Did you know that installing solar panels in your home increases the value of your property?
According to a recent study by Zillow, installing a solar system in your home will increase its value by up to 4.1%.
Sounds interesting, right? But that’s not all…
Homes with installed solar systems sell faster than those without. Prospective buyers are willing to pay huge premiums of up to $15,000 for homes that have solar systems.
Whether you want to enjoy living in your solar-powered home for the next few years or whether you want to sell it later, you stand to benefit from lower energy costs and a higher resale value.
This brings us to the big question: Does solar energy increase home value?
Let’s find out.
Here’s an outline of what we are going to cover:
- #1 Debunking the myths about solar power
- #2 Why solar power should be your only source of energy
- #3 The impact of solar installation on your home’s value
- #4 The top 5 mistakes homeowners should avoid when going solar
- #5 Is leasing better than buying a new solar system?
- #6 How to calculate the added value of solar energy
- #7 Why is solar power so popular?
#1 Debunking The False Myths about Solar Power (the third one will surprise you)
When it comes to solar energy, there are many theories and myths we need to debunk.
- Solar energy installation is expensive. Although the initial installation costs can be on the higher side when demanded upfront, time and data have proven that installation costs are now way cheaper than electricity costs.
- Solar panels get damaged easily—another false belief. Solar panels are weatherproof. If you don’t believe me, check the specifications and ask homeowners who have installed solar panels.
- Solar energy can’t run your power needs. Absolutely false. When installing solar energy solutions, the professionals ask you what your energy needs are. They calculate the number of solar panels and everything you need to meet your energy needs. Therefore, you can power everything if you install enough solar panels.
Here’s a photo describing and debunking other common myths about solar energy.
#2 Why Solar Power Should Be Your Only Source of Energy
You can hold your breath and hope for the best. Smart people, and we believe you are, have plan B in place, in case your power supply acts up. Plan B takes care of the things you can’t control and ensures that your normal daily routine is never interrupted.
Many homes have a secondary solution that is very reliable, namely solar energy. Unlike in the past, where solar panels were exclusively for industrial use, you can buy yours and hire a professional company to install it for you.
With solar panels installed in your home, you can say goodbye to outrageous bills and unforeseen power outages.
Notably, using solar power adds value to your home. According to the National Renewable Energy Laboratory, installing solar panels is an upgrade that will provide huge returns on your investment in the near future. So, why wait! Exactly!
Homeowners across the country are already enjoying the environmental and economic benefits of having a solar-powered home.
What is even more amazing is that using solar power lowers electricity bills, and you get tax incentives for every new installation.
As a homeowner, you recover your investment and gain a handsome ROI. Buying solar energy systems significantly increases the value of your property.
#3 The Impact of Solar Installation on Your Home’s Value
Homes with solar panels on their roofs enjoy more benefits, such as:
- Your home value increases drastically
- Your home sells faster
- The new homeowner enjoys the same solar installation
a) What influences the added home value?
Several factors determine a home’s value, chief of which is the market. Solar panels directly affect your home’s value depending on the following factors:
- Local electricity prices
- Your location
- System replacement value
- Frequent power outages
- Solar installation prices
- Eco-consciousness of the community
- Age of the solar system
- Understanding of benefits of solar technology
- Incentives in the state
b) Solar Energy Incentives Every Homeowner Would Die For!
Besides increasing your property value over comparable non-solar homes in the area, you enjoy financial benefits such as:
- Federal Solar Investment Tax Credit
- State incentives and rebates like net metering
As a home seller, you enjoy the following benefits in the real estate market:
- Potential buyers see solar panels as an upgrade.
- Your home fetches a higher asking price than other homes of comparable size and architecture without solar power.
- Homes with installed solar panels sell faster than homes without them.
- You enjoy a 100% ROI when you sell your home.
However, as a homeowner wanting to sell in the future, keep your documentation safe as buyers will want to see it.
Contact the experts to find out how to document your cost savings and show them to prospective home buyers.
c) Homebuyer incentives when buying and going solar
Having a home solar installation means prospective buyers can receive a 100% return on their investment in less than four years. There aren’t many investments that match this kind of financial benefit.
Besides, most solar companies offer buyers warranties spanning up to 30 years.
d) Discover how solar lowers operational costs
Did you know that solar panels are capable of generating as much wattage as electricity but at a cheaper rate?
This means that you can recuperate your cost of installation while enjoying longer-lasting and cheaper energy solutions. You can then use your savings to upgrade your home and increase its overall value.
e) Your home sells faster
Installing a solar energy system takes your home off the market 20% faster than homes without solar panels. No wonder there is a rapid expansion of solar installations throughout the country.
f) New solar energy system installation versus old installation
New systems are more efficient as they use modern technology. Plus, they last longer and come with a longer warranty. New solar energy technology is easy to maintain and increases your property value immensely.
g) Regional markets and electricity prices
If you live in an area with higher electricity rates, then solar properties fetch higher prices and enjoy strong incentives. The high cost of electricity motivates people to own solar homes, which drives up solar installations.
