How To Increase The Value Of Your Home By Switching To Solar

Out of the many upsides of switching to solar, perhaps the most notable is how much it can contribute to your home’s overall value. Maybe you weren’t aware of this perk, but the truth is, your solar panel system’s contribution to cleaner energy is something in which future home buyers will definitely want to invest.

Of course, you might be wondering, “How much can solar panel installation really increase my home’s value?” Or you might be curious about which factors make it so the value of your home can go up via solar. Here’s what you need to know about how investing in solar energy can give back to you.

How Does Solar Energy Increase a Home’s Value?

One important fact to know right off the bat is that people are willing to pay more for a home with a solar panel system already installed. Actually, according to the Office of Energy Efficiency and Renewable Energy (EERE), people will pay upwards of $15,000 more for a home powered by solar energy. This is not only due to the fact that the upfront costs of money, time, and effort that come with installation are already out of the way. It’s also because of the energy savings that come with having a solar array – an average of $10,000 to $50,000 over the course of its lifespan.

One other detail to keep in mind is that there are no examples of solar panels decreasing a home’s value. That’s good news: it means that, after your initial investment in installing them, they’ll only continue to pay off and benefit you in the long run.

Where Do Solar Panels Have the Most Impact on Home Value?

Location can make a huge difference in how much solar panels contribute to the value of a home. There are some states that offer credits and rebates for adding solar panels to your home, and in California, all newly built homes have actually been required to include them since 2020. Overall, according to a recent Zillow report, solar premiums will have the most impact if you live in New Jersey, Pennsylvania, and North Carolina.

That said, these benefits vary within the state as well. And no matter where you live, the environmental benefit can’t be overstated, nor can – as noted above – the energy savings that you will ultimately generate.

How Much Would Solar Panels Increase the Value of My Home?

So, when location makes such a difference, is it always worth it to invest in solar panels? Overall, the answer is still a big yes. That same Zillow report states that the average increase in home value is 4.1 percent – or, an addition of $9,274 in value to a $226,300 home. While this isn’t going to offset the cost of installation entirely, it can be enough to cover a great deal of it.

What Affects the Connection Between Solar Energy and Home Prices?

It’s important to know that several factors can influence how much value solar panel installation adds to your home, and your location, number of solar panels, and photovoltaic (PV) system age are only a few. Here are some of those factors you should keep in mind – most of which are, frankly, highly affected by your location.

• Solar performance-based incentives. There are a few states that offer performanced-based incentives for solar energy – meaning, they pay you back based on how much renewable energy you regularly generate. Be sure to do research on what your state has to offer, as this can increase the value of your home even more.
• Electricity costs. Another state-by-state variation is with utilities costs. In a given area, when the average electric bill is higher, the impact of solar energy will be higher, too. That means that solar panels add the most value in states like Hawaii and New York, where they do much more in terms of offsetting the cost of electricity.
• Ownership status. Something you might not have considered is the importance of owning your solar panel system. If you are using a solar lease, then the value of your home will not increase nearly as much. That’s just because, in that situation, the system isn’t actually part of your property. Savings notwithstanding, the company leasing the solar array could remove the panels whenever they wanted to. It could also mean that a new home buyer wouldn’t benefit from local solar incentives. So be sure to keep this in mind when you get started on your own solar installation!

Solar Power: A Source of Several Returns on Investment

There are so many benefits to solar panel installation, even if you’re planning a move in the near future. It’s just one of the many ways solar energy is an innovative, future-oriented form of renewable energy. While it’s clear that they are going to depend a great deal on where you live, it is still worth your time to look into how much value solar panels can add to your home. In the long run, it could pay you back in ways you never expected.