Solar panels do not only increase the value of a property, but they also increase the quality of life for the owner. Imagine having no electric bill. How much would that help your finances?
Solar panels don’t need to be plugged into the wall, and they don’t need to use fossil fuels, coal, or any other type of fuel. The panels only use the sun as their source of power, and they can produce enough power for a home or a business.
In our experience, solar panels are a good investment, and with the tax rebates that have been set up by the federal government, the cost of having these panels is much lower than it has been in the past.
We wanted to find out other opinions about solar panels so we asked Minuca Elena to reach out to 25 real estate agents and ask them the following question:
How do solar panels impact a property’s value?
These realtors have first-hand experience of working with buyers and sellers so they are very knowledgeable about the requirements of the real estate market.
Find out below how much do solar panels increase your property’s value and what home buyers think about them.
John Romito – Heart & Home Real Estate
Solar panels are a solid way to increase the value of a home by an average of roughly 4% across all markets in the US. Solar panels practically pay for themselves when utility bill savings are factored in along with federal and state tax credit incentives. Solar panels also provide a sleek, streamlined addition to the resale value of the home.
Homes equipped with solar panel technology are wildly popular, sell faster, and command higher closing prices when compared to similar homes that don’t boast this technology.
Homebuyers are all too happy to pay a premium for homes that feature solar panels because it will obviously reap ongoing financial dividends for the duration of their ownership.
Solar panels are so popular they can even increase the value of the entire neighborhood in the form of what are known as “comp” prices or a range of estimated prices based on the sale price of homes similar to a given home, in this case, one with solar panel technology.
Finally, solar power technology can help reduce our carbon footprint, which is an attractive feature to people who are committed to doing what they can to help preserve the environment.
Green energy continues to be a trending topic and advances in technology promise even more advancement in the near future.
The stats vary on how much value rooftop solar panels add to the value of a house. The most reliable figures have the resale premium from a solar system at about $15,000 nationally.
However, that amount varies considerably by state. In New Jersey and Hawaii, for example, the premium is about $30,000. Owned systems add the most value.
Rooftop systems add more value in areas where the systems are more common. Commonness adds to the consumer confidence in the systems. In markets where systems are less common your agent will need to demonstrate the value to buyers by providing
Buyers with proof of how much money the system saves the current owner and by persuading buyers that the systems are simple and inexpensive to maintain.
It helps to have a maintenance contract in place to give buyers peace of mind that everything that needs to be taken care of will be taken care of. A warranty is also helpful since they reassure buyers that they won’t be out of pocket if anything goes wrong.
Tyler Forte – Felix Homes
Solar panels can be a great selling point for a home under the right conditions.
The first question to ask is whether the solar panels are leased or owned. Leasing solar panels is more common as it allows you to pay the roughly $10,000 cost of installation over a long period of time.
If your panels are leased, then you will either have to transfer the lease to the buyer or buy out your lease prior to selling the home.
Whether your panels are leased or owned, they will have a positive impact on your home’s value. Not only is solar energy less expensive but it is good for the environment which is becoming an increasingly important factor for buyers when choosing to purchase a home.
Solar panels (and cheap electric bills) can be a huge selling point that any real estate agent can leverage when selling your home.
One extra benefit of solar panels that is the icing on the cake is that a roof with panels will typically last longer!
While most residential roofs are rated to last about 20 years, a roof with solar panels can easily last over 30 years. This is because the panels shield the shingles from the natural elements.
Julie Upton – Compass
I am a licensed real estate agent in the SF Bay Area and we find that people in CA will pay a premium for homes that have solar panels.
Millennial buyers make up a significant portion of homebuyers these days and, while they are not monolithic, they are buyers that tend to want to feel good about their consumerism and often seek products, goods, and services that are more environmentally-friendly.
Green or resource-efficient homes with solar rely on clean, renewable energy so individuals who are environmentally conscious will likely pay a premium for these green features.
Some studies have shown that in specific areas of the country, buyers will pay significantly more for a home with solar panels.
