According to statistics published on the Ecowatch website, a residential solar installation can cost anything from $10,878 to $21,756 nowadays. That’s a lot of money for the average homeowner to pay upfront.
Many homeowners indeed feel put off by the high cost of solar at first, but that’s only until they discover the benefits of this renewable energy source.
Not only will solar panels save you money on your electricity bills every month, but they also increase the value of your home. Keep reading to find out how.
How Much Value Do Solar Panels Add to Your Home?
It’s easy to imagine why solar energy might increase your home’s value, but the big question on homeowners’ minds is how much extra value they might gain.
Several experts have offered input in this regard:
National Renewable Energy Laboratory (NREL)
The NREL maintains that long-term energy savings have a substantial impact on home values. They calculate that your home value increases by at least $20 for every dollar you save on your energy bills.
Thus, if your solar system saves you $500 a year, your property value increases by around $10,000.
Studies and Reports
The annual Zillow housing trends report for 2021 shows that 67% of homebuyers view energy efficiency as important when considering a new home.
The huge interest in energy-efficient homes means sellers can expect higher sales prices for their homes.
According to the US Department of Energy’s Berkeley Lab study, buyers are willing to pay up to $15,000 more for a solar-powered home.
In certain markets, buyers will pay even more. For instance, in New York, homes with solar installations fetch around $23,989 more than their peers.
See this webpage for more information about solar benefits and why solar energy is such a popular choice for homebuyers.
Factors Affecting Your Property Value
Despite the positive results above, a solar system doesn’t always guarantee you’ll get top dollar for your home. Many other factors come into play when valuing solar-powered homes.
Location, Location, Location
Electricity rates vary widely from region to region. So, it makes sense that your home will attract more value from solar panels if you live in an area with very high electricity rates.
Homeowners only stand to benefit from solar if they’re paying more than $117 per month for their electricity bills. In areas with low energy rates, many prospective buyers might not benefit much from solar.
Due to this, solar-powered homes in expensive areas like California, Texas, Connecticut, and New York attract higher prices than those located elsewhere.
States With Growing Solar Markets
Solar power is more popular in some states than in others. Expensive areas like the above are obvious contenders for high home prices due to solar, but there are others.
Other promising solar markets include:
- North Carolina
- New Jersey
If you live in another state, you might not experience a huge increase in your home’s value when you install solar. You’ll still enjoy savings on your electricity bill, though.
Solar Panel Ownership
There are several alternatives available when it comes to solar power. You’ll only benefit from the added home value if you own the solar panels installed on your roof.
You can’t legally include the value of your solar panels in your home sale unless you own them. So, unless you paid for your solar panels upfront, or took a solar loan, they won’t increase your home’s value.
Despite this, solar panels will still increase your home’s appeal to buyers. Many prospective buyers will happily take over your solar lease or PPA so they can also benefit from savings.
This aspect may still give you the edge in a competitive real estate market and can help you sell your home faster.
With a solar lease, your solar provider is the legal owner of your solar system. If the new owner doesn’t want to continue with this arrangement, you may need to buy out the lease before you can sell your home.
Solar System Condition
The latest, most up-to-date solar installations add the most value to your home. That’s simply because aging solar panels have less time left in their 20-year lifespan, not because they’re less efficient.
Prospective buyers won’t pay as much for a home when they know they’ll need to replace the solar panels in a few years.
Installing high-quality solar panels with long warranties and keeping them well-maintained is the best way to ensure they add value to your home for as long as possible.
Property Tax Benefits
Although solar panels increase home values almost across the board, you don’t pay extra property tax in 36 of the 52 states when you install solar panels. This is another attractive drawcard for prospective buyers.
When homebuyers invest in a solar-powered home, they get the benefit of owning a highly valued property without the associated tax burden.
These tax exemptions vary depending on each state, with some offering as much as a 100% discount, while others limit the number of years applicable to this perk.
A Brighter Future
Solar panels offer a win-win solution for homeowners everywhere and they’re also an excellent solution to alleviate global warming.
If you’re an environmentally conscious homeowner, get in touch with a solar installer and make a difference today. You’ll enjoy savings on your electricity bill, increased home value, and the knowledge that you’re helping ensure a healthier planet. Would you like some more of the best home design and lifestyle ideas? Browse our blog for more inspiration regarding the most rewarding home improvement projects.
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