A common question from those looking into going solar is – “Does solar add value to your home?” The answer is a resounding – Yes!
While this may be old news to solar industry insiders, residential solar power is still a new enough industry for the home value discussion to happen. Home builders, developers, realtors and other real estate professionals are now taking the value of solar into their calculations.
So how much value does solar add to your home? Well, earlier in 2015, there was a study led by the Lawrence Berkeley National Laboratory which concluded that a solar panel system adds $15,000 to the value of a home. Now this was from information gathered from 1999 and 2013 and is based on an average system size of 3.6 kilowatts. This leads to a value of $4 per watt. Many homeowners would need at least a 5 kw system, leading to an increase in home value of $20,000 or more.
More recently, EnergySage completed an analysis of how solar panels increase home value in 15 U.S. cities. In the top 5 cities – San Francisco, Los Angeles, Las Vegas, New York, and Newark – an installed solar panel system actually has been shown to add more value to your home than the system itself cost. For example, the average price paid for a system is close to $20,000 in Los Angeles which then increases the value of the home by about $25,000. This amazing increase in property value is definitely tied to the low cost of solar compared to conventional rates in these high electricity rate cities.
The top 10 cities in this survey shows that a solar panel system can easily beat many home improvement projects in terms of value added. Homeowners in those cities will get at least an 80 percent value retention with solar compared to a major kitchen remodel, in which you’ll only recoup about 67 percent of your investment. Solar may not be considered a home improvement project yet, but when homeowners become aware of the numbers involved, this will change soon.
This whole discussion is based on a very important assumption. The assumption is that homeowners choose to own their systems. Most of the benefits of going solar are given up with leasing. While many people do not have the cash needed for a solar panel system, this is no longer a roadblock with the many different ways to acquire solar financing today.
So in addition to the massive savings associated with paying less for solar electricity, homeowners can now look forward to improved home values thanks to solar power.