If you are reading this, you have already installed or are willing to install solar but are curious about the ways you can reap the benefits. Then your search ends here. Because we have already done all the heavy lifting for you and gone through the trenches to find out the most factual info we possibly can.
Here’s everything you need to know about how solar affects your property. To begin, the first realization one should have to find the answer is: understanding there is no one straight answer. There are many factors that contribute to increases in property value. So this blog serves as a roadmap touching on different points to consider.
So when people say the property value has increased, what they mean is: more people will pay a higher price for the property than before. This is done either through marketing or organically. So it’s the buyer who increases or decreases the property value.
What makes the buyer pay more
- Location: If you’re in a prime location like California or New Jersey, installing solar yields high returns compared to less developed cities. The main reason is awareness. People who live in big cities know the benefits of solar and therefore they value it higher. But people in a village who haven’t heard about solar much probably won’t pay much.
- Quality of panels: If you have used cheap equipment or low-quality products while installing, you can’t expect big returns. The people decide the price and they value quality products. So if you used top-class equipment while installing solar, then yes, your ROI would be higher.
- Age of panels: If you installed solar in 1998, you can’t expect much. As you know as the years go on, the efficiency of the panels decreases. Which in return leads to a decrease in price. But if you have a fresh 5-year-old panel that has a 30 years warranty, then you have the authority to command the price.
- State policy: What are the tax benefits in your state? Because if you live in a state where the tax incentives are higher for solar, then people value it so the price would be higher. Especially if you live in cities like New Jersey or Massachusetts, then your solar would be worth a lot more than compared to the village in south America.
- Lease or PPA: If you bought and installed the solar, the value is higher compared to those like lease or PPA. Because in PPA you’re neither energy independent nor have the eligibility to enjoy tax benefits. So even if you have installed top quality, 2-year-old fresh solar panels, if it’s in the company contract, then its value is less.
On average, people who installed solar see a 3 to 4% increase in their property value. But as per a specific study, researchers analyzed over 22,000 home sales in eight states. And found that homes with solar panels sold for an average of 17% more compared to homes without them.
Also, as per research by Berkeley Lab, buyers paid $15,000 more in California for a house that has a pre-installed solar system. In the end, solar is beneficial. But when selling, there are factors that affect the price. So if you’re planning to install solar only to sell at a higher price, then you must consider the above factor before taking a decision.
