Clean solar electricity and solar hot water system installed on a home in Porter, Maine

Many people ask us how solar affects a home’s resale value.  The quick answer – solar can be a huge asset when it comes time to sell your home, though there are a variety of considerations you should take into account.

Lower Utility Costs Equal Increased Value

Let’s look at the purely rational economics of a solar energy system.

In the 1998 Evidence of Rational Market Valuations for Home Energy Efficiency report (link, PDF Download) by The Appraisal Journal there’s a section they call the “Rational Market Hypothesis” which describes the relationship of market value to energy savings.

Using fixed (and very conservative) utility costs savings, compared to the cost of the investment, they are able to project an economic value for energy improvements:

Fuel costs may be considered just one of many complex factors affecting the decision to buy a home, but the same can be said about other determinants of home value—from number of bedrooms to the quality of local schools. In a rational, competitive market, the value of energy efficiency, like the value of any other housing characteristic, should reflect its marginal value to home buyers. If home buyers expect stable fuel prices, then the marginal value of energy efficiency in recent years should be $10–$25 for every dollar reduction in annual fuel bills. (emphasis added)

Note that this 1998 report reflects a very different energy situation than what we face today.  We would now argue that the $10–$25 value increase per dollar of reduction in annual fuel bills is only a starting place, as home buyers should NOT expect stable fuel prices for the future.

Over the life of a 30 year mortgage, the fuel cost/utility savings will rise dramatically as fossil fuel heating and energy resources become increasingly scarce.

In addition, purchasing solar electric is particularly attractive right now because solar panel prices have reached record lows, so the payback time is greatly reduced.

Solar as an Attractive House Feature

There is huge emotional value to a solar hot water or solar power installation in addition to the purely logical economic argument.  A renewable energy system makes a strong statement about your commitment to sustainability and the environment, which is increasingly desirable in the marketplace.

In a down market, a solar system may be the differentiator that makes your house attractive to potential buyers.

An recent article on sunpluggers.com featured a subdivision in Northern California that is using solar panels in its homes as a way to differentiate itself.

How successful is it?

“We are the bestselling project in the market right now,” [Hal Woods, president of privately owned CenterStone Communities] says. “All of our Phase 1 and Phase 2 are sold out. We expect to have the project complete in the spring of 2010. A number of other builders are scouting us and looking at the success that we’ve had.”

While the attractiveness of a solar system will vary depending on your location and potential buying pool, it stands to reason that interest and excitement about renewable energy will only grow in the future as the need to move away from fossil fuels becomes more critical, and all things “green” become more mainstream.

Both solar hot water and solar electricity are proven, mature technologies that will provide a payback for you as long as you live in your home, and a more competitive position should you need to sell your home.

Like all investments, the earlier you put solar on your house, the sooner you will reap the rewards.  As we sometimes say, payback doesn’t actually start until the system is installed!

Instead of waiting until tax time, business owners are now able to receive a cash grant for solar energy systems in lieu of the 30% tax credit.

The program is available for solar hot water and solar electric systems placed in service during 2009 or 2010, or after 2010 if construction began on the property during 2009 or 2010.

An online grant application is available at www.treasury.gov/recovery.

Applications can be submitted after the system is placed in service, or the building is under construction. All applications must be received before the statutory deadline of October 1, 2011. The Treasury will review the applications and make payments to qualified applicants within 60 days after the completed application is received.

To learn more go to Treasury Recovery. Please contact your local ReVision Energy office to learn how you can take advantage of this powerful renewable energy incentive and turn your roof space into a revenue stream!

Above is a 6 kilowatt grid-tied photovoltaic system recently installed by ReVision Energy. In addition to the 30% federal tax credit, The NHPUC is offering a $6,000 cash rebate for residential PV systems in NH.

The NH Public Utilities Commission (NHPUC) is currently accepting grid-tied solar electric system rebate applications. Systems are eligible if placed in service on or after July 1, 2008 and before September 30, 2009.

This rebate is for New Hampshire homeowners and is only for solar electric systems that are less than 5 kilowatts in size. Incentives are capped at $3.00 per watt, $6,000 or 50% of the total cost of the system, whichever is less. For more information regarding this rebate please contact ReVision Energy.

Above is a 60-tube solar hot water collector array recently installed by
ReVision Energy in Cumberland. Solar hot water systems qualify for
a $1,000 state rebate and 30% federal tax credit, making your solar investment cash flow positive from day one.

Efficiency Maine is still accepting rebate applications for solar hot water and solar electric system installations. The program officially began accepting rebates on June 29, 2009 and will continue to do so until the funds are depleted.

This is a great opportunity for people who are considering a solar hot water or solar electric installation in 2009.

Solar hot water rebates, both commercial and residential, will be awarded in the amount of $1,000, and buildings that are Energy Star or Maine Home Performance rated may be eligible for a $1,500 rebate. For all solar electric systems the rebate is $2,000.

This program won’t last long, so get your application in now!

Sending in a pre-application form holds a rebate reservation if you decided to install a system in 2009. If you would like to receive a rebate application please contact ReVision Energy and we will gladly assist you.

SunPower solar electric panels on a boathouse
overlooking Casco Bay in Falmouth

Efficiency Maine, a subset of the Maine Public Utilities Commission, reopened its rebate program on Monday June 29, 2009.

This is a great opportunity for people who are considering a solar hot water or solar electric installation.

UPDATE: The rebate program has continued into 2010!  See Efficiency Maine’s website for more details.

Solar hot water rebates, both commercial and residential, will be awarded in the amount of $1,000, and buildings that are Energy Star or Maine Home Performance rated may be eligible for a $1,500 rebate.

For all solar electric systems, the rebate amount awarded is $2,000.

In addition to the state rebates, you can receive up to 30% off a solar power or solar hot water installation thanks to federal tax credits.

The rebates will be awarded on a first come, first serve basis. If you think you are going to purchase a solar hot water or solar electric system and have it installed in 2009 or 2010 please contact our office to receive help in filling out the state rebate application.