Do solar panels increase home value? The good news: there’s a good chance they will. Whether you’re a homeowner or a potential buyer, no doubt this question has crossed your mind. It also doesn’t hurt that persistent power outages in recent years have made solar a more attractive power option. A solar energy system (along with solar battery storage) has the potential to boost the value of your home and knock your electricity bill down a peg or two. That means a lot of potential extra savings for you. Let’s find out more about solar panels and your home’s value.
How Much Do Solar Panels Increase Home Value?
While specific numbers may differ, solar panels are very likely to increase the value of your home. On average, studies show that homes with solar sell for more than 4.1% on average. If you’re thinking about putting your home on the real estate market, solar is a great investment to increase your home’s value.
Investing in a solar energy system is a big decision. So, it makes sense that there are even bigger benefits that come along with it. People are learning that solar is the way to go when they want to generate clean energy, but also want to lower their electricity bills, and protect themselves from rising energy costs.
Buyers everywhere are learning that the sun has a lot of love to give their homes. When considering the financial value of your home, making a long-term investment in solar has the ability to make your home premium for a hungry real estate market.
How does solar affect my property values?
It’s been determined that a solar energy system can add onto your property value. However, the question of how much added home value you can expect depends on several factors.
Factors Involved in How Much Value Solar Can Add to Your Home
- Which state does your home reside in?
- How much sunshine does your home get?
- How much do your utility bills cost?
- What’s the going rate solar installation companies are offering?
- How much will it cost to replace your current system?
- What is the age of your solar panel system?
- Do you live in an environmentally conscious community?
- How often do power outages occur?
- How many solar panels do you think you’ll need?
- How much energy does your solar panel system generate?
- What solar incentives does your state offer?
How Much Solar Increases Home Value by State
According to CNBC, here’s the top 10 states in the U.S. with the highest selling value for homes with solar panels installed:
- New Jersey: 9.9% or $32,281
- Pennsylvania: 4.9% or $8,589
- North Carolina: 4.8% or $8,996
- Louisiana: 4.9% or $7,037
- Washington: 4.1% or $15,916
- Florida: 4% $9,454
- Hawaii: 4% or $24,526
- Maryland: 3.8% or $10,976
- New York: 3.6% or $10,981
- South Carolina: 3.5% or $5,866
Many states across the U.S. have instituted major programs and incentives to foster the development of home solar installations and battery backup storage systems rapidly. Subsequently, this has increased property values. Let’s take a look at a few of the states people are wondering the most about.
Do Solar Panels Increase Home Values in Illinois?
There’s a great chance installing solar panels on your home in Illinois will increase your property value. A recent report shows more homeowners in Rockford, Illinois turning to solar energy to increase their home’s value. Read about it.
Do Solar Panels Increase Home Values in California?
In fact, California is the first state to require a solar photovoltaic (PV) system on all newly constructed homes. Local legislators recognized the benefit of utilizing an abundant resource for electricity. Find out more about why solar panels are worth it in California, and the top solar incentives in California.
Do Solar Panels Increase Home Values in Arizona?
According to Zillow, average home value in 2021 is around $400,000 in Arizona. Even if solar panels increased your home value by 3% (less than then national average), you’re looking at an increased property value of around $12,000. One thing to consider is if your solar panel system is leased or purchased (with cash or a loan). Only those purchased for your home will increase your home’s value. Find out more about why solar panels are worth it in Arizona.
Do Solar Panels Increase Home Values in Florida?
As we previously mentioned, Florida is one of the top ten states in which solar panels can significantly increase your home’s value. At around 3% and Zillow‘s 2021 home value estimate of $340,000, homeowners in Florida are looking at around $10k extra when selling their home. In addition, all the incentives available for homeowners wanting to go solar in Florida makes it a smart investment. Here’s why going solar in Florida is worth it.
Do Solar Panels Increase Home Values in Colorado?
Solar Benefits for Home Sellers
If you own a home and are consider purchasing a solar panel system, here are just some of the benefits when it comes time to selling your home.
