Solar energy is the gift that keeps on giving. But one of the coolest (and least celebrated) aspects of this technology is how installing PV panels can increase the property value of your home or business.
We’ve actually covered this topic before (here. But the numbers are truly impressive.
According to one study by the National Renewable Energy Laboratory (NREL), installing photovoltaic (PV) panels can have a huge impact on the resale value of your home. For every $1 in annual electricity bill savings, the total value of your home can increase by as much as $20.
But that study was several years ago. And now we have new numbers – stats that are even more impressive.
The Department of Energy’s Berkeley Lab published a recent report entitled, “Selling into the Sun: Price Premium Analysis of a Multistate Data Set of PV Homes.” It’s not a very exciting title, but the information within this report is very exciting.
According to Berkeley Lab’s findings, residential resale prices increase an average of $4 per watt of PV solar installed. And across the board, average home prices go up by about $15,000.
But the value of your home can easily increase by $20,000 or more (assuming you have a standard 5 kW solar PV installation).
What Makes This Solar Power Study So Unique?
The link between solar energy and increased property values isn’t new. So why is this Department of Energy report so important?
Well, this was a massive study. According to Berkeley Lab, it contains “the most authoritative estimates to date of price premiums for US homes with PV systems.”
The entire research covered 22,000 homes across 8 states over the course of 15 years (1999 to 2013). And in addition to Berkeley Lab, the study also included researchers from Sandia National Laboratories and several high profile universities.
In fact, this project was the largest-ever of its kind. And now realtors, homeowners, and PV installers have hard & fast numbers to use when assessing future projects and home deals.
What Does This Solar Power Report Mean for You?
If you live in California, this report offers nothing but good news.
And here’s why.
The average cost of a solar PV installation in California is about $10,000 (after incentives). While you live in your home, your solar installation reduces your electricity bill – sometimes to $0 a month. In fact, you’ll save so much money that you can easily recoup your upfront investment within 4 to 6 years.
And that’s assuming you never try to sell your home.
But if you do decide to move, you’ll also receive an extra bonus of $15,000 – $20,000.
You’re not simply breaking even. You’re actually generating thousands of dollars in pure profit. And you’re able to do this while protecting the environment and reducing your carbon footprint.
Even more impressive, both the NREL and Berkeley Lab studies were based on historic utility rates. But as grid prices continue to rise, both the potential savings and resale value of your home also go up.
Does Solar Always Increase Property Values?
It’s important to remember that not all solar PV installations are created equally.
In order to benefit from property value increases, you need to own your system (via cash or solar loans). If you choose to lease your PV panels, the property value of your home or business actually goes down.
And here’s why.
A solar lease is a long-term rental contract. And if you decide to sell your home in the future, the next buyer must take over the remaining portion of that contract. In other words, “rented” solar panels create a liability on your rooftop – one that makes the value of your property go down – not up.
To learn more about solar power and property value increases, contact us today for a free consultation.