Americans are investing in solar power. The rate of installation for solar panels is going up every day, and for good reason. Solar panels are not only good for the environment, but they also help you save money on your energy bills. And now, studies are showing that solar panel systems actually increase the value of your home. According to some studies, having solar panels increases the value of your home by an average of 4.1%, which means almost $10,000 for median-valued homes in the U.S. However, there are a number of factors that need to be considered when determining if and by how much your home could increase in value.
Are Solar Panels Worth The Investment?
Solar panels might just be worth the hefty price tag. Research shows that buyers are willing to pay more for homes with rooftop solar panels. How much more? Well, about $15,000 more for a home with an average-sized solar photovoltaic system. Actual figures vary from property to property and from installation to installation, but recent research shows an average increase in the resale value of between $4,020 and $5,911 for each 1 kilowatt (kW) of solar installed. As the price of traditional electricity goes up, so does the value of having solar panels installed.
Do Homes Everywhere Increase In Value?
Just as property prices vary depending on where you are in the country, the value that solar panels add varies, as well. Adding solar panels in popular metropolitan areas such as New York and San Francisco will add more value to houses than in other areas. Property value in these areas could increase anywhere from 4.4-5.4%. This does not mean that other areas will not see a rise in their property’s value, it just might not be as steep. According to the studies, no homes dropped in value after installing solar panels.
Research by Zillow shows that the top 10 states with the highest solar premiums are: New Jersey, Pennsylvania, North Carolina, Louisiana, Washington, Florida, Hawaii, Maryland, New York, and South Carolina.
There are other factors that go into determining how much solar panels could be worth. Not only does value depend on where you live, but also the size of your installation, the starting value of your home, and whether you own or lease the panels. Property value increases are proportionate to the number of solar panels installed. And, if your house is larger, there will be a larger boost to your home’s value.
Finally, there is a big difference between leasing and owning solar panels when it comes to your home’s value. Leasing solar panels is a cheaper option, but having leased solar panels can create complications if you sell your home. There is a risk that buyers will shy away from purchasing your home, because they will have to take on the additional costs of the lease.
Other factors that go into determining how much solar panels will affect the value of your house are:
- The local price of electricity
- System replacement value
- The amount of energy the panels generate
- State incentives
- How environmentally conscious the community is
- How frequently power outages occur
- The age of the solar system- newer systems are worth more
- Local understanding of solar technology and benefits
The lower electricity costs and the tax incentives of solar energy are attractive to many buyers, so you can expect to add a good amount to your property’s value with the installation of solar panels.