Study Finds Solar Panels Equate With Higher Home Values
By Mark Jacobs, www.renewableenergyworld.com – October 21, 2011
In April, the Ernest Orlando Lawrence Berkeley National Laboratory released an illuminating report titled, “An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California.” The goal of this research was to uncover the impact of solar energy systems on the resale value of homes and answer the question, Can solar power for homes really payoff. Researchers looked at a large number of homes sold from 2000 through 2009. The brief answer to the question, “Do solar panel systems increase the market value of a home?” – is YES. While the exact dollar amount ranges, the average home retrieves $3.9 to $6.4 per installed watt of photovoltaic power. On average, a solar panel outfitted home fetches a premium of $5.5 per watt on the current market. So, if a home is for sale with a brand new 3,100 watt PV system, the seller can expect to add a $17,000 premium to the sale price of the home.
Why Do Homes With PV Solar Systems Cost More?
Some studies show that home buyers are willing to pay more for a house if the “carrying costs” are lower. They see that they will easily recoup the extra money paid within a few years of reduced electricity bills. Other studies find that some consumers, in general, are just willing to pay more for the social status of “going green.” The motivation of the seller to raise the cost is fairly obvious – to recoup the cost of the solar installation, of course. On average, the study found that homes retrofitted with PV systems paid $5/watt, while new homes with PV systems paid $4/watt. In many cases, home sellers were actually reluctant to raise the asking price, given the sluggish market conditions.
Does Size Matter?
Researchers looked at 40,000 PV system homes and 150,000 non-PV homes to see how much more the average PV system home brought in and what characteristics a PV home vs. a non-PV home had. They found the average non-PV home sold for $584,740, compared to the average PV home which sold for $660,222. Researchers admit that the average PV home happens to be younger by two years, bigger by 200 square feet, has 0.3 more bathrooms and 0.06 more acres, and has a 3,100 watt / 1.5-year-old photovoltaic system – so there are multiple factors that could account for the $75,482 price difference. Researchers note that, most telling of all, was the finding that the average PV home appreciated by 3.2 percent, whereas the average non-PV home depreciated 1.4 percent. It seems that homes that incorporate solar panel systems into their layouts are on the cutting edge and viewed as more valuable to their overall communities.
The Lawrence Berkeley National Laboratory did an excellent study on this in California, however there is information that can be carried nationwide.