So, you started looking around the house for possible investment opportunities and you’ve stopped on solar energy. It’s a great way to cut down on your carbon footprint and, depending on where you live and energy usage, you may be able to fully break free of paying for energy. This makes it a fantastic long term investment, but what happens if you sell your home over the next five years? Chances are you will not have made back the money you paid to have the equipment installed at that point, so, ideally, the investment will boost your property’s value. But will it? Do solar panels increase home value enough to make it profitable, even if you don’t stay in your home for years to come? Here’s everything you need to know.
What Is the Average Value Increase Solar Panels Add to a Home?
As you might guess, solar panels impact properties differently based on what state you’re in. According to Zillow (an industry leader in property listings) and reported by Money, the average solar panel installation raised property values throughout the United States by 4.1%, or $9,274 (for the average house which is valued at $226,300).
So, do solar panels increase home value? Absolutely. How much depends on your home’s current value. If your property lists at $200,000 you can expect, on average, to see over an $8,000 increase. However, if your property value is $80,000, the increase will be much lower ($3,200).
What States See the Most Increase in Home Value After Going Solar?
You might expect only states in the south and in the southwest to be those with the highest increase in value. After all, those states receive the most direct sunlight. That, however, is not the case. In fact, all new homes built in California starting this year must have solar panels. This means California homes won’t see any real increase in property value, although non-solar homes will experience a decrease in property value.
According to CNBC (2019), the top 10 states for improving property value are:
- 10 South Carolina (3.5%)
- 9 New York (3.6%)
- 8 Maryland (3.8%)
- 7 Hawaii (4%)
- 6 Florida (4%)
- 5 Washington (4.1%)
- 4 Louisiana (4.9%)
- 3 North Carolina (4.8%)
- 2 Pennsylvania (4.9%)
- 1 New Jersey (9.9%)
Yes, New Jersey sees an almost 10% increase in property value. As the average home sold in 2019 went for $320,000 in New Jersey, that equates to a whopping $32,000 boost in property value. At that kind of rate of return, it absolutely makes sense to install solar.
Now, these numbers are not unified throughout the state. These are just state averages. Some cities see a boost in value, so you’ll want to look specifically into the city you live in.
What Is the Average Increase per Kilowatt?
The exact specifics will again depend on where you live, but in general, you can see around a $4 per watt increase to your property value. If you install a kilowatt worth of power onto your property, then you should expect to see around a $4,000 increase in your property. The amount you can install will depend on several factors, including the overall size of your home (and how long the solar panels have access to direct sunlight).
What Influences the Value Solar Panels Have on a Home
Your zip code is one of the biggest influences on how much of an increase your property experiences. New York City properties with solar paneling experience a dramatic boost to property value over the rest of the state.
The local price of electricity will play a role in this as well. If you live in an area of the country where cheap fuel, coal, or even wind are plentiful the cost of energy will decline. This means it will take longer to recover what you spend on solar installation, and it also means fewer households will opt for the installation.
Power outages can have an impact as well. There are some communities that can expect several power outages throughout the year. With solar paneling, you won’t have this as you’ll generate your own power. This, in turn, makes it that much more beneficial (and valuable) to install solar panels.
Do Solar Panels on a Home Lead to Quicker Property Selling?
In short, yes. The National Renewable Energy Laboratory reported that homes with solar panels sell about 20% faster than non-solar panel homes, even with the higher price tag.
Let Us Help You With Your Solar Installation
There really is no downside to solar installation. From cutting your carbon footprint and reducing (or completely eliminating) your reliance on local power companies, to the dramatic increase in your home’s value, there’s never been a better time to invest in solar. So, if you’re ready, now is the time to give the team at ONIT a call to control your electric future today. We can’t wait to help you spend less on energy and work with you to install a system that’s the right fit for your family’s needs.