How Much Does Solar Add to Home Value?

A common question from our SITF readers.

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You’ll be pleased to know that incorporating solar panels and solar energy into your residential or commercial property can significantly increase its value.

Several studies have been conducted to calculate the average increase in your property’s value if it has solar power. It’s estimated that you’ll increase your home’s value by three to four percent after you install a solar panel system.

While solar panels typically add value to your home or residential business, there are other factors at play that can significantly affect how much it will increase.

Do Solar Panels Increase Home Value?

Yes, overall solar panels will increase home value. However, this is only true if you own the system that’s been installed.

 It’s possible to install a solar panel system through a lease or other alternative options that wouldn’t provide the solar panel system in your name.

If you do own your solar panel system, you can typically expect a three to four percent increase in the overall value of your home. These numbers may fluctuate depending on where you live.

In areas where electricity prices are higher than average, your property may see an increase of value above four percent because of the increased incentives of free power. On the other hand, if the cost of living is cheaper than average, there won’t be as much of an incentive for potential buyer’s to be overly interested in a solar panel system being included in your property.

Will My Location Affect The Value?

Different states within the U.S are also known to vary when it comes to the increased value of your home. For example, if you live in New York, you can expect to see an average of a 5.4 percent increase in the value of your home.

This increased average value is due to New York’s geographical position. The area typically receives abundant sunshine during the summer months. This makes solar power efficiency higher and thus it will be more sought after.

Other states, such as Florida, can expect a more moderate increase of 4.6 percent. Either way, these percentages lay above average because both of these states are knowing for receiving more sunshine than others.

On the other hand, those who live in the Northwest can expect a lower increase in the value of their homes. Those who live in states such as Washington or Oregon know all too well that the state is home to clouds and rain frequently and throughout the year. This type of weather isn’t good for the solar panel system and will make them produce less-than optimally. Because of this, expect a lower increase in value to your home because the financial incentives won’t be as strong for potential buyers.

Can Solar Panels Devalue Your House?

Typically, adding solar panels to your house won’t ever devalue it. However, some factors may make the increase in value to your house less than others.

These factors include:

  • The geographic position of your house
  • The weather in the area you live in
  • The type of neighborhood or area that your property is located in

The Geographic Position of Your House

Solar panels have a hard time performing efficiently without plenty of sunshine. Because of this, houses or buildings with limited roof space won’t be able to incorporate as many panels as larger roofs. Having fewer solar panels means providing less electricity and energy to a building, which will lower the overall increase in value you’ll receive.

The position of your house will also matter as any shading will dramatically affect how much energy your solar panels can generate. If even one solar cell is covered by shade on your roof, the entire system can reduce efficiency by as much as 50 percent. If your roof with a solar power system is frequently shaded by trees or other objects, you may see an increase in home value that is less than average.

The Weather Of The Area You Live In

The weather will significantly affect how well your solar power system performs. Those in states such as Arizona, southern California, Maine, New York, and Florida will all be ideal states to have a solar power system because of their tendency to receive a lot of sunlight.

Other states such as Wisconsin or Oregon will have a tougher time getting as much efficiency out of their solar panels. This is because these states are known to receive a lot of clouds, rain, and snow that will drastically affect how well their solar power systems perform.

Decreased value in a solar power system will translate into a less-than-average increase to the value of your home after installation.

The Type of Neighborhood Your Property Is Located In

It should be a shock to learn that solar panels are typically seen as an aesthetic eyesore. They’re often large, bulky, metal panels that coat the beautiful architecture of many roofs.

 Because of this, if you live in a neighborhood that prides itself on the beautiful aesthetics and architecture of the homes in the neighborhood, solar panels may not always be seen as a positive. This is especially true if the house will be marketed to wealthier people.

These people will be less concerned about the amount of savings solar panels provide and may focus more on how they look on their roofs. Because of this, expect only a modest increase in home value when adding a solar panel system to a house located in a wealthy neighborhood or area.

Is it Worth Investing in Solar Energy?

Absolutely. It’s almost always worth it to invest in solar energy. The only time it wouldn’t be beneficial to invest in solar energy is when your house is located in an area that wouldn’t be optimal for solar panels.

Most people who live in rural areas within the U.S will find that they can substantially increase the value of their homes by utilizing solar energy while also receiving endless savings on bills. You’ll also be reducing your carbon footprint in the process!

In Summary

So, is your home worth more with solar energy? It sure is. Even in areas where solar panel systems aren’t 100 percent efficient, you can expect an increase in value to your home by adding a solar panel system.

Be warned that some areas of the country will receive only a modest increase in value, but all houses will normally receive an increase in the overall value of their property.

If you’re interested in solar energy, now is a great time to jump on the bandwagon. Free energy each month coupled with an added value to your home is simply too good to pass up.

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