Homeowners “go solar” for a variety of reasons. There are economic considerations such as reducing or eliminating energy expenditures, protection from future rising energy costs, and getting a great return on investment. Then there are more socially aware reasons for going green, reducing your carbon footprint, protecting the environment, consuming sustainable energy, and reducing dependence on foreign energy. But, regardless of the rationale for the initial decision, there is one lasting benefit every homeowner and residential real estate agent should be aware of, increased resale value!
Today, solar installations are becoming one of the most effective ways to modernize your home while increasing its value.
The Appraisal Institute found that, for every $1 in annual electricity bill savings that solar panels provide, home resale values go up an average of $20. Even if your installation only reduces your monthly power bill by $42, that still translates to a $20,000 increase in your home’s resale price!
Lower electricity bills and a smaller carbon footprint may be the primary reasons why people go solar; the moment your system goes online, your monthly utility statements shrink, and so does your negative impact on the environment. However, the effect on your home’s resale value is no small matter.
Why do Solar Installations Increase Resale Values
New home buyers appreciate the benefits of solar for the same reasons you did when you decided to go solar; it reduces electricity costs and is environmentally friendly. As soon as the new owners move in, those benefits accrue to them.
The average cost of a 6-kW solar panel system in Arizona is $11,011 – $13,498 after appropriate tax credits, estimated at the 2020 rate of 26%. Solar installation costs have declined by over 20% in the past five years. Today’s solar panels are more energy-efficient, and the aesthetics have also greatly improved, panels are sleeker and less obtrusive with low-profile mounting systems.
Current homeowners can quickly compute that the price of an average rooftop solar installation is recouped in their home’s resale price. And new owners purchasing solar homes are rewarded with lower energy bills and healthy tax incentives that can cover the system’s cost several times over the life of its warranty.
HGTV May Have it Wrong
Whether you watch Chip and Joanna, or the Property Brothers, you see countless kitchen and bathroom remodels, new hardwood floors being installed, and in some instances, complete room/bathroom additions. It can be inspiring and motivating. However, if you want to increase the value of your home and are considering a remodel or addition a little due diligence is in order.
Earlier in this article, we quoted the Appraisal Institute, the nation’s largest professional association of real estate appraisers, that a home with solar could command a $20,000 premium. Now let’s see what Open Door quotes as the appreciation on several other popular home upgrades: Add a full bathroom, $18,000 additional resale value. How about a kitchen remodel, that increases your resale value on average $15,000. Installing new hardwood floors can add about $10,000.
So, if you were considering any of the above upgrades, it appears going solar consistently offers a higher return on your initial investment. While you live in your residence, you receive the financial savings and environmental benefits – and when it’s time to sell, you can command a higher listing price for your home.
PEP Solar Provides Value, Service, Quality
People are Going Green
Savvy residential real estate agents understand that more than eighty percent of new home buyers consider energy-efficiency crucial in their purchasing decision. Economics are an important consideration as is using renewable energy over fossil fuels. Some of the benefits of going green:
- Sustainability, unlike fossil fuels, solar energy, straight from the sun, doesn’t run out
- In most cases, renewable energy technologies require less overall maintenance
- Health and environmental benefits, no greenhouse gases or pollutants
- Solar energy reduces dependence on foreign energy sources
- Supports the local economy – solar creates jobs in manufacturing and installation
Real Estate Market Incentives for Installing Solar
Installing solar increases your property value versus other comparable homes in your neighborhood that are on the electrical grid. As the seller of a solar property, you also enjoy these benefits:
- Setting a higher listing price
- Potential buyers are seeking homes with solar
- Homes with solar panels sell faster
- Higher return on solar investment at resale
A Word of Caution – Owning Versus Leasing
When considering owning versus leasing a solar solution, one must consider the longer-term/resale implications. Although leasing may be a popular option, offering the energy savings without the upfront costs, you should consider the resale implications. Not all prospective home buyers want to take on the responsibility of a solar lease. Further complicating the sales process, the leasing agent will need to approve the new home buyer financially. Very importantly, if your system is leased, appraisers and banks do not recognize the added value.
Fortunately, You Live in an Ideal Location for Resale Values due to Solar
Resale values see the most significant benefit in markets where solar is more developed. Buyers appreciate active solar markets – locals that receive ample sunlight, have higher rates of solar installations, and have local government solar incentives, like Arizona. With our 3700 hours of sunshine annually and more than a half-million Arizona homes operating on solar, buyers expect solar in their new homes.
Whether you currently have solar or are contemplating an installation, we hope this article educates as to the impact/benefit of solar on your home’s resale value.
Final points regarding selling with solar.
- Potential buyers will want assurances and documentation that your solar installation was performed by a reputable, professional, and in the best case, a local solar dealer, like PEP Solar. Phoenix Energy Products, LLC, is Arizona’s leading provider and has been servicing, repairing, and installing solar systems since 1978 and solar PV since 1981.
- Buyers will want to know the components used and all warranty information. PEP Solar uses only best-in-class components and offers industry-leading warranties on all parts and the installation.
- Sellers should proactively inspect the system before listing the home, and buyers will insist on an inspection, or valid inspection report, before buying. The solar experts at PEP are your trusted source for solar system inspections.
For more information on inspections and all things solar contact us at: (623)806-8806
How much will solar panels save me on my home?
The amount that you will save with solar panels varies depending on how much you spend on electricity. If you spend $120 per month on electricity and you install a solar panel system that is designed to offset all of your electricity usage, you could end up saving $36,000 over the lifetime of the system! This is why it is so challenging to provide a number until we obtain a copy of your electric bill as each home is different. Give us a jingle and you’ll love working with the PEP Solar family.
PEP Solar Installs Are EVERYWHERE!