Solar panels are a fantastic source of renewable energy, as well as a great way to save a chunk of change on your monthly electrical bills. Upfront, however, they are an investment, and if you’re thinking about purchasing a solar panel, you may be wondering if they’re worth the thousands—if not tens of thousands—of dollars they often cost.
Solar panels are a great way to reduce electricity costs while benefitting the environment. However, another primary benefit of installing solar panels on your property is their ability to increase the home’s overall value. Various factors, such as the property’s location, energy savings and the general appeal of solar energy to potential buyers, can influence the extent of this value increase.
In fact, a recent study by Zillow found that homes with solar panels sold for around 4% more than those without them.
How Does Solar Increase Home Value?
According to the National Renewable Energy Laboratory, every dollar that a solar panel saves you on your electrical bills increases the value of your home by $20. And according to Zillow, homes with solar panels sell for four percent higher than those without them.
Currently, the demand for solar panels is higher than it ever has been, with home-buyers becoming increasingly environmentally conscious while wanting to save money. It is this demand that often increases the value of homes featuring solar panels. Whether and by how much your home’s value will increase, though, will depend on where you live and the quality of your solar panel.
Location
It is no secret that the location of your home can significantly impact your property’s value. Therefore, the value of homes with solar panels certainly increases depending on their location – especially in areas with abundant sunlight and high electricity rates. Plus, if your home is in a region or neighborhood that emphasizes environmental sustainability, homes with solar panels can enhance a home’s perceived value. Not to mention, depending on your location, government incentives and supportive policies also play crucial roles in increasing the desirability of solar-equipped homes.
The states where solar panels are most in demand are California, Colorado, Massachusetts, New Jersey, New Mexico and Oregon. The cities where solar panels are most in demand are Los Angeles, San Diego, Honolulu, Phoenix, San Jose, San Antonio and New York. If you live in one of these areas, there is a good chance that solar panels will increase your home’s value.
Electricity Rates
One of the most important factors in determining the value of solar panels for homeowners is the price of electricity. Solar panels can substantially reduce energy expenses, resulting in a lower electricity bill and making it a financial incentive for potential buyers. This can enhance a property’s market appeal and potentially lead to a higher home value.
Solar Panel Ownership
When purchased outright, solar panels can be easily transferred from the home’s seller to the buyer. However, if you’re leasing your solar panels, you’ll need to work with the solar company to establish who will take ownership of the panels. Typically, the buyer can take over the solar system by buying the lease out or transferring it. However, when selling or buying a home, it’s essential to keep track of who has ownership rights over them to avoid confusion and potential legal issues later on.
Solar System Condition
While they may not be top of mind when you think about the value of a house, solar panels can significantly impact property value. Therefore, ensuring they are in a well-working condition is essential. The solar system’s condition is important since it directly affects its efficiency, functionality and lifespan.
Well-maintained and properly functioning solar panels are more likely to attract potential buyers and contribute positively to the property’s overall worth. Regular maintenance, including cleaning and inspection, helps to ensure the panel’s performance and longevity. Damaged or outdated panels can decrease efficiency, reducing energy production and increasing potential repair costs. Therefore, keeping solar panels in good condition maximizes their energy-generating potential, ultimately increasing the property’s value.
How Much Can You Save With Solar Panels?
Solar panels notoriously help you save money on your electricity bills, but how much can you really save? It depends on various factors, including your solar system’s size and efficiency, location, electricity rates and available incentives. Here are the key factors that determine potential savings:
- Solar energy system size: The size of your solar panel system directly affects your energy savings. A larger system can generate more electricity and offset a higher percentage of your energy bills. It is recommended to consult with a professional installer to determine the appropriate system size based on your energy needs.
- Energy consumption: Your current energy usage also plays a role in determining how much solar power you need. A larger solar system can lead to greater savings if you have high energy usage.
- Sunlight availability: The amount of direct sunlight your location receives impacts the efficiency of your solar panels. Regions with more sun tend to generate more electricity, leading to greater savings.
- Electricity rates: High electricity rates are a good reason to install solar panels. Because it’s a renewable energy source, you can offset more expensive energy with solar power. However, even in lower-interest areas, solar can still provide significant savings.
- Incentives and rebates: Some regions offer solar incentives, tax credits or rebates for solar panels. These solar incentives can significantly reduce the upfront cost of your solar system, improving your return on investment.
