home appraisal with solar panels are often higher than properties without solar ownership
Solar energy is still a relatively new technology for people, and as such, a majority of people are not fully aware of the benefits and incentives that accompany a solar system. This article will take you through the property value advantages of going solar and will answer the question, “Can I get a higher home appraisal with solar panels?”
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Will solar energy ownership lead to a higher home appraisal with solar panels?
It is common knowledge that installing solar panels and batteries in your residential or even commercial property can raise the value of the property, and a majority of homeowners, buyers, real estate agents, and appraisers are aware of this fact. As such, it is not a matter of whether solar panels increase property value but rather how much they increase the value of a property.
As a matter of fact, according to the National Renewable Energy Laboratory (NREL), for each $1 of savings your solar energy system generates, the market value of your home will go up by $20. Furthermore, you will not only observe a growth in your home’s value but having a solar panel system will also help you sell your home 20% faster than homes without it.
When you’re ready to sell your property, your system will also make it so that your home appraisal with solar panels will be valued at a higher price than other non-solar homes.
With that said, installing solar panel systems is one of the best investments a homeowner can make. Your solar energy system will, within a few years’ time, pay for itself, after which it will enable you to earn consistent savings on your utility bills. Finally, when you’re ready to sell your property, your system will also make it so that your property goes for a higher price than other non-solar homes.
By how much will my home appraisal with solar panels increase my potential asking price?
Now that we have answered the question, “do solar panels increase property value?” We can move on to evaluate just how significant this increase is. According to the findings of various studies, installing solar panel systems on your home can increase the resale value of the property by $4,020 to $5,911 on average. This means that installing a typical 5kW residential system can boost the resale value of your home by nearly $30,000.
A survey conducted by Zillow reports that homes that have solar panels tend to have a 4.1% higher appraised value compared to properties without solar panels. This is, of course, an average value and will vary depending on certain factors.
A survey conducted by Zillow reports that a home appraisal with solar panels tends to have a 4.1% higher estimate compared to properties without solar panels.
For instance, some locations, such as Riverside, California, observe a more modest value bump up, around 2.7%, in the value of a home on installing solar panels, while other locations such as New York City have a larger value add of around 5.4%.
To put things into better perspective, the table given below gives a rough estimate as to how much value certain solar energy system capacities will add to a home on average compared to the cost of the system. That is to say, this data should provide an idea of the value added to a home appraisal with solar panels.
|Size of Solar Energy System||The average increase in the value of a home||The installation cost of the system after factoring in tax credits|
One can clearly see that the average increase in a home’s value by installing solar is much greater than the cost of the system itself. Additionally, the greater the size of the system, the greater the difference between the increase in the home’s market value and the installation cost of the system.
Factors That Determine How Much Higher Your Home Appraisal With Solar Panels Will Be Estimated
While the figures presented above may give you a general idea of how much value solar energy can add to your home, it is important to remember that these are just average values that will vary depending on certain factors. Explained below are some of the factors that decide how much value solar energy adds to your home.
The cost of utility varies depending on which state you belong to. Generally, the higher the cost of electricity, the greater the value added to your property as a result of solar energy. Furthermore, the amount of sunlight exposure you receive, as well as the social benefits of installing solar panels, are also influenced by your location, which in turn will determine how much value is added to your property.
The cost of utility varies depending on which state you belong to. Generally, the higher the cost of electricity, the greater the value added to your property as a result of solar energy.
Local Solar Installation Prices
The cost of installing a new solar energy system in your area is another factor that is influenced by which state you are located in. In case you are located in an area where the installation cost of a new system is high, so much so that it would be more cost-effective for a buyer to purchase a home already equipped with a solar energy system instead of a non-solar home and make it solar. Your solar energy system will be more effective in increasing the value of your property.
As is evident from the table given above, a larger system that generates a greater output will help appreciate the value of your home much higher than a smaller system. However, this does not by any means entail that an average American home should strain their budget and get a system that far exceeds their energy requirements just so that their home appraisal with solar panels will be higher when selling. In fact, your roof might not even have enough space to accommodate a larger system.
This does not imply that one should strain their budget and get a system that far exceeds their energy requirements just so that their home appraisal with solar panels will be higher when selling.
When selling a house that has an older system on it, the increase in the resale value of the home will not be as significant as it would’ve been with a new solar system. This is so because solar energy systems tend to depreciate in value as they age.
This depreciation can primarily be associated with the buyer’s need to make repairs or replace system components in the near future due to the prolonged wear and tear that will have occurred through years of usage. This would not have been a problem with a newer system.
When selling a house that has an older system on it, the increase in the home appraisal with solar panels will not be as significant as it would’ve been with a new solar system.
System Replacement Value and Difficulty
Along the same lines as the age of your system, the cost or difficulty of replacing and sourcing the components of your system has an impact on the overall value the system will contribute to your home.
Naturally, a system that is more difficult and expensive to repair due to the unavailability of parts will not be very effective in enhancing the resale value of your home. However, you’ll be glad to know that with the rapid growth of solar energy in the US, parts availability of any system should not be a problem regardless of which state you’re located in. The cost of repairs, however, will likely vary from one state to another.
Conclusion on how a home appraisal with solar panels is often higher than homes that do not own solar energy systems.
Among the many advantages of going solar, one of the most tempting one for homeowners is that their solar system can substantially appreciate the value of their property. Even better is the fact that depending on your state, you may not even have to incur higher property taxes. With that said, now is the best time to go solar!
If you have further questions on this topic, check out our Solar FAQs. And, as always, feel free to reach out to Firefly Solar with any questions.