Installing solar panels can significantly increase your property’s value, according to a new study from the Lawrence Berkeley National Lab (LBL). The report, titled “Selling into the sun: Price premium analysis of a multi-state dataset of solar homes“, builds on previous research which concluded that homes with solar panels sold for more than those without.
Do solar panels add value to a house?
The new study investigates home pricing trends in Florida, Massachusetts, Maryland, North Carolina, New York, Connecticut, and Pennsylvania by analyzing the sales of over 20,000 homes in these states. LBL’s analysis of the housing markets in these other states shows that the premium paid for homes with solar is clear, solar panels really do add value to a home.
If you are thinking about purchasing a solar system for your home, the study’s conclusions should give you a boost of confidence that you are making a smart investment. LBL finds that homes with solar panels will benefit from a ‘solar premium’ when they are sold because buyers are willing to pay more for a home with solar panels.
How much does solar power increase home value?
Example: a 5 kilowatt (kW) solar system (the national average) will offer 5,000 watts of power. LBL says that each watt of solar adds about $3 to a home’s value in Florida and $4 in California. Thus, a home with solar should sell for about ($3 x 5,000W =) $15,000 more in FL or ($4 x 5,000W =) $20,000 in CA.
Specifically, in this state analysis, prospective buyers wondering if solar panels increase home value were pleasantly surprised. What is surprising about these figures is that they are very close to what you would pay for a brand new solar system today. Our own analysis of prices for 6kW solar systems in Florida reveals that some of the more expensive systems cost just over $3.50/W. And bear in mind that these prices are what you would pay before you take into account the generous 30% Federal tax incentive that is available.
All of this suggests that if you sell your house soon after you have a solar system installed, you will recoup most or all of your investment, even as you save money on your power bills. It also confirms what we’ve said before: Payback periods on solar power systems are not something to be overly concerned about. Your solar system will either increase your home value significantly should you decide to sell your house, or it will pay itself off in power bill savings before you move out. In both cases, solar is a sound investment.