A common misconception is that solar power will only benefit you financially once the system has passed the average Return On Investment (ROI) period of 7-12 years. But this is not the case. Solar adds value the second it is installed and is one of the safest investments you can make for your home. Solar power is the only home investment that pays itself off along the way.
In fact, we often have customers who sell their homes immediately after installing solar, or install solar when they know they’re about to put their home on the market. This is because solar can increase resale value by the price of your solar system, or more. In a 2015 study, the Lawrence Berkeley National Laboratory found that on average, home value increased by $4 per watt of solar installed. And home buyers are more than willing to pay more for a home with solar. Here is what that looks like:
Note: This graphic uses hypothetical numbers, and only represents a possible outcome based on the findings of Lawrence Berkeley National Laboratory. These numbers are not guaranteed.
In 2015, the Institute for Market Transformation assessed the trend of High Performance Homes (HPH‘s) and “how the addition of green features affects a home’s value and sales price.” What they found was that, in comparing homes powered by solar to similar homes not powered by renewable energy, the solar homes sold for an average of $17,000 to $36,500 more. It also outlined the three main approaches to assessing home value and solar energy’s effect.
Solar systems do depreciate, however. The Lawrence Berkeley National Laboratory examined 70,000 homes in 2013 and determined that once installed, solar systems depreciate by about 9% per year.
Solar Adds Value With Tomorrow’s Buyers
However, a solar system will never fully depreciate until it is no longer in commission. By the time it has sufficiently lowered in value, the system is paid off and is now making you money through production incentives for the remainder of its 40+-year lifespan. This is why solar is a key factor in the competitiveness of a home on the market. When it comes to real estate and home value predictions, we turned to an expert. We asked Realtor Connie Sorensen, who serves Vashon Island home buyers, for her perspective on solar’s influence over the housing market. Here is what she had to say:
“Millenials & Generation X make up the largest sector of current home buyers and future home buyers. US homeownership rate rose in 2017 for the first time in 13 years, driven by young buyers who overcame rising prices, tight supply and strict lending conditions to purchase their first home.With more tech opening than the Bay Area, meteoric population growths has made Seattle (and surrounding areas) the fastest growing large city in the US with the steepest rise in median home prices – increasing by 1% per month for the last year. (source: FutureCast Forum Seattle Magazine).The younger generations are much more purpose driven and aspects of “green” building that make the world a better place resonate with them. Sustainable home features are becoming less differentiating and more of a given to incorporate sustainability into your remodel projects and new build. Now, not having green features is a huge disadvantage. Making the investment now in your home puts you in a better market position for tomorrow’s buyer.”
Conclusion: Solar Power Adds Value
The research speaks for itself. If you are looking for a profitable, fail-safe way to add immediate value to your home, there is no better investment available than solar power. If you would like to learn more about how solar adds value to your home, you can give us a call or sign up for a free site survey below. You can also visit our home value page.
A smarter energy solution is closer than you think. Take the first step today.