Before you invest in a solar solution for your home, you may be wondering whether it can increase your home's value, especially if you intend to move sometime in the next 5–10 years. The simple answer is yes: installing solar is a value-added for most homebuyers, and could represent a good return on investment for you when you choose to sell your house.
How Solar Increases the Value of Your Home
In January 2015 the Lawrence Berkeley National Laboratory published a report entitled, "Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes." Its results were great news for homeowners seeking solar as a means of boosting resale value. Between 2002 and 2013, the research team analyzed nearly 22,000 home sales, almost 4,000 of which contained PV systems, in eight states. The report found "that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system."
Another study, "Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis," also found that solar provided a premium on home prices in the states surveyed, ranging from 2.52% of sale price or $3.82/W in Baltimore to 6.39% of sale price or $3.45/W on the Gulf Coast of Florida, with differences being attributed to age of the systems surveyed.
Additional Benefits of Solar for Home Resale
Many buyers see the addition of a solar-energy systems as a desirable home improvement. While high-quality amenities such as expensive kitchen countertops or remodeled bathrooms are what most people think of when considering ways to boost resale value, solar is increasingly joining the ranks of these key drivers in home sales.
From a homeowner's perspective, a solar installation carries with it many of the same steps required for any remodeling job. You have to take the time to seek the right local contractor or installer and decide which financial mechanism to use (whether you're buying your system, entering a power-purchase agreement, etc.), among other choices. Your installer also has to work with the local municipality to procure permitting and discuss the technical aspects of the project. All of that being said, it can be a huge selling point to have all of this work already completed. Further, since the value of the system will be integrated into the original mortgage, the homebuyer won't have to spend any time seeking and managing a loan or reducing the equity in the house through additional financing.
Proof of performance
A potential homebuyer has the ability to see the financial and environmental benefits of solar power at work in an already-functioning system. For those who are already considering solar solutions, having tangible proof of a system's performance and impact on monthly electric bills can push them to choose your home over another, without solar pre-installed. And those who hadn't considered solar as an energy solution can see an existing energy bill that conveys added benefits such as net metering credits, reduced costs, and the ability to comprehend one's own energy usage.
With an existing system in place—be it roof-, ground-, or pole-mounted—a potential homebuyer can easily calculate how much he or she will save on energy bills per year. In other words, it takes away the hypothetical aspect of deciding whether a solar solution is worth the investment. If you know you're looking to resell at some point in the future, find the solar solution that produces the most ROI for you, so when the time comes, you can demonstrate it to potential buyers. For example, a dual-axis solar tracker can produce up to 45 percent more energy than rooftop systems, since it follows the sun over the course of a day. By seeing the system at work, the question for the potential homeowner isn't "Do I want solar?" Instead, it's "Am I willing to pay a premium to receive more ROI over time?" Chances are, the answer will be yes.
Solar could be the right choice for you. Learn more about the basics of going solar in our Homeowner's Guide to Investing in Solar.