People decide to install a solar system in their homes for a number of different reasons.
Some folks are looking to switch to a renewable form of energy, so they’re not depleting the earth’s finite resources every time they switch on a light. Others are concerned about the disastrous environmental impact coal-burning plants have on our land, air, and water.
Some turn to clean green energy out of concern for the present, whereas others are trying to preserve the planet for future generations.
And, of course, a lot of folks go solar simply because they’re tired of paying exorbitant monthly energy bills.
But another financial benefit of installing a solar system is that it will increase the market value of your home itself. And that’s not just conjecture, researchers have been quantifying the beneficial effects solar panels have on market-value for decades.
Energy Savings in Homes
Way back in 1983, a couple of researchers named Ruth Johnson and David Kaserman found that home value increased by around $20.73 for each dollar saved annually on energy. According to the U.S. Energy Information Agency, the average family in Pennsylvania spent around $1400 on electricity in 2019. If Johnson and Kaserman’s numbers still hold up, that translates into an increase in value of $29,000 for the average PA homeowner who goes fully solar with a host-owned system.
The Market Value Establishes
A more recent 2011 study by the National Bureau of Economic Research (NBER) found that buyers are willing to pay around 3% to 4% more on average for homes powered by solar energy. Moreover, the NBEC found that this increase exceeds the amount of money buyers will save by generating free electricity. Merely having solar panels, itself will increase the value of your home somewhat even if you lease them. As the NBER report notes:
Similar to other home investments such as a new kitchen, solar installation bundles both investment value and consumption value. Some households may take pride in knowing that they are producers of “green” electricity and “warm glow” may triumph over present discounted value calculations in determining a household’s install choice.
The Market Value Increases
A 2015 study by the Lawrence Berkeley National Laboratory tabulated increases in home market value in terms of the size of its solar system. For every kilowatt (KW), the value of a home with a host-owned solar system increased by around $4000. Hence, a small solar system of around 5 KW owned outright would yield a $20,000 increase in market value, and a larger 20 KW system would yield around $80,000 extra when it’s sold.
The Importance of Solar Homes
Finally, a 2019 study by the real estate marketing website, Zillow, found that around 90% of home buyers say energy-efficiency is an important factor, with 56% labeling it extremely important. And there’s no way to be more energy efficient than harnessing the power of the sun to generate your own cost-free electricity.
The Different Factors of Solar That Effects Value
The exact amount of added value you’ll get by installing a solar system will, of course, depend on a number of factors.
If you lease your solar system instead of owning it, the increase in home value will be significantly less.
Other factors influencing just how much added market value you’ll get from going solar include the cost of electricity in your area and the amount of energy your system generates. Or, in other words, how much money you’ll save by reducing or outright eliminating your home energy expenses. To get a rough idea of the savings you can expect, you can check out Google’s Project Sunroof.
But, if you’d like a more precise idea of how much money you can save by going solar, call for an appointment with one of our design consultants and get a full no-obligation analysis on:
- The exact solar system that’s appropriate for your roof.
- How much energy it will generate given local weather, trees, and other obstructions.
- And importantly, exactly how much money you can expect to save on monthly energy by owning the system vs. leasing it.
The bottom line is that the higher that number is, the more added market value going solar will bring to your home.