texas or Florida — for solar PV systems, where homeowners can see higher savings. The sales appeal may also be higher in states and cities with higher electricity rates.
Another factor is the existing solar industry ecosystem. Every state is different and have different laws, available solar installers and available local support. The Solar Energy Industries Association lists California, Florida, Texas, North Carolina and Arizona as the top five states with the best solar markets.
The next steps
Going solar is a great way to save the environment, save money and increase your home’s value. The great thing about the solar energy industry is that you have options. There are multiple installers that carry a variety of solar panels in your area. Enact System is here to help you find the best plan for your home and connect you with trusted installers. You give us your information, we find you options, you choose the best one for you and we take care of the rest. It’s that easy. Schedule a conversation with one of our energy experts and we can help you install and monitor your solar setup. Want to learn more about what Enact Systems can do for you? Check out how we accelerate clean energy.
Written by David Bartle, content writer
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