In CA, all new construction of residential buildings must have solar panels so having solar is becoming expected as well.
Suzanne Pope – Whiterock Locators
Having solar panels on a home can certainly add value to any property, especially if the panels are relatively new. They may detract somewhat from the price if they are very old (20 plus years) and may need replacing soon.
The good news is that replacing old solar panels is not as costly as installing panels on a property that has never had solar before.
Solar is attractive to buyers as it can lower their electricity bills dramatically. So, it’s a real perk for homebuyers, especially the younger generations, who tend to prefer more green alternatives.
A study was performed that showed buyers across the U.S. were willing to pay a premium of roughly $15,000 for a home with solar installed.
In my personal experience, I would have to agree that homes with solar installed definitely command a premium over similar homes without it.
However, that may not be necessarily true in certain regions of the country where sunlight might be more limited. I think many homebuyers can see the value-added benefits that solar offers and see it as an upgrade just like they would with a nicely remodeled kitchen.
Josh Stech – Sundae
Adding solar panels to your home can increase its value if you own the panels outright, netting you higher-priced offers when you sell. In fact, homes with solar panels sell for 4.1% more on average, according to Zillow research.
A 2015 report from Lawrence Berkeley National Lab found that buyers are willing to pay an average of $15,000 more for a home with solar panels.
Many buyers will pay more upfront for substantial energy savings later on. Moreover, houses with solar panels tend to have other features homebuyers want.
While a house with solar panels might be more attractive than traditional energy homes, it might alienate some buyers, too. If you lease your solar panels, many buyers won’t want to take over the lease.
You can mitigate these concerns by explaining the benefits of solar panels in your listing and marketing materials.
It helps to focus on both the environmental impact and financial implications for homeowners. You may also need to educate potential buyers about the maintenance required on solar panels.
Many people mistakenly believe that a solar energy system is harder to maintain. In fact, it just requires a good cleaning every two to three months. Homeowners can do the work themselves or hire a solar installer to clean the panels at regular intervals.
Michael Carnahan – At Home Nation
A homeowner can either own or lease solar panels, and there are advantages and disadvantages to both options.
For buyers interested in owning solar panels, they will typically be excited about the opportunity because they are using renewable energy and they are saving money on utility bills.
If a buyer can save on the electric utility by having solar panels, then the home becomes more appealing and, therefore, more valuable.
A typical buyer could save hundreds of dollars per month depending on the size of the home and the amount of electrical usage.
There are also maintenance costs that should be considered, but overall many buyers see it as a win because they realize monthly savings, and these same buyers are often willing to pay more for that advantage.
Allen Shuford – The Switch
Adding solar panels to a house can not only raise the resale value of a property but increase its overall saleability.
Solar panels offer a clear benefit for buyers when it comes to reducing monthly utility costs, providing power to the home during natural disasters or power cuts, or can be used to power specific lifestyle choices such as an electric vehicle with no extra cost.
The amount of extra profit you can make from adding solar panels to your home depends on several factors, such as your state and if you received any government grants for adding the panels.
In general, however, homeowners can expect to see anywhere from a 3% to 5% increase in the total resale value of the home by adding solar panels.
If you’re thinking of adding solar panels, it is important to calculate the total cost of addition and then the total estimated resale value difference of your home to see if it’s profitable to add solar panels simply for resale value’s sake.
Again it’s important to note that while your total profit may not always outweigh the cost of installation, the monthly savings on utilities, helping the environment, and the convenience of generating your own power in the event of an emergency are factors that cannot always be measured monetarily, and thus contribute to the overall saleability of the home in the form of an added benefit.
Christopher Bello – HAR.com
The world is pushing to achieve greener energy. Tesla has made electric cars cool and sexy, and solar panels are another way we are able to utilize alternative energy sources.
It’s widely known that we need to pursue other energy sources and that we can’t just rely on fossil fuels to be here for the long run. Solar panels positively impact the value of a property by locking in lower energy rates on a monthly basis.
