A lot of homeowners are skeptical about whether a Home Solar System will positively effect property value. One common question I am asked constantly by homeowners is “What happens to my solar system when I sell my property? Can I take it with me?” My answer is answer is yes but I suggest you leave the system in place because when you sell your property you will get every cent of your investment back. Take what you get back and purchase a new solar system for your new residence.
While it seems very clear to me, homeowners seem to have a hard time accepting that adding a home solar system to your property increase the value of that property. Think about it…..if you have two identical house side by side and one has a home solar system on it, a means to produce free electrical energy for the rest of your life, wouldn’t be worth more on the real estate market than a house without it? Since electricity over time goes up in price, shouldn’t that system at very least hold its value and most probably it will actually increase in value.
According to the National Renewable Energy Laboratory of the U.S. Department of Energy there is an equity boost in a property equal to $20 for each $1 of annual electrical savings produced by the solar system. So if you where paying $150 a month to your utility company and now your utility bill has dropped to $20. That is a savings of $130 a month. $130 x 12 months x $20 = $31,200 in increased property value. Why? You have added a real property asset to your property that will at minimum hold its value because the resource it replaces will increase year after year. You gain an immediate value that is transferable to anyone that lives in that home. The NREL reports state that solar homes sold for on average 17% more and 20% faster than non solar homes. Other estimates of increased Home Value put the equity boost at $1.20 for every $1.00 invested in your solar system.
Solar is one of the best home improvements you can make because the value of the system does not depreciate as do most other improvements. The more utilities go up the more people are willing to pay for an energy-efficient green house.
The main problem in evaluating increased home value due to a solar installation is the lack of guidelines for appraisers and real professionals so they can adequately valuate a solarized property. Although 8 out of 10 new home buyers are willing to pay up to 10% more for a solarized property, home sales professionals have been slow to realize the real value proposition in going solar.
So what does it mean if you decide to put a solar system on your home? You put your money toward something your are the owner of and you control your future energy costs until that solar payment eventually disappears. So while every one of your neighbors is exposed to increasing utility costs you have sheltered your costs for the foreseeable future.
Then you sell your house and recoup all or most of your solar investment. What does that mean? That means that for the time you lived on that property you paid absolutely nothing for electricity. Can it get any better and paying zero for your electricity? No!
Lets say you stay at your property, pay off your home solar system and now you have no utility bill and no solar payment. You are saving 100% of that $150 per month. Based on the cost of the solar system itself your monthly savings usually pencils out to about a 10-13% annual dividend on your money with no market risk.
There is really no downside to going solar. The downside to this point is not enough U.S. homeowners are recognizing that the true benefits of solar go way beyond saving a few dollars on your monthly bill and helping the environment. Going Solar has true long term benefits for the property owner.
Other perspectives on Home Solar Systems and Increased Property Values: