Do solar panels increase home value?
Whether or not solar panels can increase home value depends on a number of factors like, the quality of solar panels and how you own the panels, where you live, and how long you plan to stay in the house.
The question of whether solar panels increase home value has been a subject of debate for years. Homeowners weighing the decision to invest in solar panels often wonder if the investment is truly worth it, both in terms of environmental impact and potential financial gains — after all, solar energy systems aren’t cheap.
Whether you’re getting ready to move or you’re staying put, it only makes sense to consider investments that boost your equity in your home. That said, solar panels do increase a home’s value, but it’s important to make sure you understand the full costs and the potential return on investment associated with them.
While the overall cost of solar panels depends on your personal situation, here’s a breakdown of some of the common factors that affect price:
According to recent data from Forbes, solar panels cost around $16,000. They also cite a price range of $4,500 on the low end to a maximum of $36,000.
When you invest in solar energy to power your home, you not only lower your carbon footprint and your reliance on energy from the grid, but you also enjoy an increased home value. There are several statistics that support the belief that investment in solar improves home value:
Curious about how solar panels impact your home’s value? It’s not just about the panels themselves, but a combination of factors that come into play. Let’s break it down:
The size and quality of your solar panel system matter. Larger and more efficient systems tend to add more value to your home. A larger system can generate more electricity, potentially leading to greater energy savings and a more attractive asset for potential buyers.
Sun-soaked regions with higher energy costs tend to see a greater increase in home value from solar installations. Areas with abundant sunshine and expensive electricity rates create a favorable environment for solar, making homes with solar panels more desirable to buyers. Additionally, certain regions may offer additional incentives or favorable policies for solar energy, further enhancing the value proposition of solar panels and attracting potential buyers.
The potential savings on electricity bills over time contribute significantly to the overall value proposition. By generating renewable energy, homeowners can offset a portion or even the entirety of their electricity consumption, leading to long-term cost savings. This potential for reduced energy expenses can make a property more appealing and financially advantageous to buyers.
Owning the solar panels outright adds more value compared to leasing, which might raise questions for potential buyers. It all comes down to how solar panels (and other capital intensive features) are financed. If you choose a lease to purchase your solar panels, the lender will remain the system’s legal owner. So in order to sell your house (and the attached solar panels), homeowners have to buy out the lease or transfer it to the buyer — both of which can slow down the home sale and disincentivize potential buyers from putting in a competitive offer.
Put simply, “Anything that still has a loan attached to it (like solar) or that gives the installer a tax break (also like solar) is not a benefit to a new buyer,” says Nicholas George, an Orchard real estate based in Austin. That means this green update is better left to homeowners who will be in their home for many years to come.
The age of the solar panel system plays a role in its value contribution. Newer systems with better efficiency and longer lifespans tend to offer a stronger value boost. Buyers are often more attracted to newer systems that are likely to provide reliable energy production and require less maintenance or potential replacement in the near future.
Providing accurate and comprehensive information about the solar panel system can significantly impact buyer confidence and the perceived value. Disclosing details about the system's warranty, maintenance history, and energy production data helps potential buyers make informed decisions. Transparency instills trust and demonstrates that the system has been well-maintained, contributing to the overall appeal and market price of the home.
So, while it’s not just one thing that affects the value of solar panels, it’s the combination of these factors that determines how much they enhance your home’s overall appeal and how much it's worth
A solar-equipped home isn’t necessarily harder to sell. In fact, it usually works in the seller’s favor. While potential buyers might have some questions, the benefits usually outweigh any concerns. Solar panels can be an attractive selling point, showcasing your commitment to energy efficiency and sustainability.
When selling, make sure to provide accurate information about the solar panels: whether you own them outright, lease them, or are in a power purchase agreement. Putting in the effort to provide upfront communication helps potential buyers understand the arrangement and feel more comfortable with the investment. It’s also a good idea to have documentation of the system’s energy production and any warranties, which can help instill confidence in potential buyers.
Here’s what to know about buying a home with solar panels
While it’s true that you’ll save money by investing in solar panels and using them to harness free, renewable energy from the sun, there are ways to get an even better return on your investment. Some simple ways to get the most out of your solar energy system include:
Several utility companies across the country offer Time-of-Use plans, charging customers higher rates for electricity at peak usage times throughout the day. You can optimize your solar to take advantage of lower rates at off-peak times.
Net metering is a game-changer when it comes to extracting value from your solar panels. This process allows you to send excess energy your panels generate back to the grid, effectively turning your meter backward and earning you credits. With net metering, you store excess energy in a solar battery. You can then use this energy on cloudy days or at night — when your solar panels aren’t collecting energy. Also, when your panels produce more energy than you consume, you can sell it back to the grid for credits on your electricity bill.
You can ensure your solar panels operate efficiently and maintain their value by keeping up with routine care and maintenance as you do with the rest of your home. Clean them regularly to optimize their energy production. Also, periodic inspections by professionals ensure that the panels are functioning optimally and that there are no technical issues.
Investing in solar panels offers not only environmental benefits but also potential financial gains. While the upfront costs can vary, the long-term savings on energy bills, government incentives, and increased home value make solar panels a worthwhile consideration for homeowners looking to embrace renewable energy. Consult with solar installation professionals to determine the exact cost for your home. They can provide personalized estimates based on your specific needs and location. Don’t hesitate to ask questions, so you can make the best decision for your financial future.
While most homeowners understand that solar energy systems save you money on your energy bills and reduce your environmental impact, not everyone knows the finer details of how solar energy systems work. Here are some more details to guide you as you research this major home upgrade.
As mentioned, the approximate value solar panels add to a home depends on several factors, from the quality of panels you invest in to the location of your home. Research market trends in your area and talk to your trusted solar provider to get insights into how this upgrade will increase the equity you have in your home.
Yes — solar panels are known to save homeowners money on electricity bills. With the reduction in demand for traditional grid electricity, you could save anywhere from $10,000 to $40,000 over the lifespan of your solar panels (typically 25 to 30 years). Again, your approximate savings depends on your location; the size and number of panels you invest in; and the efficiency (quality) of your panels.
Also, when you harness free, renewable energy from the sun, you can become energy independent. And, if you make an additional investment in a solar battery for net metering, you can even sell excess energy back to the grid (in places where it’s legal).
Absolutely. Solar panels can increase home values in Texas, just as they do in other states. With Texas’s abundant sunshine and the growing emphasis on renewable energy, homes equipped with solar panel systems tend to attract environmentally-conscious buyers. Additionally, the potential for reduced energy bills and the long-term financial benefits contribute to the overall value proposition.
You can use solar panels during an outage, but it’s not exactly simple. While traditional grid-tied solar systems shut down during outages for safety reasons, hybrid systems with battery storage can provide power to essential appliances, offering a level of backup during emergencies.
Modern solar panels are designed to withstand various weather conditions, including hail. Most panels are tested for impact resistance, and their tempered glass surfaces can handle hailstones of a certain size without significant damage.
While it’s technically possible to move solar panels, it’s often more cost-effective to leave them behind for the new homeowners. As outlined above, the value they add to your home can make the sale more appealing.
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