State rebates and incentives (such as net metering)
Federal solar investment tax credit (ITC) Replacing grid electricity with a sustainable, often cheaper option and, as the seller of a solar property, there are tremendous advantages in the real estate market such as:
Higher asking price than comparable homes without solar
Solar panels are viewed as an upgrade by potential buyers
Homes with solar panels often sell faster than those without
100% return on solar investment upon the home sale
Homeowners with a solar energy system who may want to sell should note that prospective buyers are interested in documentation showing that the installation was done properly from a reputable solar dealer, and proof that the system is reducing electric bills. Syntek Solar Advisors can show you how to document the cost savings on your electricity bill.
Home seller incentives for investing in solar panels are parlayed into homebuyer incentives because a property’s market value may increase as electricity prices rise.
With a home solar installation, the buyer could potentially receive a 200% return on the sale price premium. You’ll be hard-pressed to find another investment matching these financial benefits:
Monthly/annual financial gains throughout the lifetime of the solar energy system (25-30 years)
Reduced carbon footprint Higher resale value of the home
1. Do Bigger Installations Increase Home Value?
Home solar energy is yours to control while adding property value. Research shows, however, that the wattage generated by solar panels installation does not proportionally raise the value of a home. So, installing massive solar panels on your rooftop won’t necessarily equate to a higher resale value. A solar panels installation that sufficiently meets your energy needs is enough for you to recoup the price of your installation.
2. Do Solar Homes Sell Faster?
The length of time that a solar-powered home is on the market often varies by region of the country. While early analysis performed in six states by Lawrence Berkeley National Laboratory found that solar homes take an extra eight days to sell, new research shows the opposite. A solar energy installation will help sell your home 20% faster than residences without solar panels.
Today’s rapid expansion of solar panels across the country is increasing appraiser and homebuyer understanding of the reliable, long-term benefits of grid-tied solar. This has accelerated the speed of sales and raised sellers’ revenue for solar homes.
3. New vs. Older Home Solar Systems
A newly purchased solar panels system with efficient technology, more time on its warranty, and less need for maintenance may significantly add to property value. Homeowners with older solar systems should factor in some depreciation and anticipate a slightly lower premium upon sale.
Even if you sell your home in the future, updating your house with a solar installation is a sound investment versus other possible renovations.
A recent report shows that the cost of a residential solar system is less than half its price in 2010. Following this trend, as solar technology becomes more efficient to install, there may be a smaller premium on property values. However, lower installation prices and increasing electricity costs should accelerate return on investment thanks to reduced electricity bills from buying a new residential solar energy system.
4. Should You Buy or Lease?
Your financial goals are likely a primary factor in going solar and may impact whether you buy or lease an installation. If you purchase a new home solar system, future proceeds from an increased sale price will go directly to you.
A solar installation can only be included in a property assessment if it is owned by the homeowner and is an asset that can be transferred without obligation. The system’s warranties and performance guarantees generally transfer with the sale.
To secure a higher sale price, it’s most advantageous to buy a solar energy system for your home. However, if you decide that a lease or Power Purchasing Agreement (PPA) is more appropriate, there will be less recouped from the home sale.
Appraisers and lenders consider that if a homeowner installs a residential solar system through a lease or PPA, it is essentially the asset of a third-party owner. This requires the third party to be involved in the property transfer. Syntek Solar’s experienced Service Transfer Specialists make it easy to transfer your solar lease agreement to the new owners. Learn more.
5. Regional Markets and Electricity Costs
The largest price increases on solar properties are typically found in regions with high electricity rates and strong solar incentives. High energy costs make homes with solar installations more attractive to homebuyers. Plus, state governments are increasingly seeing the long-term community and infrastructure benefits of implementing solar incentives.
For instance, Long Island’s high electricity rates have been a boon for the local residential solar market. The area boasts nearly 40% of all solar systems in New York state. Increasingly across the U.S., higher energy costs can translate into higher appraisals for solar homes. Low-cost solar power is simply a smart investment.
In 2015, the Department of Energy said the average homeowner adding a solar energy system could net \$15,000 more at the time of sale than a comparable home without solar power.
A new study suggests that the increase is even more significant in the Northeast’s emerging solar markets.