Solar panels are not just an eco-friendly option to power your home, but they also significantly contribute to the value of your property, potentially adding thousands to your home price.
The increase in property value is influenced by various factors such as local electricity rates, the solar market in your area, ownership structure, and the condition of the system. If you’re contemplating installing solar panels or selling a home with an existing system, read on to better understand the financial benefits.
How Much Solar Panels Can Increase the Value of Your Home
Solar panels can provide a significant boost to the value of your home. One Zillow report from 2019 found that homes with rooftop solar installed sold for 4.1% more than those without solar – coming out to roughly $9,300 more value for a median-valued home. Another 2021 Zillow report notes that 67% of buyers prioritize efficiency as an important factor when choosing their potential home – and solar can be a tool to maximize efficiency while minimizing energy costs.
So, how much more are these buyers willing to pay for a home with solar? The U.S. Department of Energy’s Berkeley Lab conducted a survey that revealed that home buyers are willing to fork over $15,000 or more for a solar-powered home.
What Impacts the Added Value of Solar Panels On a Home?
Just how much value solar panels add to your home will depend on several factors. The amount of value added by solar panels is largely determined by the local rate for electricity, the condition and output of the system, as well as market conditions.
Local Rates
The added value of solar panels on your home can vary significantly depending on how much homeowners pay for electricity without solar. For instance, if you live in a state where electricity rates are much higher than average, such as Hawaii or California, you’ll likely see more added value from installing solar panels than someone living in an area with lower average electricity prices.
Solar Market
The solar market in your community impacts the value of your home with solar panels. If there are a lot of incentives or tax credits available for homeowners to install solar in your state, county, or local municipality, this may result in more buyers being interested in homes with pre-installed systems.
Leasing vs. Ownership
The ownership structure of a home with solar panels also affects its value on the market. Generally speaking, a home that has owned and paid-off solar panels installed on it provides more added value than buying a home with leased panels because buyers often don’t want to transfer a lease into their name or face the added cost of purchasing a new system once the lease ends.
System Condition and Output
A solar system’s current condition and output play a role in the added value it brings to a home. If you sell your home with solar, it’s important to ensure that all panels are operational and performing at optimal levels before listing. This will give buyers peace of mind knowing their solar system will work well and produce enough energy to offset their electricity costs.
How Solar Plays Into Buyers’ Budgets
Purchasing a home with a paid-off solar energy system also translates to dollars saved when buyers calculate the standard monthly costs of owning a new home. This practical calculation includes factors such as mortgage payments, utilities, etc., but when it also includes solar, it can significantly reduce the cost of monthly utilities and make the cost of owning a solar-powered home much more affordable. Knowing this, buyers are often more willing to pay more for a home that they know will help them save in monthly costs in the long run.
Considering Solar in Pricing Your Home
It’s important to do research on local rates, incentives, and market conditions to get an idea of what potential buyers might be willing to pay for a solar-powered home in your area. Ultimately, you should think of solar as an investment in the value and efficiency of your home that can pay off in the long run – including in how much more your home sells for when you’re ready to put it on the market!
To learn more about going solar and see how much you could save by making the switch, reach out to Tampa Bay Solar for a free energy audit to get started.
