Study: Homes with Solar Panels are Valued Higher at Resale
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One of the big challenges for residential solar power has been demonstrating that homes with solar panels deserve a premium price compared to similar homes without them.
A new study from the Lawrence Berkeley National Laboratory demonstrates that homes with solar panels are worth more in the marketplace. That's big news for homebuilders and owners that felt like the value of their solar photovoltaic systems weren't represented in appraisals and mortgage valuation.
According to the Department of Energy’s SunShot initative, the number of homes with solar energy systems is expected to pass 1 million this year. DOE’s Solar Training and Education for Professionals funding program provides real estate agents, code officials, insurance and financial professionals, and firefighters with the basic solar training they need to do their jobs.
The U.S. Department of Energy reviewed the study and its findings in a recent blog post. Read more below:
When appraising or selling homes, real estate professionals carefully account for upgraded features in order to build the best sales pitch possible. Common home renovations like new kitchens and finished basements are a known boost to home valuation and the resulting home sale. Recent research from Lawrence Berkeley National Laboratory (LBNL) funded by the SunShot Initiative has revealed that customer-owned solar photovoltaic (PV) systems provide similar benefits to home sales as these more common upgrades. Two recent studies, including this report from LBNL, showed that homeowners across the country have been willing to pay a premium for a solar home that reflects the value of the solar system, which was about $15,000 for a home with an average-sized, resident-owned solar array. Although market factors like electricity rate and system price may impact the size of the premium, solar homes can be expected to sell for more than homes without PV.
Solar systems not only increase the value of a home, they also increase the speed with which a home is sold. Evidence indicates that homes with PV spend less time on the market than those without. In 2008, California homes with energy-efficient features and PV sold faster than homes that consumed more energy. In Denver, homes with solar were also sold more quickly than homes without. This evidence indicates that a solar home, when properly valued, tends to land a buyer more quickly than a home without solar.
Meanwhile, the number of households with solar energy systems in the United States is expected to surpass 1 million this year. With this robust number of PV homes and a fast-growing market for additional solar installations, an ever-increasing number of solar homes will likely be sold or refinanced in the coming years. However, even though homes that include resident-owned solar PV systems sell faster and for more money than homes without solar, most real estate education classes barely touch on solar energy, if mentioning it at all. As solar energy becomes more common on rooftops across America, it’s vital that real estate agents and appraisers learn more about how to appropriately value solar and what effect solar systems have on home values, so they can leverage the premium-boosting power of a solar system to sell or refinance these homes.
Read more about home solar power.
Companies: U.S. Department of Energy