Energy is one of the highest monthly expenses a homeowner or tenant has to deal with, outside of principal, taxes, and interest payments. Solar panels also have quite a lifespan, which helps homes equipped with this energy source to stand out from the competition.
For a family that owns a house outright, all they really pay are utilities, some maintenance, and taxes. With solar, these families are able to lower their overall expenses and really reduce their costs to live in the home for a long period of time.
An article from appraisalinstitute.org mentioned that according to the nation’s largest professional association of real estate appraisers, “solar photovoltaic systems typically increase market value and almost always decrease marketing time of single-family homes in the Denver metropolitan area.”
In general, you can expect your property value to go up when you install solar panels on your home. While the exact value can vary by state, solar panels can potentially increase a home’s value by up to 4.1% more than comparable properties with no solar panels.
Of course, that doesn’t necessarily mean you’ll see that price increase across all offers you get on your home. Solar panels clearly offer plenty of benefits for homeowners, but there are many people who don’t value solar as much as others.
That being said, you need to think about the future when you talk about solar panels.
As solar energy becomes increasingly adopted across the nation, there’s a high chance that the installation will become increasingly valued by homebuyers.
So while the value improvements are not always cut-and-dry today, solar will undoubtedly increase the value of properties in the near future.
At the end of the day, you can assume that solar panels will add value to your home, just as long as you find the right buyer.
Tal Shelef – Condo Wizard
There are tons of benefits when it comes to installing solar panels, and one of those benefits is that it increases your property value.
Properties with solar panel installations have been studied to have a higher resale value and be snapped up quicker compared to properties that don’t have one.
This is because, for potential buyers, the idea of producing your own electricity and having a massively reduced electricity bill is greatly appealing. There is a lot of money going into purchasing a new property, so for buyers, any reduction in costs is welcome.
The environmental appeal of owning a property with a solar installation also contributes to drawing in buyers.
Ricardo Mello – Manhattan Miami
Overall, solar panels have a positive effect on resale value – but the determining factor is whether the panels are owned or leased.
Potential homebuyers may not want to take on the added expense of the lease and may ask a home seller to buy out the lease as part of the home purchase.
If solar panels are owned, they are absolutely something that a bank takes into consideration when considering the value of a home and are appealing to many buyers which boosts resale value.
I am a realtor in the Pittsburgh, PA market where we have more rainy/foggy/snowy days than Seattle! For that reason, solar panels on homes have not really taken off or been seen as a valuable addition.
However, as electrical rates continue to increase I do believe that home solar arrays are going to become a desired amenity.
In our region, the vast majority of energy is sourced from coal, gas, and nuclear. As solar energy collection and storage becomes more efficient, those ‘dirty’ energy solutions will continue to wane as new technologies come online.
For our region, I think we will continue to lag the country – especially areas that provide more sunny days than here in Pittsburgh! However, we will catch up as the technology improves and costs come down to make it feasible in our climate.
Cranston Schwarz – Schwarz Real Estate
Australians naturally prefer renewable energy, it is cleaner, affordable and there is more demand for it.
At this stage only 20% of Australian homes have a solar energy system installed, making it valuable for a homeowner to invest in solar energy as it gives them that competitive edge in the market.
A study done by the Real Estate Institute of Australia (REIA) showed that 85% of Australians strongly favored homes with renewable energy, and a further 78% of Australians said they would even pay up to $10,000 more for it.
A solar system is advantageous in any case. Property investors can even reap the benefits, with studies indicating that renters are willing to pay up to $10 a week more.
If you are selling or not, switching to renewable energy will either increase the value of your home or save you money. People are willing to spend more on a home with a solar system as a long-term investment strategy.
Non-renewable energy prices are set to rise in the future, solar power will save thousands on electricity bills in the long run.
Plus with the growing concern over climate change, solar energy is trending as it does not cause air pollution or greenhouse gases, having a positive effect on the environment.
We are proud to say that we have invested in liveability training so that we can recognize and market greener homes to an environmentally cautious buyer.
Richard Latimer – Veritas Homebuyers
When we compare a home with and without solar panels the value for the house with solar panels can be 4.1% or higher on a national average according to Zillow. This is a significant amount of value-added.
