Is it true that adding solar panels or other alternative energy features to your residential or commercial property increases its value? Yes! In fact, compared to many other renovations or additions property owners undertake, investment in solar energy significantly raises property value and lifetime efficiency as well. It’s an investment that pays off for owners, sellers, and buyers in the short and long term.
As PickMySolar reports, “Per the National Renewable Energy Laboratory, every $1 of savings generated from a solar energy system will add $20 to your home’s market value when you decide to sell. Not only will you realize an increase in the value of your home, a solar energy system will help sell your home 20% faster than residences without solar panels.” Does that sound too good to be true? Let’s take a closer look.
How Solar Installations Increase Property Value
It stands to reason that any improvement that reduces utility bills will increase a property’s value, as the owners or tenants will benefit financially from energy efficiency and independence. Recent studies have proven this to be true. The New York Times reported on one study, sponsored by the Department of Energy, which found that “buyers were willing to pay a premium of $15,000 for a home with the average-size solar photovoltaic system (3.6 kilowatts, or 3,600 watts), compared with a similar home without one. Put another way, that translates to about four additional dollars per watt of solar power.”
Lenders such as Fannie Mae have issued guidelines requiring appraisers to analyze owned solar systems and local markets to determine the added property value, in a move that acknowledges the growing number of property owners who are choosing to invest in solar technology. Note that these studies and guidelines only apply to owned systems - more research needs to be done to determine the effect of leased solar systems on property values. And, of course, housing markets and energy costs vary by location and therefore individual property values must be evaluated based on these factors.
However, the overall effect of solar adoption is clear: property owners who invest in solar technology are making a significant, positive impact on their property’s value.
“One of the safest and wisest investments…”
CostofSolar explores the value of investing in solar panels, noting the guidelines set forth by the National Renewable Energy Laboratory, and finding that “installing solar panels is one of the safest and wisest investments you can make.” Here’s why:
A solar PV system has a lifetime of 25-30 years, during which time the property owner benefits from reduced (or sometimes eliminated) energy costs. As utility rates continue to rise, this benefit grows and monthly savings increase, often paying for the initial cost of the investment several times over.
Property owners who invest in solar technology can expect their home or commercial building to fetch a higher price (compared to comparable properties) when they decide to sell. This increase in property value may again cover the initial cost of the investment, resulting in a potential 200%+ return for owners who install solar systems. Not only do properties with solar features fetch higher prices, research has found that they can sell up to 20% faster than comparable properties that lack solar technology! As anyone who has sold property knows, the speed of the sale results in substantial benefits to the seller.
Property Buyers Benefit, Too!
The increase in property value resulting from solar investment isn’t just an advantage for those who own or sell the property - buyers benefit, too. There are many incentives that encourage buyers to pay a higher price for property with solar features. In fact, the seller’s incentives are passed along to the buyer upon purchase.
These buyer’s incentives include the ability to save on utility bills from day one by cutting the cord from utility companies, benefit from solar installations without paying the upfront costs for the technology and installation, and receive a higher purchase price when they eventually sell the property. Buyers also benefit from continually lower energy costs as utility prices increase throughout their time as owners.
Increase Your Property Value Now
It’s clear that property owners who invest in solar technology are making a significant difference in the value of their property. Savvy investors can also take advantage of local clean energy incentives or financing programs (such as PACE financing) to further increase the dividends of their property improvements. So what are you waiting for?
Solar Design Studio’s expertise in both commercial and residential solar installations allows us to tackle solar projects of any size. We understand how to approach each project’s unique challenges from design through installation, minimize up-front costs, and maximize our client’s return on their solar investment. Contact us today to learn more about how you can increase your property value through solar investment!
