Essentially, the answer was a resounding “yes”—to the tune of $15,000.
How Much Value Will Solar Add to Long Island Homes?
Researchers parsed data from nearly 23,000 home sales across eight states, including New York, comparing 4,000 homes with solar energy to comparable properties sold during the same time period. It’s regarded as the largest and most robust study completed on the premium home buyers will pay for solar energy.
The study found that essentially, home buyers paid $15,000 more for a home with an average-sized solar energy system than a similar home without one (defining “average” as a 3.6 kw system). The study even was able to estimate that home buyers will pay a premium of about $4.18/w.
Bigger is Better—But Any Solar Energy System Adds Value
The study authors also noted there appears to be a “green cachet” to buying a home with solar panels of any kind: that is, a buyer will pay a certain amount more for a solar system of any size, and then incrementally more for a bigger system.
This means that smaller solar energy systems will increase your home’s value significantly, just by the mere presence or “cachet” of offering solar. You don’t need to install a massive amount of photovoltaic panels to see a real increase in value.
Appraisers & Lenders Are Learning How to Value Solar
The data presented in this study is helping the real estate lending industry catch up. In the past, appraisers and lending officials who are not familiar with the potential value of solar energy may have been underestimating the value of solar homes.
In a New York Times article covering the study’s potential impact on Long Island—home to nearly 40% of New York’s residential solar energy systems—local appraiser and green valuation expert Gerard O’Connor noted that “Any new item or feature is always a nightmare in appraising.”
Recently, Fannie Mae issued new guidelines recommending that appraisers analyze and include any solar energy systems owned by a homeowner.
Owning a Solar System Increases Value. Leasing Does Not—Yet.
The study focused solely on homes with owned solar systems, as opposed to leased systems. According to O’Connor, the new Fannie Mae guidelines are not likely to be applied to leased systems, adding more factors to consider when debating owning vs. leasing a solar energy system.
Ways to Maximize Your Solar Energy System’s Value
Here at Solar Dad & Sons, we can help you design the right size of solar system for your home to maximize its increase in value. We’ll be able to help you secure all the documentation needed to leverage incentives and tax rebates, and can offer advice on how to track your solar system’s positive impact on your utility bills—something future buyers may want to see as proof of efficiency and cost savings.
We also recommend that when the time comes to appraise your home, you specifically seek out an individual trained and certified in green valuation. An expert will know what your solar system is worth to you and to future buyers, whereas an appraiser without experience in solar may inadvertantly undervalue your home.
Ready to get started with solar, and increase your home’s value while saving on your monthly utility bills? Contact Solar Dad & Sons for a free consultation.