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Articles about solar energy that focus on its solid financial returns.
Many prior studies have suggested that solar adds to a home’s value, but they have often been limited in time range and geographic scope. Now, a team of scientists from Berkeley Labs, in partnership with universities and appraisers, has found that solar unequivocally improves the value of a home, on average by an amount of $15,000 .
The data is based on analysis of “almost 22,000 sales of homes, almost 4,000 of which contained PV systems in eight states from 2002 to 2013 – producing the most authoritative estimates to date of price premiums for U.S. homes with PV systems.”
Some key findings:
- There was no statistically significant difference in the solar premium between new and existing homes.
- While not conclusive, the study suggests that solar, regardless of size, adds a special appeal to home buyers (the ‘green cachet’), meaning that smaller systems (2-4kw) may have a disproportionately high premium relative to their actual energy production.
- Solar value is “statistically similar to [market premium approaches] estimated using the income and cost approaches, methods familiar to appraisers.” ( http://emp.lbl.gov/news/berkeley-lab-illuminates ) – meaning that appraisers should be able to integrate solar valuation into already understood methods of assessing other premiums features of a home.
- The study did find that the premium for a PV system depreciated faster than the system’s output – i.e. a 1 year old system might fetch a $6/watt premium whereas an 8 year old system might fetch a $3/watt premium (even though the system is producing almost 100% of the power in year 8 as it was in year 1). On the other hand, a PV system in year 8 would have by that time repaid nearly all of the original investment to its owner, so any premium is a great deal!
So the good news for solar customers?
- You can feel confident that your solar investment will pay for itself, either over the life of the system as you live in your home, or by fetching a premium price should you need to sell your home.
- Studies like this make banks increasingly comfortable with solar, meaning it should continue to get easier to use a home equity loan or home equity line of credit product to invest in solar.
For the data-hounds, there is a great deal more information on this report, and an upcoming webinar on its findings, available online at: https://emp.lbl.gov/publications/selling-sun-price-premium-analysis .
The solar array of Scarborough-based relator Jean-Marie Caterina slashed energy bills from $600/mo to around $100/mo, and will fetch a premium price should she ever need to sell her home.
