According to a new report, Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis, adding a solar power system increased the value of homes in six markets. It also said that previous research, which found that home buyers would pay $15,000 a year more for a home with solar power, was confirmed.
“These results will benefit appraisers, real estate agents, and mortgage lenders who increasingly encounter PV homes and need to understand the factors that contribute to, and detract from, market value,” explained one of the study’s authors, Ben Hoen, a researcher in the Energy Technologies Area of Berkeley Lab. The US Department of Energy SunShot Initiative helped fund the research.
The study findings are not aligned with the conventional view that solar power is unaffordable or a waste of money suitable only for wealthy people who are trying to be ‘green.’
In fact, once all the tax credits and rebates have been accounted for, a home solar power system could actually be free — if you add in the boost in home value created by having such a clean electricity system. For example, a 5,000 watt home solar system might only cost about $15,000 after incentives. Obviously, if $15,000 in value was added to a home’s selling price, that increase would pay for the solar power system.
If the home’s owners saved $150 a month on their electric bill, the yearly savings would be $1,800. In 10 years, the total savings would be $18,000. What other investment could you pursue that might make that amount of money in 10 years?
Perhaps it is not surprising that some homes with solar power systems are not being appraised at their full value, though. “Many appraisers and lenders prefer the paired-sales valuation techniques that are standard in the real estate community, but comparable pairs of PV and non-PV homes are not always available, which can result in PV systems on some homes receiving no appraised value,” explained lead author Sandra Adomatis.
Saving $18,000 in 10 years or $36,000 in 20 years would be very helpful to many homeowners. That money could also be used to cover home maintenance costs such as roofing, re-doing floors, painting, or landscaping.
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Image Credit: NREL