For example, if your house is worth $300,000 that would be an additional $12,300 added!
However, it should be noted that this is the national average and it varies from state to state. Another thing that is worth noting is whether the person selling the house owns the solar panels outright or is leasing them through the solar company
This can be seen as a liability for the buyer since they will fall under the lease agreement if it is transferred on the sale of the home.
Some buyers will not buy the home if it is under a leasing agreement. They don´t care about the potential energy savings and don´t want an extra monthly cost on top of their mortgage. So, if the panels are leased it might create problems in selling the house and narrows the potential buyers.
Another possible downside is the age of the panels. If your panels are old, then they won´t add much value since technology is dated in terms of investments.
So the truth is solar panels can do both raise the value of your home or lower the value of your home when trying to sell it. Let´s be clear the solar won´t lower the actual value of the house but rather the saleability!
Deb Tomaro – REAL Real Estate Today
In my area, solar panels are a relatively new amenity, so there is not enough quantifiable data to show an increase in a home’s value due to the presence of solar panels.
In fact, guides that I use from local appraisers (to help me price homes) do not make any adjustments to a home’s value when solar panels are present.
I expect this to change in the coming years, but we aren’t there yet, though most buyers will make a mental adjustment in price when provided significantly lower utility bills.
I am located in the midwest where newer technology may take a bit longer to catch on.
Travis Steinemann – BuyhousesBR
There is a controversy that solar panel installation increases your home value in the market. Yes, solar panel accelerates the speed of your house selling process but it holds a little contribution in increasing the value of your property.
Previously in 2008, it costs the homeowners around $6.67/watt or $24000 on average but after 2016 the cost has come around $3.24/watt. Though the solar panel doesn’t cost so much so many homebuyers consider it a part of its deal instead of an extra privilege.
There are also some considerable factors for understanding the reasons for “If the solar panel increases the home value or not?”
If you want to put your home on lease for a certain period then installing it won’t affect the lease price of your deal. But If you want to sell your home then it may give you some extra money in some cases.
Remember that solar panels in a depreciable property so many home agents exclude this thing from an additional facility. In many scenarios, the solar panel helps you to find the buyer fast and get more preference from the buyer.
Deborah Spence – Fierce Realty Corp
Not only does owning solar panels increase the value of the homeowner’s property, but it also offers generous tax credits. Solar energy’s popularity has increased.
Just before the pandemic, solar energy panels were considered for off-grid areas and climate change enthusiasts.
However, the pandemic has given it a fresh set of eyes from the general population. I have always been excited about solar and I am glad that homeowners are becoming more open to it.
The National Association of Realtors has a newly issued Green Certification program that I will soon have.
Omer Reiner – Florida Cash Home Buyers
Due to an increased demand for green living, an overwhelming majority of home buyers these days are looking for energy-efficient features when choosing their next house.
And solar panels are one of the best options out there, as they can have a significant impact on a home’s monthly utility bills. However, buyers aren’t the only ones who can benefit from such an upgrade.
Recent research on home sales shows that houses with solar panels generally sell for 4.1% more than comparable homes with no solar panels, making them a good investment for sellers as well. That’s an increase of $9,274 for the median-valued U.S. home.
Of course, this number can vary greatly from state to state (and even city to city), but it’s a good indication that energy-friendly upgrades are trending in the right direction.
It is worth mentioning that, just like a pricey kitchen remodel or master suite addition, installing a solar system can be a big blow to the budget.
So, before pulling the trigger, it’s important to consider your local market and whether or not potential buyers in your area would be willing to pay the upfront premium in order to reap the long-term benefits.
Ashley J. Saunders – My Dream Haus
In the UK, it took a while for homeowners to consider adding solar panels to their property. Part of the problem was the government introduced an unstainable incentive which was then removed.
Thankfully, they saw sense and have come up with a better incentive that works for all and enables those with solar panels to sell energy back to the national grid.
