Let’s cut to the chase: installing solar panels can increase your home value by an average of anywhere from $9,000 to $226,000. Typically, you’re looking at a home value increase of about 4%.
However, averages don’t provide exact numbers. If you’re wondering, “How much does solar increase home value?” there are a few factors you should take into consideration.
At the end of the day, the cost of solar is always worth it. The energy savings and incentives make a huge difference, but so does the impact on your home value.
Read on to learn more about just how much solar can increase your home value.
How Much Does Solar Increase Home Value? It Depends
How can you get a better sense of the ROI of solar for your home, specifically? Go beyond averages.
One way to get an idea of how much solar raises your home value is by looking at recent sales in your neighborhood. Compare the final sales costs of homes with solar versus homes without.
Not seeing many homes with solar for sale in your neighborhood? These factors can also help break it down.
Energy Costs in Your Area
How much are households paying for energy in your area? Typically, higher energy costs create more demand for solar energy.
When you can replace high energy costs with the low (to nonexistent) costs of solar energy, you can expect solar power to raise your property value by a higher margin than 4%.
The Cost of Solar Installation in Your Area
How much do solar energy panels and solar installation cost in your area? The cost to install solar panels varies just as much as the ROI of solar panels, so do a bit of research to find out.
If the cost of solar installation is high, you can expect a higher ROI on solar energy for your home. The idea is that by purchasing a higher-priced home that already has solar, buyers will save money by not taking on the cost of solar installation, themselves.
Your Solar Power System’s Output
The ROI on solar almost always reflects the size of the solar power system in question. Some estimates show that you can expect around $4,000 per kW of solar power.
In other words, you may not see that full 4% increase in property value if you only installed a small, partial solar panel system. However, a large system that fully replaces your home’s dependence on the energy grid should bring a hefty return.
Your Solar Power System’s Age
Think about why you’re considering going solar. Are you hoping to get years of personal use out of your new system or are you looking to make valuable improvements before selling?
The truth is that newer solar panels tend to yield a higher ROI. This is because buyers can expect the latest technology and a longer lifespan from a new system.
However, the ROI on a solar power system doesn’t start and stop with its resale value. You’ll still see plenty of money in your pocket if you install solar panels years before selling your home. These savings come in the form of lowered (or nonexistent) energy bills, tax incentives, and more.
Do Buyers Want Homes With Solar Already Installed?
What’s the best way to maximize the property value increase brought on by installing solar power? You’re going to need to find buyers who consider solar power an asset, rather than a hindrance or nonessential.
It’s not always easy to predict buyer behavior, but there are a few ways that you can assess whether or not your solar panels will be seen as an asset.
The Desire for Solar by Location
How much do the people who live in your area want solar power? As we mentioned earlier, high energy costs tend to promote more interest in solar power. However, other factors, such as environmental awareness, can also play a role.
In general, the people who tend to want solar are the ones who know a thing or two about it. Ten states in America, for example, are home to residents who are more likely to want homes that have solar power already installed.
What about areas outside of the US, where environmental awareness is less politicized? If you’re looking to sell a solar-equipped home in the UK, you’re in luck. The vast majority of UK adults have shown significant interest in solar power.
The Usefulness of Solar by Location
Sometimes, it doesn’t quite matter if people want to use solar energy to power their homes. Where you live can also determine a pretty important consideration: how useful solar power actually is.
Solar panels can only generate energy in accordance with the amount of sunlight that hits them. Some areas of the world see bright, sunny days almost every day of the year. However, if you get a lot of cloud cover in your area, you may want to do some more research into how much solar energy you can actually expect to generate.
The good news is that most homeowners around the globe can make use of solar energy. Keep in mind, however, that it will only boost your property value by tens of thousands of dollars if it’s enough to make a substantial difference.
The ROI of Solar Varies But It’s Almost Always Worth the Investment
How much does solar increase home value? It depends. Use our guide and do some research to get a better sense of how far solar power will get you when it comes time to set the value of your home.
Want to make sure that the inside of your home looks as great as the outside? Take a look at our home improvement and decor content to get inspired and spruce up your property.