Solar panels are one of the best investments you can make. Stable and predictable returns have turned solar into a reliable mainstream energy source. As with most investments, solar panels yield long-term returns. Many homeowners consider the impact of solar on their home’s property value before locking into a long-term commitment. A common resulting question becomes “does solar increase home value?”
The short answer? Yes. A solar panel system is an asset for a home, just like any other. There are several factors which determine just how much your home value increases with solar panels.
What factors are involved?
Increased home value from a solar panel system will reflect the overall financial value that the system would return in savings for a homeowner.
- Location: If your home is in an area receiving little sunlight, chances are the production of the system would be lower than one in a sunny area, lowering its value. (For instance, Louisiana has an above average amount of sunny days in a year, meaning solar panels have more value.)
- Local Policy: Some state and local governments provide friendlier incentive programs for solar installations. Policies such as net metering and tax credits have a large effect on the overall value of a solar panel system. Learn more about these policies here.
- Utility Rates: If your home is in an area where utility rates are above average, your solar panels would provide larger savings, increasing their value.
- Owning vs Leasing: Only owning solar panels will increase a home’s value. Since leasing solar panels is essentially a rental, the array would not be included in the home’s value assessment.
How much does solar increase home value?
Though it’s difficult to calculate the exact value that different systems provide, studies have shown that homebuyers are willing to pay an additional (on average) $5,000 per kW of installed solar capacity. For a 10kW solar panel system, a medium sized array, this means that solar could add $50,000 to your home’s resale value. (National Renewable Energy Laboratory, 2015. Zillow, 2019. Lawrence Berkley National Laboratory, 2013.)
However, considering the factors involved, a system in your area could be worth significantly more or less than the average.
Curious to learn more? Ask the experts and contact us for a free consultation.