Do Solar Panels Increase Home Value? Getting The Whole Picture
If you’re like many homeowners, you’re probably wanting to make improvements that will boost the value of your home.
You love the idea of slashing your electric bill — and making a positive contribution to the environment — and have been considering adding solar panels.
While you know there are many great benefits to going solar, you’re wondering if solar energy increases the value of a home.
We share our years of experience in the sale of homes with solar, including answering the question, “Do solar panels increase home value?” and what to consider before making the call.
Table of Contents
- Does Solar Really Increase Home Value?
- 7 Factors That Affect Whether Solar Panels Increase Home Value
- Do Solar Panels Increase Property Value? The Bottom Line – Are They Valuable to the Buyer?
- Do Solar Panels Add to the Value of a House vs. Do Solar Panels Make a Home More Salable
- Contact PEGGY HOAG REAL ESTATE to Buy or Sell a Home With Solar Panels in the Greater Portland Area
Does Solar Really Increase Home Value?
Does solar energy increase home value? The bottom line is that solar panels do not increase the home’s value, but they do make it more salable. Solar makes the operating expense of the home considerably less.
What it boils down to is whether solar panels are considered valuable to the buyer. Some buyers want them, while others don’t.
7 Factors That Affect Whether Solar Panels Increase Home Value
#1: Geographic Location
Every community has different electrical rates — and the higher your electrical cost, the greater the value of your solar panels.
Your location can also influence the amount of sun exposure you get, with the sunny locations in the southern portions of the United States being particularly beneficial for solar.
And depending on the part of the country you’re in, due to the popularity of solar power, the social benefits of installing solar power may also be greater.
#2: Cost of Installation
Another factor to consider as you’re trying to determine if solar panels increase house value is the cost of having them installed.
Besides the cost of the system itself, one of the major expenses in going solar is the installation of the panels. Due to the tremendous growth in the solar industry over the past few years, the cost of solar systems — and installation — has dropped significantly.
It’s important to note that the savings you experience long-term will make up for the upfront cost of installation.
#3: Solar System Type and Size
The cost of a solar system will vary depending on the size and type of system you choose.
According to the National Renewable Energy Laboratory, a 2-kilowatt system should offset the electricity usage of an average-sized home and generally costs around $8 to $10 per square foot. That means if you have a 2,000-sq-ft home, the cost will be between $16,000 and $20,000.
You’ll also want to factor in Oregon’s homeowner’s rebate of up to $5,000 for a solar electric system and up to $2,500 for an energy storage system.
#4: Solar System Life
As with many energy systems, the older a solar system is, the less efficient it will be.
Once they reach the 20-year mark, solar panels generally start producing less energy — decreasing a portion of the value associated with them.
However, this is really no different from many other attributes of a home. For instance, an HVAC system generally needs to be replaced after 10 to 15 years, but in many regions, air conditioning is still highly valued and people are willing to pay a premium to have it.
#5: Solar System Replacement Value
In addition to the costs of installing solar panels, there are further costs associated with their operation and maintenance, one of which is their replacement.
Solar panels generally need to be replaced after 25 to 30 years of use.
The expense, along with the ease or difficulty involved in obtaining the needed parts, will affect the overall value of a solar system.
#7: Solar Panels and Taxes
What about taxes? When you factor in taxes, does home value increase with solar panels?
There are a couple of factors to take into consideration when it comes to solar panels and taxes.
State and federal governments offer solar tax rebates and incentives. For example, the solar investment tax credit (ITC) through the federal government offers a 26% credit on the installation of residential solar systems.
Many states offer exemptions, meaning that when you install a solar system in your home, your property taxes don’t rise.
Do Solar Panels Increase Property Value? The Bottom Line — Are They Valuable to the Buyer?
The fact is, the value is determined by the buyer.
If a buyer so chooses, they can use their solar power to operate much more than just their home. For instance, they may decide to power their…
- Cars
- Well
- Barn and outbuildings; or
- Guest home
… with solar power, potentially seeing huge savings.
Do Solar Panels Add to the Value of a House vs. Do Solar Panels Make a Home More Salable
At PEGGY HOAG REAL ESTATE, our experience is that solar panels enhance the salability rather than actually adding substantial value.
In the end, a home with solar panels will probably not sell for more, but solar panels can make the home easier to sell.
Contact PEGGY HOAG REAL ESTATE to Buy or Sell a Home With Solar Panels in the Greater Portland Area
PEGGY HOAG REAL ESTATE has been helping guide real estate clients in the greater Portland, Vancouver and Columbia Gorge for 30+ years.
We specialize in luxury properties of all types, including:
- Solar homes
- Luxury homes on acreage
- Corporate retreats
- Vineyards
- Equestrian
- Waterfront properties
- Mountain homes
- Ranches
- Mid-century classics
- Pre-circa 1939 Portland mansions
- New construction
- And more
If you are looking for a luxury real estate experience, PEGGY HOAG REAL ESTATE is the right choice for you.