Does Solar Increase Home Value?

There’s a lot of misinformation on the internet about solar panels, including how much they cost, how much money you can expect to save, whether they’re hard or easy to maintain, etc. There are many claims that solar panels can increase your home’s value. When we look at our customer base, for whom we’ve installed more than 2000 systems in the last 19 years, this has certainly been true. But we were interested in whether it’s true in a broader context, so we went digging. In short, yes. Solar panels do increase your home’s value! But why, and how much? Understanding How Solar Panels Add Value to a Home  Understanding How Solar Panels Add Value to a Home
Here’s the high-level summary: Solar panels increase home value by directly reducing utility bills. Solar panels generate electricity for the home they’re installed on, reducing the homeowner’s reliance on grid-supplied power and significantly saving energy costs. New homeowners who move in save money over time because they either won’t have a utility bill or will pay a significantly reduced one. Solar-equipped homes are especially attractive to potential buyers in areas with high electricity rates. When someone buys a solar-equipped home, they know they’ll save money in the long run because they will either have no electricity bill or a significantly reduced electricity bill that never goes up. The Numbers: How Much Does Solar Increase Home Value? The Numbers: How Much Does Solar Increase Home Value?
The truth is, there’s not a lot of reliable data on this question because solar is so region-specific. Many of the peer-reviewed studies that are often referenced were conducted years ago. The best current data we’ve found comes from large real estate platforms like Rocket Homes and Zillow, who’ve analyzed their databases. The data we’ve found suggests that solar systems raise a home’s value. Here are some of the most compelling sources: The Department of Energy’s Berkeley Lab conducted a 12-year study across eight states on how much solar energy raised home value on average and discovered that it was $15,000. According to data from Rocket Homes, homes with solar power are 24.7% more likely to sell over the asking price and spend 13.3% less time on the market. Zillow crunched the numbers in their database and found that not only do homes with solar panels sell for 4.1% more, but 80% of modern homebuyers say that energy efficiency is important to them. NREL (National Renewable Energy Laboratory), based on data that they’ve highlighted from the Appraisal Journal, claim that home value increases by $20 for every $1 saved annually in utility bills. This means that if a solar system saves a homeowner $500 annually, it could add up to $10,000 to the value of a home. Not only do homes with solar panels increase in value, but investing in a solar system also means that your home will spend less time on the market when you’re ready to move! It’s important to take the information above with a grain of salt. Solar systems are built on a home-by-home basis, and the value added for one homeowner may not be reflective for someone in a different region. Regional Variations in Solar Valuation Regional Variations in Solar Valuation
Just like the value of homes varies from state to state and is higher in more sought-after areas, a solar system will be slightly more or less valuable depending on your region. If you have high local electricity rates, your system will likely add more value to your home. However, if your roof has a limited amount of sun exposure and you have to build a larger solar system to compensate, your system may not bring you an outsized home valuation compared to its upfront cost. There’s a free online tool called PV Value that you can use to estimate how much equity your solar system will add to your home. Energy.gov endorses it, and it’s regularly updated. This calculator requires specific technical information, so if you’re not well-versed in solar technology, it’s best to consult a local installer before filling it out yourself. Some of the information that PV Value will ask you for: Your address Your system size How long your modules are warrantied for Your rate of degradation The azimuth and tilt of your solar array Much, much more You can use it for proposed and already existing systems. If you have a system on your roof that’s been there for twenty years and knows the specs, you can also use it to estimate system value! Cost vs. Value: Analyzing an Investment in Solar Power Cost vs. Value: Analyzing an Investment in Solar Power
Installing solar panels is often not as expensive as many people think. Because of the Inflation Reduction Act, when you install a rooftop solar system, you’ll receive a 30% federal tax credit on the system’s total cost. Depending on your state, there are many potential benefits you might receive if you choose to go solar, including: Net metering SRECs State-level tax credits and rebates We encourage you to consult a local installer to find the best incentives for your unique home. At Exact Solar, we build systems in Pennsylvania and New Jersey. If you’re curious about the solar incentives in either state, we’ve written a guide for each: Your Guide to Pennsylvania Home Solar in 2024 Your Guide to New Jersey Home Solar in 2024 Selling a Solar Home Selling a Solar Home
You can find our in-depth guide to buying and selling solar homes here. Here’s an excerpt: “When selling a house with a solar system that you have paid off and own, you should directly introduce the buyer to your solar installer to handle the transfer of any contracts, service agreements, warranties, and maintenance. When you initially purchase your solar system, it is crucial to file away all of your paperwork regarding the purchase for when you sell your home. New homeowners will want this information for their records and to ensure that they are properly caring for their new system. Any information about wattage, warranty, who bought the system from, and financial paperwork will be important for the new owners to have.” Ready to learn more? The information on the internet can be overwhelming, and you’ll often find contradictory perspectives. If you’re ready to get the best information for your unique home, we encourage you to book a free consultation with Exact Solar!