How Do Solar Panels Increase The Home Resale Value?

“More than a home, customers are looking for a climate change solution.”

The real estate industry in the US is witnessing a steep rise in the demand for all-electric homes. Solar-installed residencies are commanding high resale values in the market, and any kind of home energy upgrade is listed as a long-term investment. Energy efficiency is hailed as valuable in house listings as clients seem more interested in sustainability and clean living.

In such a scenario, most people wonder if solar panels really help increase the home value and the answer is yes.

Do Solar Panels Increase Home Value?

A house is your most longing asset, and increasing its monetary value is the smartest way to be. Not all renovations are worthy, but going solar is proven to give the best return on investment.

Solar panels are the most accessible source of renewable energy. They lower electricity bills, promote healthy living by reducing the home’s carbon footprint, and let you benefit from Government tax credits. According to CNET data, the US solar industry has installed 6.1 gigawatts of solar capacity in Q1 2023, which is enough to power 4 million or more houses. So, while solar adoption is on the rise, outfitting the home with solar systems seems to offer a more attractive selling point for those willing to buy the property.

By How Much Do Solar Panels Increase Home Value?

To explain the question - how much does solar increase home value? — you can look into the following.

Homeowners know that installing solar panels lowers costs — a long-term benefit that boosts home prices. They are prioritizing energy efficiency over anything else.

Per the National Renewable Energy Laboratory (NREL), the value of a solar-installed house increases by $20 for every $1 saved on energy bills. This means, if your solar system saves you $600, you could expect the home value to rise by $12000. A 2019 report by Zillow also confirmed that houses with rooftop solar sell 41.% more than residences without any. For a median value home, that roughly translates to $9274 or more. 

Residential buyers are willing to pay upto $15000 more for potential solar homes, so sellers are listing them at humongous prices. This is according to a large-scale study conducted by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab). In New York, buyers are paying upto an additional $23,989 for a solar home, which proves time and again that solar panels increase home value. So, if there are two identical homes, one of which is cheap but without solar panels, the house with solar will sell fast despite being expensive. 

Now, let us look at these average figures based on the Lawrence Berkeley National Laboratory study.

Another report by the LBNL named Selling Into The Sun report (2015) assessed 22,822 solar photovoltaic (PV) home sales in eight states between 2002 and 2013. The aim was to study whether solar panels increase home value at all. Toward the conclusion, they found that buyers paid premiums for PV homes — ~$4 per watt of the total installed solar capacity. 

Hence, there is no doubt that residential solar integration is more profitable than remodeling since it opens doors for competitive real estate analysis. Solar carries a value whether you decide to sell your home or not. 

Solar Panels Home Value: Factors Influencing It

The cost of electricity varies for different regions. Homes with solar panels are more valuable in places that have abundant sunlight and environmental sustainability. Lastly, the kind of government incentives for solar available in your location also play a vital role in deciding the overall perceived value of a property.

1. Location 

The cost of electricity varies for different regions. Homes with solar panels are more valuable in places that have abundant sunlight and environmental sustainability. Lastly, the kind of government incentives for solar available in your location also play a vital role in deciding the overall perceived value of a property. 

In places where the electricity cost is high, buyers give more premiums for solar-installed properties. Cities like New York, New Jersey, and California accrue high residential electricity prices from customers.

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2. Solar System Condition

‍ varies with the system’s age. Solar systems last from 25 to 30 years. This means if your home has a 15-year-old system, it can only provide service for upto another 15 years. Therefore, it is essential to maintain and service the system to keep it functioning for long. Besides ensuring maximum solar potential, it also increases the chances of home sales. 

If you buy a solar home, keep in mind to check all the solar panel documentation, warranty coverage, and maintenance records. These details are useful at the time of home upgrade, repair, renovation, or during future sales. 

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3. Solar Panel Ownership 

Before selling a home installed with solar panels, it is important to choose the correct financing. You must own the system legally, to avail of the solar incentives and reduce upfront costs. Taking a solar lease is not advisable as it does not offer complete ownership of the system. Before selling the home, you should transfer the system’s ownership to the new buyer after meeting the mentioned qualifications, like a credit check. Lease transfers, on the other hand, slow down the selling process. 

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4. Solar Replacement Value

Along the lines of the solar system’s age, it is crucial to take into account the expenses in case of a replacement. This will also decide if solar panels increase the home value. 

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Do Solar Panels Impact Property Taxes?

It is true that when a property’s value goes up, it calls for increased taxes. However, many states in the US offer property tax exemptions. 36 states have laws that exempt solar property owners from paying high taxes, although the rates differ from place to place. 

The New York State Solar program — The Property Tax Abatement reduces property taxes for solar customers by upto 20%. The New York State’s Real Property Tax Law 487 also offers a 15-year tax exemption for properties with solar or other renewable energy sources.

Do Solar Panels Always Increase Home Value?

Having a well-maintained rooftop solar panel will undoubtedly increase the home’s monetary value. The solar incentives and tax credits offered by the Government make it a better option than home renovation. However, changes in state regulations, if any, can significantly alter the value of these. The condition of the solar panels is also to be taken into consideration. If the repairs and part replacement get costlier, the value of the house will likely go down. 

Read this maintenance guide to expand the longevity of your home solar system and learn more about the solar incentives offered by the US Government.

Our Recommendation

Installing a residential solar system provides a boost to the property value. While the prices depend on the location, market, electricity costs, and the current condition of the system, homeowners still find significant benefits in going solar to sustain their living.   

Contact Solarblocks to know how much do solar increases the home value. As providers of professional solar panel installation and maintenance services, our energy experts can help you assess the equipment condition for continual use without disruption. You can also discuss the government solar incentives and financing options with us, to lower your upfront investment costs.

FAQ

1. Do solar panels increase home value?

Going solar means enhancing your home value in today’s real estate market. More and more buyers want to purchase houses installed with solar panels, to reduce home carbon emissions and live a clean future. With solar system installation, you can control your electricity usage and reduce annual energy bills. Therefore, it can help with your savings and you can earn credits via government incentives. 

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2. Does the location matter when it comes to solar home resale value?

Yes, the location of the house matters when deciding its financial value. The availability of sunlight along with the varying electricity rates act as the deciding factors, along with the solar incentives and tax credits offered by the Government. All these contribute to the solar panels' home value. 

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3. Does installing solar panels increase property taxes?

No, solar panel installation does not increase property taxes. Most states like New York get upto 100% exemption from taxes upon installing solar panels. The New York State’s Real Property Tax Law 487 offers a 15-year tax exemption for properties with solar while The New York Property Tax Abatement Program reduces the taxes by upto 20%.

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4. What are the benefits of installing a residential solar system?

Installing solar panels lets the customers enjoy independence from the grid, so homeowners can become energy resilient and manage their monthly energy usage. Going solar helps you save on utility bills by using power as and when required. Besides, solar panels produce electricity by harnessing the power of the sun. It is safe and accessible for all, and homes installed with solar panels have high resale value in the market.