One of the biggest expenditures that most people will make at some point in their life is the purchase of a home or other real estate.
Because so much money is exchanging hands, it is important for homeowners to either maintain or even raise the value of their home in a variety of ways. One of the most interesting ways in which homeowners have increased the value of their homes as of late is through the addition of a home solar system. Solar energy is more popular than ever and it is beginning to take hold in the residential space. This has been shown to raise average asking prices higher than similar homes without solar.
So, since so many homeowners are asking “Is solar worth it?”, how exactly can solar help to increase the value of your home?
- Your Home Will Be Appraised At A Higher Value
- Potential Buyers Can Be Sold On Lower Energy Bills
- Solar Is An Purchase That Returns Dividends For Decades
- The Value Of Reducing Greenhouse Gas Emissions
- State Incentives Transfer To New Homeowners
Your Home Will Be Appraised At A Higher Value
Almost every aspect of your home is taken into account when it gets appraised to be put on the market for sale.
This includes things like the age of the home, square footage, number of bedrooms and bathrooms, and other external features like the size of the lot the home sits on or even the addition of a pool. Likewise, having a solar installation on the roof of your home or located on your land will increase the total valuation of the home as well. Not only does the physical equipment that go into a solar array get noted but also the future value of all of the energy that it can generate can be taken into account. When these two numbers are combined, homeowners are happy to see the boost in retail value of their homes. While solar often makes the most sense for homeowners seeking to stay in their home for a long period of time, rooftop panels can still add this solar home value to your home decades down the road.
Potential Buyers Can Be Sold On Lower Energy Bills
One of the biggest benefits of a home solar power system is that it can reduce the monthly energy bills of the owners year round.
Although this may be less than one hundred dollars a month in savings, this value quickly begins to grow as you look at someone who may live in the house for decades to come. For example, for someone who will live in a home for the next 25 years, even a small solar pv system can produce an eighty-five dollar per month energy bill savings which represents a total savings of up to $25,000 for the entirety of their stay. Even larger systems can further raise this figure. These calculations can help justify a slightly higher asking price when a homeowner goes to sell their home. All real estate has operating costs and any means by which these costs can be lowered are a great selling point for buyers. Additionally, a major selling point to potential buyers will also be that these lower power bills every month will mean that more money is free in their budget to spend on other, more enjoyable, purchases. From an income approach, lower bills help to make your take home pay stretch even further every month.
Solar Is An Purchase That Returns Dividends For Decades
While may home buyers see a house as the single largest purchase and investment they will ever make, a solar energy system can help sweeten the pot by explaining to them that it is an investment in and of itself.
Modern solar panels are showing useful life spans up to 35 years. This means that after 35 years, some panels are still able to produce upwards of 80% of their initial power rating. This is largely because of degradation factors that have slowly but surely been going down over time. As of late, it is not unheard of to see solar panels degrade by less than one half of one percent each year. So, not only does your home have an innate value, but also the investment in a solar power system on top of your home has its own additional solar home value and savings stream for more than three decades. The combination of these two assets together can greatly improve asking prices for homes in any area of the country. From an income approach, solar allows your dollars to go further.
The Value Of Reducing Greenhouse Gas Emissions
In an ever more environmentally conscientious world, consumers are speaking their mind with their dollars. More frequently than ever, consumers are willing to pay slightly more to reduce their carbon footprint and do the right thing to preserve the environment around them. A solar panel for sale allows homeowners to knowingly remove carbon emissions from the atmosphere for decades to come. This fact helps to place a higher value on homes that have taken steps to reduce the total energy consumption that they require to operate. This includes, but is not limited to, things like a home solar system, energy efficient appliances, and energy efficient lighting throughout the home. Home buyers will be much more likely to purchase a home if they know that it can reduce their carbon footprint and the additional good that the purchase can do for the environment.
State Incentives Transfer To New Homeowners
Whether you seek a purchase agreement or a solar lease, solar can make economic sense. Many states have created a tax credit or other programs which are designed to incentivize the implementation of solar systems.
This tax credit can reduce the cost of a solar panel for sale by as much as 30%. The other incentives often come in the form of a renewable energy credit (REC). These REC’s are digitally generated for every 1,000 kilowatt-hours of electricity that home solar systems generates. These REC’s can then be sold to a utility company which is legally required to meet a mandate to procure renewable energy set up by the state legislature. This utility company must by these REC’s or else they can face fines from the state. The value of REC’s fluctuates over time much like a stock price does. As a point of reference, the current Solar REC in New Jersey sells for roughly $225. Assuming the average home uses roughly 11,000 kilowatt hours per year, a solar system that meets all of the home’s energy usage can generate an annual SREC value of almost $2,500 per year. When homes are sold, the environmental attribute almost always moves over to the new homeowner unless a special arrangement is made prior to the sale. By combining both a tax credit and environmental attributes, homes with solar panels can generate additional savings for years to come if they go the route of a purchase agreement.
Solar can greatly add to the total value of the home. In fact, homes with solar panels are always valued higher than identical homes without rooftop panels. While it is still up to the owner to ask themselves, “Is solar worth it?”, there are many cases when it makes sense to reduce your carbon footprint with solar pv or a solar lease. By becoming informed about the many benefits, both environmental and economic, of a home solar system, a homeowner can expect to see a larger final sale price when it comes time to put their house on the market.