The short answer is yes! Installing solar panels can significantly increase your home’s market value.
Per the National Renewable Energy Laboratory, every $1 of savings generated from a solar energy system will add $20 to your home’s market value when you decide to sell. Not only will you realize an increase in the value of your home, but a solar energy system will also help sell your home 20% faster than residences without solar panels.
Solar reduces the overall cost to operate and maintain the home because you are generating your own energy and purchasing less from the utility. Therefore, it makes common sense that solar would increase the value of your home and these studies and reports support that conclusion universally across several regions in the US, including our own.
The exact numbers vary from property to property and installation to installation, but recent research shows an average increase in resale value being $5,911 for each 1 kilowatt (kW) of solar installed. For example, in a state like California, a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home. The property value advantages of solar energy only increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home, and the value continues to increase as more solar panels are added.
Seller’s Incentives for Investing in Solar Panels
An average increase in the resale value of a home with a solar energy system equals $4,020 for each 1kW of panels installed. Your property value will increase with a scaled-up solar energy system. For example, a 5kW solar panel installation will add an average of $20,100 to a mid-sized home’s market value. In California, a 3.1 KW solar panel energy system has the potential of adding an average of $12,462 over the price of comparative homes in a middle-class neighborhood.
A home with a solar energy system will catapult your property’s value ahead of similar homes.
As a future seller, you will have huge advantages.
- Ability to demand a higher asking price for your home
- Reduce exposure time on the market listings (sell your home much faster)
- Receive close to 100% of your solar panel investment upon the sale of the home
Multiple factors determine how much of an increase you can see on your home’s market value at the time of sale. It is important to consider these factors before planning to sell your home in case any updates need to be made in order to maximize value:
- The location of the home
- The size of your solar energy system
- The age of your solar panels and inverter
- The efficiency conversion rate of your solar energy system
- Existing market value of your home
Buyer’s Incentives for Buying a Home with Solar Panels
A seller’s incentives for investing in solar panels are parlayed to a future buyer because increases to a property’s market value only go up as electricity prices rise. In turn, the buyer’s future advantages of the solar energy system rise as well.
With a customized solar panel installation, you could potentially receive a 200% return.
You will be hard-pressed to find another financial investment matching these same returns:
- Day 1 savings on your electric bill
- Yearly savings throughout the lifetime of your solar panel system – 25 to 30 years
- No down payment necessary for your solar energy system
Not only can adding solar panels to a home save energy costs and help the environment, but a recent study by Zillow Research shows that it can potentially increase a home’s value as well. During the past year, households with solar-energy systems sold for 4.1% more on average than comparable homes without solar power. For the median-valued home, that translates to an additional $9,274.
An earlier study by the National Renewable Energy Laboratory (NREL) looking at high-performance homes in California found that homes with PV systems sold 20% faster (and for 17% more) across several subdivisions built by different California builders. Their study of several hundred home sales also revealed that if a solar system was already installed and factored into the price, buyers were more likely to choose that house over others without solar. Some other interesting findings include: the aesthetics of a PV system were not identified as an obstacle to purchasing and the resale value was not damaged by the presence of a solar system.
More about A.M. Sun Solar
A.M. Sun Solar is the local leader in custom solar solutions and installations on the Central Coast. For over 15 years, A.M. Sun Solar has provided high quality, cost efficient solar energy to residences and small businesses in San Luis Obispo, Monterey and Santa Barbara counties. With a wide variety of financing solutions available, affordable pricing, custom solutions and complete installations from permit to interconnection, A.M. Sun Solar is the go to local solar company on the Central Coast.