By Reducing Monthly Ownership Costs, Solar Panels Increase Home Value
Some states offer such great financial incentives to go solar that the end cost to the homeowner can be less than the cost of an updated bathroom. But even an investment of $10,000 -- and many solar installations, even after rebates and tax incentives, cost twice or three times that amount -- can be difficult to build back into the sale price of your home when it goes to market.
Partly, this is because it’s a challenge to make the value of solar clear to prospective buyers, if they’re not solar fans themselves; they may be concerned about maintenance costs, how much the system really reduces the electric bill, or even the aesthetics of the system.
If you’re trying to sell your solar home, make sure your real estate agent knows the full value that your solar panels represent to the home: have actual facts and figures available, looking at your electric bills before the installation and after, and any payback analysis your installer did for you. Solar is so much more than a pretty accessory: new homeowners might not like the blue tile you put into the bathroom, and they might rip out your new expensive Italian marble countertops. But solar isn’t a matter of preference, and the value it adds to your home is quantifiable. In this market, prospective buyers should be aware that they’re essentially purchasing greater energy security with the purchase of a solar home. They are reducing the amount of their electric bill that is exposed to cost-per-kWh fluctuations from the regional utility, and building that security into the purchase price of their new home should give them peace of mind rather than otherwise. Education is your best ally here.
If you live in California, there is another route available (currently just in Palm Desert and San Francisco, though municipalities throughout the state can choose to pursue it as well). Residents of participating municipalities can fund their solar installation with a loan that they pay back via property taxes over time. And the real coup de grace: when the house is sold, the balance of the loan simply shifts onto the new homeowner. You don’t have to worry about building the sale price into the house, or finding a buyer willing to tack on the extra ten or twenty grand to their mortgage. It’s seriously cheap debt, repayable in a no-hassle fashion.
Just remember: in any market, even in a bad one, a solar panel installation represents far more than a monetary investment. But in a decent market, what an investment in your home!
“A solar electric system increases home value by $20,000 for each $1,000 in annual reduced operating costs, according to the Appraisal Institute. A solar electric system compares very favorably with other home improvements in percentage of cost recovered. Often, a solar system can recover much more than 100% of it’s cost and this percentage actually increases over time as electric rates rise. (See West Coast Solar).
Solar & Home Value