Solar panels save you money on electricity costs in the long-term. But does installing a solar system make your home worth more today?
In short, yes. But the amount your property value increases by depends on several factors.
In a study conducted by Berkeley Lab in California, sale prices of 72,000 homes (including 2,000 homes with PV systems installed) were analyzed to determine whether homes with solar PV systems sell for significantly more than comparable homes without PV systems.
The results demonstrated that homes with PV systems in California did in fact sell for a significant premium over homes without PV systems. On average, houses with a relatively new, “average-sized” PV system sold for $17,000 more than a comparable house with no PV. The average-sized PV system was based on the sample of homes studied, and represented a PV system of 3.1 kW.
According to the study, the average premium added to the property value is comparable to the average investment cost of purchasing and installing the system. The average premium is equivalent to $5.5 per watt (DC) of installed capacity. This is slightly higher than the average PV installation cost in California, which from 2001-2009 was $5 per watt after applicable state/federal incentives.
Another interesting finding was the difference between price premiums on new homes built with PV systems versus existing homes that added PV systems. New homes tended to fetch a smaller premium (about $2.3 - $2.6 / watt) versus existing homes ($6 / watt average). This could be explained in several ways, including lower net installation costs for PV on new homes compared to existing homes. It’s also possible that real estate developers set slightly lower prices for new houses with PV systems, as they can gain value in other ways, such as by using the appeal of included solar systems as a market differentiator and selling point to close deals faster.
In any case, the bottom line for homeowners interested in going solar is that installing a solar PV system on your house will very likely add significant value to your property. The added value is likely to be similar to the purchase price of the solar system, if not slightly more. This is great news for anybody who may be hesitant about installing a solar system because of the relatively long-term nature of the typical cost payback scenario. Even if you decide to sell your house before the system has reached its breakeven point, there is a high probability that you will fetch a significantly higher value for your home than if it had no PV system.
You can read the full study here (pdf link).