Last Updated on December 27, 2022 by Anne Brock
Often, when people think of the savings they can enjoy with solar power, they only consider the cheaper monthly energy bill. Homeowners sometimes forget to account for the fact that owned solar panels can also dramatically increase their property value and subsequent equity. They add equity to a home and, in turn, offset some of the initial cost of purchase.
When crunching the numbers to decide if it’s worth the investment, solar panels’ added value is a crucial aspect to consider. If you fail to calculate their impact on your property’s resale value, you’re not accurately measuring how much they can bring to your home.
How Much Do Solar Panels Increase Property Value?
According to a recent study conducted by Zillow, homes with solar power added an average of 4.1%, or $9,274, to the property’s value. Solar panels’ impact on a given property depends on the market location — for example, solar-powered homes in New York saw a 5.4% premium increase compared to non-solar counterparts in the study, while homes in Los Angeles saw a 3.6% premium increase.
Many homebuyers recognize solar panels’ remarkable ability to reduce their home energy expenses and their carbon footprint. That’s why they are willing to pay an additional premium for a home with a solar array installed.
The same Zillow study found 80% of home buyers consider energy efficiency a crucial consideration when buying a house. A home with upgraded windows and insulation can fetch a higher price for the same reasons — these are all different solutions to the same problem!
How Much Equity Does Solar Add?
Do solar panels add value to a home? Do solar panels devalue your house? Many factors influence the answers to these questions. As you now understand, a solar panel property’s housing market is a significant determinant. A home in an area where people are more interested in solar energy and environmental responsibility can net a correspondingly higher selling price than one in a market with low demand for solar panels.
Here are some other aspects that might influence your decision to invest in solar panels.
- Average weather patterns:Markets that tend to receive more sun and less cloud cover will command higher premiums for homes with solar panels than locations that are frequently rainy and cloud-covered.
- Size of the property’s panel installation: Larger installations may draw more power and provide better long-term value propositions to a prospective homebuyer than a two-panel setup.
- Utility costs: One less intuitive influence on a solar panel setup’s value is the cost of energy in that region. Homebuyers seeking to purchase a home in an area with characteristically high electricity bills may better understand the value proposition of defraying those costs with solar panels. Since solar energy is 100% renewable, your panel installation can significantly reduce your energy bills or eliminate them.
- Rebates and incentives: Depending on where you live and your solar panel installer, you may be eligible to get money back when getting solar panels installed on your property — this added push can also increase the premium the solar panel installation commands.
Owning vs. Leasing Solar Panels
There’s one more critical consideration in understanding how solar panels might affect your house’s value — the difference between owning and leasing your panels. When you lease solar panels, they don’t belong to you. This arrangement may be less expensive upfront, but the downside to adding solar panels this way is that you can’t take advantage of solar panel appraisal value.
If you have your property appraised, the assessor won’t consider the leased solar panels in your home’s valuation. Pursuing leasing options still lets you take advantage of the energy savings solar panels provide, but you can’t factor them into your overall property value.
Get Started With Solar Alliance Today
If you’re looking to save on your energy expenses and increase your home equity, we’re ready to design, build and install the perfect solar panel system for your property. At Solar Alliance, we provide accessible, affordable renewable energy solutions to residential, commercial and industrial property owners in Tennessee and Kentucky.
You can rely on our engineers’ and installation specialists’ expertise to provide the highest-quality solar panels that will help you enjoy utility savings and reduce your energy footprint for years to come.
Contact us today to take control of your energy bills with a clean and effective solar panel installation!