Having a solar panel system installed on your home is a great way to save money and reduce your electricity bills. As an added bonus, it will also make your home more attractive to potential buyers. Depending upon location and the type of system installed, you can expect to see a notable increase in the value of your home.
Solar Panels Increase Property Value – What The Studies Reveal
Results of 6 Different Studies
Adding solar panels to your home can be a great way to increase its value. But how much of an increase in value can you expect to see? That’s a very good question, and while the studies are unanimous in their conclusion that solar panels do indeed increase the value of your home, they vary greatly on the percentage of increase.
It should be noted that no two properties are exactly identical. When a study compares the sales price of 500 homes with solar panels to 500 home without solar panels, well, it’s not a 100% comparison of apples to apples.
With that as a preface, let’s take a look at the results of 6 separate studies.
In a 2017 study done by 3 professors examining transaction and valuation data for a sample of residential properties in Arizona, they found that “properties with electricity-generating solar panels enjoy an average premium of approximately 15% of medium home value and transaction price premium of 17% of medium home sales price.”
That’s significant! For comparison sake, let’s take a $500,000 home in Maine without solar panels. After solar panels have been installed, a 15% increase in home value would equate to $575,000.
A study done a decade ago looked at the solar home price premium in San Diego and Sacramento, California. The study concluded that solar homes commanded a 3.5% premium.
It should be noted that this study was done in 2012, and the market has evolved in the decade since the study was done. Additionally, the average price home in San Diego is $850,000, and the average price home in Sacramento is $465,000. The 3.5% premium for the addition of solar panels equates to $29,750 and $16,275 respectively.
In a study completed in Australia in 2020 by 3 professors, they found that for solar homes “the gross premium was 4.3% of the average house price; the average net premium was $21,403 AUD.”
In 2019, Zillow complete research that looked at how much solar panels will add to the value of a home, and the results were very similar to the Australian study. The researchers from Zillow determined that “homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power.”
Now, we are obviously wildly enthusiastic about solar panels, that’s what we do! However, we do feel that the next study might be a little over enthusiastic. The study was done by the National Association of Realtors. The found that “Solar Panels Boost Home Value by 56%,” and that “Solar paneled homes tend to cost an average of $680,000—about 48% more than the average home in a given area.”
To put that into perspective, again using a $500,000 home here in Maine as an example, if solar panels are added to that home, using the data from the National Association of Realtors, the home would be worth 56% more, or just over $892,000.
Please remember, we are not making that claim, the NAR is.
The final study of the 6 was done by the U.S. Department of Energy. While the results of their study are not quite as eye-popping as the one published by the NAR, the results are still eyebrow-raising nonetheless.
The study was titled “Energy Efficiency and Renewable Energy.” The conclusion was that home value increases $20 for every $1 reduction in annual utility bills.
Let’s apply this finding to our example of the hypothetical home in Maine. A quick Google search reveals this:
Applying the numbers to the Department of Energy findings means that if the home added enough solar panels to offset the monthly CMP bill of $196, it would add $47,040 to the home’s value. ($196 per month x 12 [annual savings] x 20)
We feel that number is quite realistic.