The case for installing solar panels on your home gets stronger every day. Along with producing clean energy and helping to lower your electricity bill, solar panels are also becoming more popular and more affordable:
- From 2006 to 2016, solar grew an average of 59% each year in the United States.1
- In 2016, solar power grew faster than any other new energy source, globally.
- Thanks to improved technology and higher demand, an average-sized residential solar system dropped from more than $40,000 in 2010 to around $17,000 in 2018—and that’s before any incentives are taken into account.1
For many, solar installation makes sense as an investment that pays for itself over time. But do solar panels increase home value?
It appears so! Research led by the U.S. Department of Energy’s Lawrence Berkeley Lab indicates that home buyers will pay a premium for homes with solar installed. Whether you’re considering solar energy for your home or already have it, it’s worth learning what makes it so valuable to homebuyers and how solar panels can increase your home’s value.
Why is solar energy so valuable?
The secret’s out: Energy efficiency is great for the planet and your wallet. Energy-efficient upgrades generally increase property value. In Texas, upgraded homes sold for an average of 8% more than less-efficient homes, according to the U.S. Green Building Council.
When it comes to solar panels, home buyers want them. In a 2015 National Association of Home Buyers (NAHB) survey, 61% of respondents said solar electrical and water heating systems were either desirable or essential features in a home they’d consider for purchase. Plus, research indicates that solar-powered homes sell faster than non-solar homes in some markets.
And sometimes, buyers appreciate energy efficiency but just want a “move-in-ready” house. They may find additional value in a home that already has solar in place.
By how much does a solar panel installation increase your home value?
Compared to other major home upgrades, installing solar panels is a relatively easy, mess-free process that doesn’t disrupt your living space. After getting a free solar assessment and deciding on the type of panels, all that’s left is moving paperwork through the proper channels. Then, it’s time for installation—which usually only takes a day.
Once your solar panels are up and running, you’ll be less reliant on the grid for energy, and your system will start paying you back through energy savings. But even if you’re not sure you’ll stay in your home long enough to recoup the costs that way, solar panels still make a smart investment because of the value they add to your home.
So how much value do solar panels add to a home? That depends on many factors, including:
- What part of the country you live in
- The price of electricity in your area
- The size, condition and starting value of your home
- The age of the solar panels
- How much energy the system saves
The Berkeley Lab study says that each watt of installed solar capacity adds around $3 to a home’s value. The national residential solar system average of 5 kilowatts (kW) generates 5,000 watts of power. Translation: A solar-equipped home could potentially add about ($3 x 5,000 watts=) $15,000 to a home’s value. Pretty impressive!
What are the other perks of having a solar-powered home?
Aside from the potential to increase a home’s value, solar panels offer a number of other benefits to homeowners:
Choosing renewable energy helps protect the planet. A home that uses the power of the sun to produce electricity reduces the need for burning fossil fuels, which emit greenhouse gases like carbon dioxide (CO2).
Solar panels can help lower your electricity bill. After saving enough on your energy bill to erase the cost of your initial investment—which, by the way, can further be greatly reduced by federal, state and local tax credits—having solar is like getting free electricity for the rest of the panels’ lifespan.
Some companies will even pay you for your electricity. For example, Green Mountain customers enrolled in the Renewable Rewards® program earn a bill credit for excess electricity their solar panels return to the grid.
Do you want to increase the value of your home and help protect the environment?