Using renewable energy sources is good for the environment. Solar power is one of the main sources of renewable energy, and it is widely available too. Hence, it’s not surprising that many homeowners today are shifting to solar panels to their homes to do their part and contribute to the conservation of the planet.
In addition to altruistic or environmental reasons, going solar also has its economic benefits. For one thing, you can save on electricity bills when you have solar power at home. But for many homeowners and investors, there’s a more pressing concern that’s even more important than cutting utility costs. Many are wondering if having solar panels can increase a home’s value?
According to a study conducted from 1999 to 2013 by the Lawrence Berkeley National Laboratory, which is managed by the University of California under the auspices of the U.S. Department of Energy, homebuyers across various states have been willing to pay a premium for properties with their own photovoltaic (PV) systems. That premium amounts to “about $4 per watt of PV installed.”
So, if you’re still wondering if installing solar energy panels on your rooftop will raise the value of your property, the answer is a resounding yes. There’s no denying that going green with solar can bring you more greenbacks when you sell your property. With that out of the way, there are other questions that homeowners like you must answer about investing in solar for your home.
How Can Solar Positively Impact Home Prices?
For many folks, a home is not just a structure with a roof above it. A home is a huge investment. So, savvy homebuyers typically assess the long-term value of the property they plan to buy. Their considerations include the possible monthly electric bills they’ll become responsible for if they decide to purchase a home.
Thus, if you are selling your home that already has installed solar energy panels and batteries, homebuyers will be more attracted to your property. Many real estate agents use solar as a unique selling point for the properties they want to sell. Plus, buyers are also willing to pay a premium due to the positive environmental impact and economic benefits that come with a solar-powered home.
The Most Obvious Value You Get From Solar Power
The perceived value of home solar solutions varies among homeowners and will also depend on the area where you live. States and countries do not have the same laws on solar energy. Even the shape of your roof and the weather patterns in your locality will play a role in how much value you can get from your PV system.
But one thing is for sure, when you install solar for your home, you save on electricity. Your electric bills will be significantly cheaper compared to your neighbors who do not have the means to harness the sun’s energy.
Before you connect with solar providers, you can check how much you’ll save using free online solar calculators. In a few years, your savings will allow you to recover the costs of putting up your PV system and even reach a point where you’re technically getting free electricity.
Potential buyers would want the same savings and benefits you enjoy when they buy your home. You can add more numbers to the price of your home and still expect your local housing market to react favorably when you sell.
Can Other Renewable Energy Sources Add Value To A Home?
Before diving deeper into the other advantages of solar power for your home, it may be worthwhile to look at other renewable energy sources. After all, solar is not the only renewable source of energy that is available in the market today.
For years, the unrelenting drive by many governments and non-profit groups has raised the public’s awareness about environmental concerns and conservation efforts. So, apart from solar, there are now other solutions designed for utilizing renewable energy for home use. Wind turbines and biomass are two examples. But why should homeowners focus on just solar panels?
Other renewable energy systems will no doubt bring the same benefits as solar power. But when it comes to home solutions, solar has been ahead of the game. Solar tech has made leaps and bounds in recent years and the number of providers continues to rise. With more market players, solar is more competitive, making it the most accessible and most affordable green energy system for households to date.
Why Solar Power Is Not Like Other Types Of Home Improvements?
If solar power is seen as an upgrade by most buyers, then is it the same as other types of home improvements? This line of questioning typically comes from homeowners who are not exactly convinced that having a solar power system in their property can increase its value.
Well, the answer is both yes and no. Yes, installing solar power is like other home improvements because it could give your property a unique feature that makes it stand out. And no, solar power is not the same as the usual home remodeling because the homeowner often stands a better chance of recovering the costs involved in solar solutions, and such an upgrade has a better chance of increasing the value of a property, regardless of the age or type of the house.
Some homeowners install improvements like a swimming pool or new marble countertops for their kitchen. But when it’s time to sell the property, they might get minimal or even zero premiums for the improvements. In other words, they might not be able to recoup the remodeling costs. Sellers who refuse to reduce their selling prices because of such improvements might have a difficult time selling their property. That’s because home buyers have specific preferences.
You can install a swimming pool, for example, but that will most likely appeal only to buyers who love to swim or host pool parties. So with some other types of home improvement or remodeling, you are adding features that will only attract specific segments of the real estate market.
On the contrary, home solar panel arrays are improvements that provide one of the most basic needs of every homeowner, and that is electricity. It doesn’t matter if you have a gothic castle or a semi-detached house, any prospective homebuyer will want to get free electricity or save on electric bills at least. You get more points if the buyer is also a believer in environmental protection.
Added Value Isn’t Just About The Money
According to the Office of Energy Efficiency and Renewable Energy, there is evidence that homes with solar power systems sell faster than properties without solar panels.
Experienced home flippers and investors will tell you that putting a house on the market is a lot like fishing. You can’t call it a day until you catch a fish, or until the buyer signs the papers and you’ve sold your home. Until you do, things can be stressful. You need to pay for listings and continue paying for the maintenance of the property.
The data about solar-powered homes suggests that home sellers can expect to offload their property in a shorter timeframe. If you decide to sell your home with PV systems installed, you could experience less stress and less frustration. That’s an added value that goes way beyond dollar figures.
Red Flags That Can Affect The Value Of Your Home’s Solar Energy Power
With all the benefits and added value that a homeowner like you can get from solar energy, there are a few alarm bells or caveats that you need to know so you can take the necessary steps and find a way to work around or eliminate them altogether.
- Limited Useful Life – The older your solar panels get, the less efficient they become at producing energy. PV systems don’t work forever. In effect, inefficiencies will erode the added value that it gives your home. Wear and tear affect all parts of your home, from plumbing to air-conditioning. Solar panels are not an exception to that.
- Age Of Your PV system – If you installed your working photovoltaic system in 1990, then it’s logical that it has less value compared to a system installed in 2019. Besides useful life, the outdated technology can affect their value.
- Value Varies Depending On Your Area – The value accorded to solar panels depends on where your home is located. If your area has low utility costs, then having a solar panel may not give your home the intended maximum advantage. But if you live in a place where electricity can cost a fortune, then solar for your home is the way to go.
- Ownership of the PV System – If you are only leasing your solar power system, then you can’t claim ownership of the panels. The supposed added value derived from solar solutions may not be as significant if your buyer is averse to leasing.
- Forfeited Incentives – Most countries and states offer incentives for using solar power. These incentives vary from tax credits to dollar rebates. These incentives have value. If you are the one who first installed a solar energy system in your home, you’re likely to have enjoyed these incentives. But when you sell your home, the new owner will not have any of these subsidies. Therefore, even if you have a working PV system, the incentives you enjoyed will not add much value when you are selling your home.
There’s no doubt that installing solar power in your home can positively drive up its value. In the U.S., solar has become the second-largest source of electricity, making it more accessible and desirable to a larger group of people. In the end, though, the best value that solar power can bring is its positive environmental impact. Your home is an investment. It’s a significant investment of your time, money and energy, but you can also make it an investment in a more sustainable future. By going solar, you take a small step in helping the environment get back on its feet.