With recent increases in power tariffs globally and decreasing solar panel prices, there is more interest in people adopting home solar technologies.
This is principally because solar electricity offers a reliable way to alleviate erratic traditional power supply.
However, the question remains, do solar panels really increase a home’s value? Let’s dig deeper, shall we?
What are home solar panels?
Before we get ahead of ourselves, let’s revise some elements. Solar panels are composed of multiple solar cells that are connected (assembled as a pre-wired unit) to form a PV module that converts light into AC energy.
We usually measure this energy in kilowatts.
Overall, most home solar systems are assembled as an array of solar panels attached to the home’s roof.
Read: Benefits of residential solar panels
Can a home be 100% solar?
A resounding yes! Solar energy can fully power an entire home. However, some factors have to be put into consideration. For instance, how much energy one uses in their home and how much sunlight hits one’s roof regularly.
Fortunately, solar technologies are continually advancing in their state-of-the-art, with battery storage challenges being constantly tackled innovative in new ways. And since it’s an evolving scientific realm that will become more efficient as time progresses, we can expect the ability to have a home purely driven by solar to reach new heights.
However, while going fully solar-powered presents a magnitude of benefits, it isn’t suitable for every household. For those whose energy needs cannot be fully satisfied with solar, the option of going partially solar-powered still remains.
Read: Solar products for home
What are the benefits of a house with solar panels?
The main benefits of a house with solar panels are tax incentives and rebates, lower carbon footprints, lower electric bills, lower maintenance costs, and potentially higher home values. Furthermore, these benefits usually come with sizeable initial installation and maintenance costs. However, these can be recouped with outweighing long-term benefits.
Read our article on “Pros and cons of home solar panels.”
Do solar panels increase home value?
This question really depends on multiple factors. For example, the price of solar panels,
especially if an owner moves from their home soon after installing their system.
However, the general consensus amongst real estate agents is that houses with solar panels tend to carry a premium on the market.
This is because they offer new buyers a chance to not only save big on electricity every year, but also reduce their carbon footprint whilst avoiding the impact of unpredictable future utility rate increases.
Having established this, the subsequent question is, by how much do solar panels increase a home’s value?
By how much do solar panels increase home value?
According to data from the National Renewable Energy Laboratory, every dollar saved on energy through the deployment of solar panels increases home value by approximately $20 for every dollar saved on annual energy costs.
Zillow’s research surveys suggest that homes with solar panels sell for about 4% higher on average than homes without solar energy. However, there are a lot of unaccounted-for variables to consider with these estimates—for instance, the size of the solar energy system.
Do solar panels hurt the resale value of your home?
Typically, home buyers consider monthly electric bills when assessing the long-term financial value of a home. This means that they are increasingly open to paying a premium for a solar-ready home.
As such, solar panels do not hurt the resale value of a home due to the cheaper energy they provide. But rather, they are typically seen as a welcome home addition like a renovated kitchen, or jacuzzi.
Do solar panels increase property taxes?
The average solar panel system can add approximately $15,000 in value to a home by all fair estimates. In turn, this increased value could add to your annual property tax bill depending on your property tax rate.
However, this largely depends on country, state and local property tax codes.
Solar panel appraisal value
There are there approaches one can employ to value residential solar panels. These are namely: an income approach, a cost approach, and a cost comparison approach.
Generally, an income approach is best-recommended approach since it estimates the value of the energy cost benefit.
The income approach revolves around added value on the projected income that an installation could generate for the homeowner over the solar system’s expected lifespan.
Solar home value calculator
To accurately calculate how much solar one would need, it’s advisable to employ a solar calculator. In practice, a solar home value calculator can help one to quickly determine their expected property value increases with a solar installation.
Generally, most solar home value calculators take into account the following variables to give an individual an accurate estimate of their potential installation costs and solar savings, namely:
- Their available roof space.
- Available solar incentives.
- Their utility company’s electricity rates.
- Solar number score of the building.
In conclusion, solar panels appreciably augment a home’s value after the initial investment of installation. And when new owners later purchase the same house, they also benefit from energy savings and lower electric bills. All whilst helping conserve the environment.