Homes with Solar Panels Sell for a Premium
According to the Office of Energy Efficiency and Renewable Energy, studies have shown that solar panels are considered an upgrade to your home. Just like upgrades to your kitchen or bathroom, buyers are willing to pay premium prices for homes with upgrades.
In fact, sellers even earn more money if their property has solar. In 2015, the Department of Energy and Berkeley Laboratory discovered that homes with solar panels bid at a higher asking price than houses on the same market without. Researchers found that sellers earned about $4/watt, which comes out to be around $15,000 for residential, depending on your home and solar system. On average, solar panels add about $20 of value to your home for every $1 you save on your electric bill. If solar panels save a household $600 a year in utility bills, that means your home’s value might increase by $12,000.
In another study conducted by the NREL, they found that solar properties earned about 17% more at closing, in addition to selling 20% faster.
Homes with Solar Panels Sell Faster
The U.S. Department of Energy and National Renewable Energy Laboratory (NREL) discovered that homes actually stay on the market for a shorter period of time when they have solar panels installed. Homeowners no longer had to play the waiting game to get their old family home sold and money in their pocket. The simple decision to make solar a priority made their home a cut above the rest.
Solar Benefits for Home Buyers
Sellers aren’t the only ones that can take advantage of the savings that solar has to offer. Buyers also reap the major rewards for the decision to purchase a home with solar. When it comes time to consider a new home, buyers take into consideration several factors. An appealing point they will consider when purchasing is the potential of lower utility bills with renewable solar energy for their home.
The Home Upgrade That Upgrades Your Budget
Solar panels are becoming a more modern way to upgrade your property. While a new bathroom renovation might be a stylistic choice, a solar panel installation is functional and appealing. Across the country, homebuyers are willing to pay for the economic and environmental benefits of solar panels on their new home.
- 25+ years of decreased electricity bills
- Reduced carbon footprint
- Increased resale value of home
It’s no wonder because homeowners can honestly expect a return on their initial investment in solar by tenfold. In fact, check out how much you can expect to save in your area by receiving a free quote from ADT Solar.
Do Solar Panels Really Increase Home Value?
The truth is you can really save money with solar panels. Here are just some of the benefits that come with bringing the sun into your home.
Solar Rebates, Solar Incentives, and the Federal Solar Tax Credit
There are many solar incentives that make going solar a financially sound decision. Households purchasing solar can experience lower utility bills and significant tax incentives that in some cases will cover the costs associated with solar installation. Here are just a few benefits that add onto the price tag of solar:
- State rebates and local incentives— Solar popularity means local utility companies and legislators want to back your decision to go solar. Check out some of the programs that put money back into your pocket. (For instance, net metering is a partnership with your utility company that credits you for the excess energy your panels produce)
- Federal solar investment tax credit (ITC) — Some homeowners are eligible for up to 30% back from the overall cost you spent on your solar system, battery and all.*
- Sustainable (and often cheaper) energy to replace reliance on the grid — Relying on the grid is becoming more unstable. Add a solar panel battery to your system and get the blackout protection your family needs.
The bottom line: when you sell a home with solar, there are also tremendous advantages in the real estate market.
Add Value to Your Home with Solar Panels
Do solar panels really increase home value? Yes! It’s time to put the sun to use on your home. Solar panel installation is a sound investment when you’re upgrading your home. Whether you want to take advantage of the benefits of producing clean energy while you live in your home or want to add a sizable value once it’s on the real estate market, solar is the way to go.
By purchasing a solar energy system, you can anticipate adding a huge percentage to your property value. Solar is the cost-efficient, sustainable energy solution and it’s the reason more Americans choose to go solar every day.
(Originally published August 12, 2021)
*Tax and credits or incentives including those provided by federal, state, or local governments may change or end. This can impact the amount of money you might save. Consult a tax professional to understand any tax liability or eligibility for any tax credits that may result from the purchase of your solar system.
**If you have taxable income and own the system, you may qualify for the federal investment tax credit (ITC). It is your responsibility to determine your eligibility and to apply. Consult a qualified tax professional for assistance and details.