More than two million households have solar panel installations. It’s an advancement that grows daily in popularity for its benefits. It saves on your utility bills and reduces pollution, for example. But when you have a solar powered system installed at your home, does it help or hurt your home’s value? Here’s what you need to know about how solar panels affect your home’s value.
Owned Solar Panels Increase Your Home Value
If you own solar panels, they increase your home’s value, not hurt it. With the capacity to bring your home’s energy consumption to net zero, it’s a surprise there aren’t more households lining up to have solar installed.
The reasons are clear that owned solar panels increase your home’s value:
Solar panels reduce operating costs. The whole purpose of installing solar energy is to reduce your dependence on the electricity you must purchase. With an installed solar panel array, you can reduce your energy bill to zero, or close to it, depending on the size of the installation. That’s a major attraction for solar energy, and it improves your home’s value.
They’re environmentally friendly. An eco-friendly property is more attractive to home buyers today. When property appraisals are performed, the market value improvement is taken into consideration, boosting your home’s value.
It’s an investment in technology. If you have a whole home audio system installed, the same principle applies. High-tech homes are valued higher, simple as that.
Do Solar Panels Cost More than the Value Increase?
If you own your home from 20 years or more, you could save from $10,000 to $30,000 on electricity costs with solar panels. However, you need to own your home long-term to realize that benefit. The upfront costs of installing a solar panel system ranges from $10,000 to $28,000.
Also, owned solar panels increase a home’s value by around 4%. That means a home worth $250,000 before the installation will only see a value increase of $10,000. It could take many years for the cost benefit to be realized back in savings.
Leased Solar Panels Could Drag Values Down
On the other hand, leased solar panels could pull your home’s value down. Although the benefit is the same, it can be seen as a monthly obligation (much like any other utility bill) and that can be a deterrent for shoppers. In that instance, your home’s value on the market could be lower than if you didn’t have solar panels, even though your electricity costs are lower.
Some Home Buyers May Not Be Interested
One thing to keep in mind is that solar panels aren’t understood very well by the public. As with most tech people don’t understand, it can scare them away. Whether it’s an appraiser, realtor, or home buyer, a solar power array can be a complex monster they just don’t want to deal with.
Better Home Value in Certain States
Home value increases also vary depending on where you live. For example, the greatest home value increase when you have solar panels is in New Jersey, where it boosts your value by as 9.9% on average. That’s followed by Pennsylvania (4.9% increase), Louisiana (4.9% increase), North Carolina (4.8% increase), and Washington (4.1% increase.)