Do Solar Panels Increase Your Homes Value? (Short Answer, YES!)
California became the first state to require all new homes to have solar panels, which really puts into perspective how far the entire renewable energy industry has come! With the trend towards a sustainable future becoming more and more apparent every day, it seems like a matter of time before every home in the US goes solar. While most people seem to know the benefits of a solar-powered home there may be a few lingering questions, including:
Do Solar Panels Increase Your Home Value? The short answer is yes, as long as you install high-quality tier one panels on a significant portion of your property.
The exact dollar amount your home value will increase obviously depends on your unique home; however, there are a number of other factors from location, to age, home size, incentives, and other factors. Read below to find out all the details of what exactly goes into how solar panels affect your property value and what you can do to get the most out of your installation.
How Solar Panels Increase Property Value
Around a decade ago when solar was just starting to take hold and slowly changing public perception, the masses still weren’t completely sold on the idea. Well, a lot has changed since then! Sure you still have doubters and naysayers but when it comes down to cold hard facts you just can’t work around the fact that solar energy is a safe, sustainable, and cost-friendly way to power your home.
The real question has become whether or not installing solar panels will increase your property value and if so how? Unfortunately, a few agents, lenders, and even appraisers are still stuck in the early 2000s and don’t often see the value in installations. Thankfully, there are less and less of these doubters by the day and with solar, you can prove its value especially when you have quality panels.
You would expect that whatever the cost of your installation was then your home value would at least increase by that much but unfortunately, that isn’t always the case and there are a number of factors that may impact that. However, for the most part, the average mid-sized home in California could see their value go up to $18,000 and $29,500 with a 1kilowatt (kW) and 5kW installation respectively. The nationwide average increase per home is around 4.1%, so on a $300,000 home that would be an increase of $12,300… now that’s an investment!
Let’s go over some of the factors that help increase your home value when it comes to solar energy.
- Neighborhood and Location
- Net Metering and Grid Connectivity
Let’s go through each one individually and find out more about the 5 factors that impact how solar determines your home value.
Age is a huge factor when it comes to sustainable energy in general because the industry is so cutting edge that innovations are being made across various companies around the world on a daily basis! The good news is that solar panels are getting more and more efficient, cost-effective, and aesthetic year over year. The bad news is that the solar panels of ten years ago just don’t measure up to some of the tier one quality panels of today.
That being said, if your installation is fairly new, so less than five or six years, then you should expect your home value to go up. Besides, you also have to consider the warranty. Most panels have a 20 to 25-year guarantee so if you installed them 15 years ago, how motivated is a potential buyer going to be over an extra 5 years? They would probably have to install new panels altogether.
Think of your solar panels as any other part of your home, if they get old or out of date then you will have to change and update them to make your home that much more desirable.
Solar quality will really make or break your home value. It would be higher up in the list but age kind of plays into the idea a bit so quality comes in at number two. The better quality of your solar panels the higher your home valuation will be… it’s simple math really. Premium panels will generate more energy per coverage and you will likely make back your initial investment much sooner. You wouldn’t want to buy some home with panels that barely support the dishwasher now, would you?
At KNS Solar we pride ourselves on our premium quality Tier 1 solar panels that are always ahead of the game and in touch with the current innovative technologies in renewable energy.
Location, location, location! Sure a beachfront property will likely fetch a higher price than a home on a noisy freeway but your home’s location also matters in terms of how solar panels will impact its price… ok, let’s break that down.
Location matters for two reasons:
- Your neighborhood
- The weather
Some neighborhoods value renewable energy much more than others. For example, New Jersey is a high active solar market and they value panels much higher than other towns, cities, and even states. So if you are located in a solar-friendly location, then your appraisers, buyers, and lenders may appreciate your installation more.
Climate is also important since many places just don’t get a lot of direct sunshine. So if you live somewhere with a lot of rain and little daylight, then your home may not be valued as much as say a property in Nevada.
4. Grid Connection and Battery Storage
The old adage “getting off the grid” doesn’t really apply to solar panels because most panels are grid-connected. Now, this doesn’t mean the government is tracking you! Being connected to “the grid” is actually beneficial in this case.
Solar energy is an available energy source. Meaning that unlike traditional sources derived from fossil fuels, you can’t harvest the energy of the sun in a barrel… no matter how cool that would be. Instead, you have to use solar energy as it is being produced during daytime hours. That is of course unless you are grid-connected or have a solar battery in which case you can do what is known as net metering or battery storage respectively.
Net Metering is a process by which you send excess solar energy to the grid and are then able to later access said energy when you need it during any time of the day! Essentially you send your energy to the grid who then supplies it back to you when you need it more urgently. Having a grid-connected installation is obviously a major plus and a huge factor that contributes to the higher valuation of your home. Similarly, if you have a battery bank than you can actually store a certain amount of energy in your own home. Luckily, at KNS Solar we install solar battery banks so you can always have available energy and of course this also increases your home value.
5. Doubt and Belief
At the end of the day, we don’t determine our home value and we don’t give out loans. Unfortunately, when it comes to selling or buying a home the valuation lies in the hands of the appraisers and the lenders. Hopefully, you can communicate the above-mentioned benefits of solar panels to your agent and show the data to support why your high-quality solar installation is worth a definitive home value increase.
Of course, really it comes down to belief. The good news is that most realtors and lenders have become increasingly more aware of the value a solar installation brings to the table. So rest assured, you should get a good deal!