The verdict is in: an increasing number of homeowners are installing solar panels to save money. But on top of this, there is another type of value that is worth considering.
One question we as solar panel installers often get is, do solar panels increase property value?
The good news: yes they do.
According to a study from the Lawrence Berkeley National Lab (LBL), installing solar panels can significantly increase your property’s value. according to their 2015 study from over 3,000 homeowners with solar panel systems, “We find home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types.”
This builds on previous research which concluded that California homes with solar panels sold for more than those without solar. In some cities, the retained net value was 46$% higher than the actual cost of the solar panel installation.
How much solar panels can increase home values depends on some factors:
- Whether the solar panels are owned
- What area of the country you live in
- The type of home you own, and the appearance
- What the starting value of the home already happens to be. (Higher-valued homes will tend to receive more value)
- How much energy you will be saving (can be a drawcard for future owners)
1 Kilowatt in energy savings can grow home values by $5000
The National Renewable Energy Laboratory also offers a handy guide to determine how much a property’s value will increase. Their research shows that each additional $1 in energy bill savings (from a solar installation) adds $20 to a home’s total value.
Of course, the exact numbers vary with each property and installation. However, in a state like California, a small 3.1-kilowatt (kW) system could add an average of $18,324 to the value of a medium-sized home.
The property value advantages of solar energy will increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home.
With all these numbers, it’s important to note that these statistics only apply to today’s current housing prices and current utility rates. But of course, as electricity prices go up, the savings potential of solar energy rise will continue to rise as well.