Most solar companies throughout San Diego promote electricity bill savings as the largest single benefit of installing a new photovoltaic (PV) system.
And this makes perfect sense.
With a large enough solar installation, you can reduce your monthly utility bills to $0 – i.e. you pay absolutely nothing to SDG&E, even as it continues raising its electricity rates.
But there are other amazing benefits of installing PV panels – benefits that many solar companies in San Diego sometimes overlook (especially those that push for solar leases and PPAs).
Increased property value is one of our favorite “hidden” benefits. Let’s review how this works.
San Diego Solar Installations and Property Values
Any major improvements you make to your home are likely to increase the resale value of your property, whether we’re talking about kitchen remodeling or bathroom retiling.
But of all the home improvements you could make, solar installations deliver some of the highest returns – for 2 important reasons:
1. Solar Homes Sell Faster
According to the U.S. Department of Energy’s Office of Energy Efficiency & Renewable Energy, homes with solar installations sell twice as quickly as those that don’t. This means fewer listing fees, fewer opportunity costs, and less uncertainty.
2. Solar Homes Sell for More
According to the National Renewable Energy Laboratory (NREL), solar homes sell for more money than their non-solar counterparts. For every $1 in annual utility bill savings, your property’s value rises about $20.
Just to put that in perspective – if your current SDG&E bill is $100 a month, and you install a 4.5kW solar PV system, your property’s value would increase about $10K.
And as we’ve discussed in an earlier post, the average cost of a residential solar PV system in California is about $10K. In other words, the increase in property value literally pays for the installation.
But it gets better than that.
Most homes throughout San Diego pay a lot more than $100 a month in utility bills. Some homeowners pay $200, $300, or even $500 a month. So property value increases for these customers would be way more than $10K.
And as SDG&E continues raising its electricity rates year after year, your solar investment becomes even more profitable because:
- you enjoy higher monthly electricity bill savings
- your home’s value rises proportionally
San Diego Property Values and Solar Leases
The lucrative relationship between property values and solar installations only works if you actually own the system.
San Diego homeowners who lease their solar installations actually see a dip in property values. They’ve created a debt liability that future homebuyers may not want to assume.
This is just one of many reasons why we caution against hiring San Diego solar companies that push exclusively for solar leases and PPAs. Under certain circumstances, leasing makes good business sense. But you potentially surrender many of the great financial benefits that come with true solar installation ownership.
To learn more about solar installations, leases, financing, or property value, send us a quick email.
All consultations are 100% free, and we’d be happy to answer any questions you might have.