Does Going Solar Affect Your Home Value?
More and more people are realizing that solar energy is indeed cheaper, cleaner, and greener than electricity purchased from a utility company, but does having a solar system on your home increase its resale value?
The answer is dependent on whether you own or lease your solar system.
Is the System Owned or Leased?
You are likely to find that home buyers will pay more for a house that includes an average-size solar system. Solar leases, however, may be less attractive selling points as most buyers do not want to buy out a lease on a system they can never own.
In addition, most banks recognize value added when a solar system is purchased but not if it is leased. The current wisdom, therefore, is that it’s better to take out a home equity loan to purchase a system because you will get it back when you sell.
Lawrence Berkeley National Laboratory Study – 2015
A comprehensive study by the Lawrence Berkeley National Laboratory in 2015 looked at home sale data from 8 different states for more than ten years to determine the exact value of a solar installation. The results varied somewhat across regions, but found a strong correlation between solar panel installations and higher home values. California home values with solar installations saw significant increases in property values as did other states.
The study was based on an average solar system size in the US being 5 kilowatts or 5,000 watts. The data showed a rise in property value of approximately $4.00 per watt in California and $3.00 per watt elsewhere. The study further concluded that an average system increased a home’s value by approximately $16,000 in California and around $12,700 elsewhere.
Although the study represents a wide data set and the most recent data analysis in solar home valuations, the findings cannot be applied to every individual home or area. Home features and neighborhoods vary widely. Nonetheless, the correlation between better home value and solar power is worth watching.
At SunLynk, our installers can help you to determine local trends in your area and offer their insight into home values when it comes to solar systems. Solar is a strong investment that begins to pay off the moment the system is activated.