Solar panels increase property values
Last updated 7/15/2020
Increase home value 3-4% by installing a solar panel system
Multiple studies have shown that homes with solar panel systems are valued and sold at prices above similar homes in their area. Early studies focused on established solar markets such as California found that home values increase by four percent or more when homes are equipped with solar panels. Lawrence Berkeley National Laboratory, a research laboratory affiliated with the Department of Energy, continues to expand on that research as solar grows across the U.S.
The Lab’s 2015 Selling Into the Sun report analyzed sales of solar-equipped homes in eight different states over 11 years with the goal of determining just how much value solar adds to a home’s sale price. The key finding: on average, homebuyers are “consistently willing to pay PV home premiums” of approximately $4 per watt of installed solar capacity (note: this study only covered homes where the solar PV system was owned, not leased). For a standard 6-kilowatt solar PV system, this means that solar can add $24,000 to your home’s resale value.
Installing solar panels on your home can increase its value, but only if you own the system. If you install a solar panel system through a lease or PPA, you are essentially “renting” it from the third-party owner. Since you don’t own the system, it cannot be included in assessments of your home’s value. Most studies about solar and home values focus exclusively on owned solar energy systems.
Many of the same factors that drive your overall financial returns also drive increases in property values. Not surprisingly, the largest increases are in areas where electricity rates are high and strong solar incentive programs exist. All of this is great news for property owners with solar PV systems: they not only recoup the initial cost of their systems when they sell, but also receive a premium that will increase their returns on their investment.
Recognizing that solar power systems add value to a property, the real estate industry is working to create more sophisticated methods for accurately determining the market value of solar, as well as the financial value of properties equipped with solar power systems.
Learn more about how solar panels increase property values:
- Lawrence Berkeley National Laboratory: Selling into the sun: Price premium analysis of a multi-state dataset of solar homes
- New York Times: Appraising solar energy's value: Solar panels and home values
- CNET.com: ECON 101: Solar panels increase home values
- Zillow Research: Homes with solar panels sell for 4.1% more
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