States also enjoy long-term infrastructure benefits when people install solar panels. Homebuyers also enjoy the implemented incentives. An increase in electricity prices results in higher appraisals for solar energy homes.
#4 THE TOP FIVE MISTAKES Homeowners Should Avoid When Going Solar!
The moment you decide to invest in solar energy, it’s only wise to do due diligence. Remember, your monthly utility bills will plummet almost
instantly. However, to reap the benefits, do some research and learn from other property owners who are benefiting from solar energy.
So, what are these mistakes to avoid?
1) Making a purchase decision based on price only.
Always do more research regardingthe specifications of the solar panels and systems before buying. Cheap doesn’t mean it’s bad, nor does expensive mean its right. However, you need to fully grasp what you are spending your money on to ensure it’s right for you.
Pick an experienced and reputable installation company, check their reviews and certifications.
2) Not comparing different quotes.
Always get multiple quotes to help you select the best system. This will ensure that your money is well spent. After getting the quotes, compare them to brands with different inverters and solar panels.
Furthermore, the panels vary in size and can be mounted in different places. Seek clarification when you are in doubt or don’t understand.
3) Not going for the incentives.
Solar energy lowers your electricity bill, besides being eco-friendly. Making use of incentives allows you to pay less in taxes. Owning a solar home lowers your taxes, and you enjoy 26% in federal tax credits.
Furthermore, there are local incentives you can utilize, depending on your state. For instance, Maryland offers solar homeowners a $1,000 grant that covers solar systems of up to 20kW.
Partner with a solar installer who is knowledgeable about the available incentives in the area to ensure that you qualify for them.
4) Failing to understand warranties
All solar energy systems, including the inverters, charge controllers, panels, and other components come with warranties. The warranties may not be specific to your installation company, but are available to all purchases.
Most solar panels come with a linear performance warranty (25-30 years) and a product warranty of 12-25 years.
Product warranties cover replacements minus labor costs. Therefore, it’s vital that you have a workmanship warranty. Ask the installer before you sign the contract.
5) DIY Installation
The process of installing a solar system is not a Do-It-Yourself task. It requires the right tools and competent personnel to install the panels correctly.
#5 Is Leasing Better Than Buying a New Solar System?
Absolutely not. Why? Because when you lease, you recoup less from the sale of your home. However, installing a new solar energy system means future proceeds pass directly to you, and the system is included in the property assessment.
You can transfer the asset without any obligation. Also, you have a performance guarantee and warranty transfer with the sale. Buy a solar power system to secure a higher home value.
However, if you decide to lease or use a Power Purchase Agreement (PPA), you recoup less as your solar energy system is third-party owned. Any future sale requires third-party involvement during a property transfer.
#6 How to Calculate the Added Value of Solar Energy?
Early studies show that home buyers are more willing to pay 4% more for a solar energy home. For example, in 2008, a California study determined that homes sell faster when they have solar panels. Also, the same homes enjoy $15,000 in premiums for residential properties.
Additionally, SEIA (Solar Energy Industry Association) calculated the increase in home value using the following methods:
Income approach
This method considers the cost of your expected savings minus your ongoing operating costs. This figure is called avoided cost and also the billing rate of your utility. The calculation is the rationale that spearheads most solar panel purchase decisions.
Cost approach
This approach represents the cost of replacing your solar panels. The calculation factors in the solar energy system pricing, but even solar panels depreciate with time, which is already considered.
The fact that solar prices are falling means your installation and purchase costs for new solar systems are more affordable today.
Incentives affect this factor as buyers can pay for a replacement after getting incentives. This is buoyed by the gradual drop in residential solar
pricing, which has declined from $6.75 per watt in 2014 to $3.25 per watt in 2016.
The cost approach factors in the quality of installation and age of the solar system.
Comparable sales approach
Location and geographical area matter when it comes to home appraisal for solar homes. This method works better when more solar panels are installed in an area. Solar homes fetch higher prices compared to properties without solar panels.
#7 Why Are Solar Systems So Popular?
The sudden decline in system components and a decrease in installation costs over the past 10 years is the reason for this. Recently, homeowners have been enjoying more home financing options. For instance, they are offered leased systems and zero-down purchase deals. Furthermore, installing solar power brings impacts your reputation by making you look progressive.
According to more studies, solar homes sell at 4.1% more than homes without solar energy systems. Consequently, the US Department of Energy’s consumer guide affirms that solar electric systems increase a home’s value by $20 every time it saves $1 in utility bills annually.
Ready to reap the rewards of solar energy?
Solar energy is clean and renewable, that offers considerable potential for homeowners who would love to resell their homes in the future.
All you have to do is harness it and use it to meet your energy needs. Act smart, install solar panels to increase the value of your home before selling.
Enlightened Solar is here to help you convert your residence into an energy-efficient, high-value home. Call us today!