While other governments have been slow to act both in terms of providing homeowners with suitable incentives, the UK market has embraced solar as a way of work towards becoming carbon neutral by 2050.
More potential buyers are looking for properties with solar panels and are willing to pay more as they can save money in the long run and even make some cash. As more homeowners look at the green credentials of a property, solar panels are likely to continue to demand a premium.
The other aspect of owning a property with solar panels is being able to use that energy to charge an electric car as well as run your home. This will be a massive game-changer as more of us upgrade to electric vehicles.
It’s worth bearing in mind that while adding solar panels to your home will increase its value, we are just at the start of the solar revolution.
Some may be turned off by what they consider to be an unattractive design, however, within 5 years, we’ll see roofing tiles that secretly double as solar panels. When we get to this level of innovation, there will be a significant increase in people adding solar panels to their properties.
John Kirshenboim – John Buys Bay Area Houses
Solar panels can add up to 5% of value to your home, especially you are in an area that really appreciates solar energy. Certain areas really gravitate to homes with solar energy power, mostly because of the climate.
Homes with solar panels can also sell quickly because specific people are in the market for them and they don’t pop up all the time.
My tip would be to speak with a realtor in your local area to see how many homes have solar panels. They should have a general idea of if it’s popular in your area, or not. They should also understand if there’s a market for selling homes with solar panels in the area you are living in.
Chris Heller – Agent Advice
Installing solar panels can increase the value of your home by up to 4%. When purchasing a home, certain clients are only interested in viewing properties that have already gone solar.
However, panel success depends on the installation and how many kilowatts they produce. There are a lot of factors clients consider, and panels have become yet another one.
You can also find solar a selectable ‘requirement’ button on many home-buying websites.
In addition to increasing a home’s value, solar panels also help the home to sell more quickly. They appeal to the environmentally-conscious who are searching for green options.
The most successful sellers are sure to do large installations with more panels because it adds the most value to a home. It’s also a huge selling point for real estate agents to bring up, especially for clients who weren’t even looking for homes with solar panels.
They reduce the carbon footprint and can substantially lower utility bills, helping to save money.
Ben Fisher – The Fisher Group
The value of a home with solar panels already installed can increase due to a number of different reasons.
The first one is if they have recently installed solar panels this almost always means it is on a newer roof so you can be confident in the long-term benefits of both the roof and solar array.
The second reason, and most obvious, is one has reduced monthly utility costs if the panels are paid for and not rented from the solar company.
Dylan Lennon – DL Asheville
Solar panels can be a great value-add to a home.
Because of COVID, more people are working from home, causing utility costs to increase.
I’ve noticed that more potential home buyers are asking for “green” homes. Buyers are looking for energy independence and ways to save money on their utility bills. As a result, the demand for solar-powered homes is increasing.
On average, I’ve found that buyers are willing to pay $15,000-$30,000 more for a home with a fully paid for solar panel system.
Luke Moroney – Search Party Property
Solar panels provide many benefits for the property, as well as the environment. The attractiveness of solar energy will increase the demand for these types of properties as the cost of power increases and will be highly sorted after in hot or cold climates.
As an investor, the weekly savings for a tenant may lead to an increase in rent, which makes the investment more lucrative and numbers look more attractive from a value perspective.
The positive impact on value is determined by a weekly return on investment numbers (cashflow). With a movement towards solar, the heightened demand at the time of sale would lead to higher prices being achieved.
As an owner-occupier, the opportunity to save, especially with multiple people living at a residence is creating ongoing value. This could lead to money be spent elsewhere, or have the ability to increase cash savings or use the money to invest.
A prospective buyer of the property will see solar as a value add, and likely to more completion at the time of purchase.
In conclusion, everyone knows that the environment is important and it is important for everyone to do something about it. Many people have different opinions about what they can do to help the environment, but solar power is a simple and easy way to help.
Solar panels are a good investment, and they are an easy way to help save the environment. You’ll also save money on your electric bill because the solar panels will be producing all of your energy.
In the next few years, there will be an even higher increase in the demand for houses that are powered by solar panels.