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Solar panels reduce your carbon footprint and increase your energy savings , but did you know they can increase the market value of your home ? Our guide explains how and tips to increase your added value with a quality system from a top tier solar company .
How do solar panels increase the value of a home?
Most homeowners know that solar panels can reduce energy costs and carbon emissions . These long-term savings can help increase the value of your property . According to the National Renewable Energy Laboratory ( NREL ), for every dollar saved on your energy bills, the value of your home increases by $20 . For example, if your solar system saves you $700 a year, your home's value will increase by $14,000.
Real estate agents and appraisers have found that this increases the market value of your home . Zillow 's 2021 Housing Trends Report found that 67% of homebuyers consider energy efficiency a "very, very important" home inclusion . According to a large-scale study of solar homes by the US Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab) , home buyers are willing to pay $15,000 or more .
This drive for energy efficient homes leads to higher selling prices for sellers . Potential buyers will pay 4.1% more for a solar home , or about $9,274 . These improved resale values are higher in some real estate markets. Buyers in New York, for example, will pay $ 23,989 more for a sunroom and a comparable home .
Factors affecting the added value of solar houses
Installing a solar power system does not always guarantee an increase in home value . Many factors will affect the value of your property, such as your location, electricity costs and solar power system . We will discuss this in more detail below.
Local electricity rates
In areas with high electricity consumption , solar power is more efficient , generating your own energy can reduce your monthly electricity bills . The US Energy Information Administration ( EIA) found that the average residential utility bill is $117.46 per month. If your monthly electricity bill is significantly less than this amount , you will not save any money by going solar . States such as California , Connecticut, Texas and New York have above average electricity prices .
The solar market
States with growing solar markets are encouraging solar conversions through special laws and incentives that benefit homeowners . These states are ideal for solar homes and offer the best potential for high value properties . The Solar Energy Industries Association (SEIA) has ranked the following states among the top 10 solar markets .
- California
- TEXAS
- Florida
- North Carolina
- Arizona
- Snowfall
- Georgia
- New Jersey
- Virginia
- Massachusetts
Residents of states with lower solar market growth may not benefit from market rates for solar energy .
Solar panel ownership
If you're thinking about selling your home after installing solar panels, it's important to choose the right financing option. You must legally own a solar panel system to include it in the sale of your home . Being a homeowner is also important to take advantage of available solar incentives and reduce solar panel costs . Only homeowners who buy or borrow for their system have their own panels.
Other financing options make it difficult to sell a solar home . If you choose a solar lease , your solar service provider remains the legal owner of the system. To sell your home, you must buy out the lease or transfer it to the new owner . Depending on the remaining term of the lease, this larger payment may be required. After that, the buyer can start a new lease with the solar company .
You can transfer the lease to the new owner by deducting the remaining time from your contract . It does not require a large deposit from either party, but the new landlord must meet the criteria to become the new tenant, including a credit check. If you can't find a buyer who meets the solar company's lease criteria , transferring the lease can delay the sale process .
The state of the solar system.
Homes with modern solar systems are worth more than homes with outdated systems. Solar systems typically last between 25 and 35 years, so a home with a 15-year system can provide another 10 to 20 years of service. Keep this in mind if you are considering selling a home with a solar system that is more than 10 years old.
Homeowners must service and maintain their systems to maximize their home's potential sales . High quality solar panels usually have a longer warranty than cheaper panels .
Manufacturer warranties cover panel defects or issues, while manufacturer warranties cover installation errors. Use these warranties to make the repairs and upgrades needed to keep your system in good condition . Additional coverage, such as a power output warranty, protects the output and power output of your panels during the warranty period .
If you're considering buying a home with solar panels , review all system documentation, including maintenance information and warranty coverage . These details should include any replacements or modifications made during ownership . If you are considering selling your solar home, do so on a high note.
How do solar panels affect property taxes?
Installing a solar power system increases property values , so property taxes will also increase. However, 36 states have laws that exempt solar owners from paying higher property taxes . These laws vary from state to state and vary in their scope. Some states offer a 100% exemption, while others limit the exemption to a certain number of years. Check with your local state legislature to find out the exemption laws in your area.
Maximize investments in solar panels
Choosing the best solar technology will maximize the value and resale value of your property . Consider investing in a high-quality, high-efficiency solar panel system . The following solar programs and upgrades can help you reduce your upfront costs while maximizing the return on your investment .
Incentives, credits and solar rebates.
Federal, state and local solar incentives can reduce your system costs. For example, the federal solar tax credit provides a tax deduction equal to 30% of installation costs. Check out state and local incentives in your area in the Public Incentives for Renewable Energy and Efficiency (DSIRE) database . You can also take advantage of city- and property-specific discounts .
Net measurement
Most quality solar systems produce more energy than your home needs. Net metering programs allow homeowners to sell this excess energy back to the grid to receive a credit on their utility bills or annual payments . Grid programs vary across the country and can be implemented at the state level or by a specific utility company . Visit State Incentives for Efficiency and Renewable Energy ( DSIRE ) to learn more about programs in your area .
Solar battery
If the grid is not available in your area or you want to store excess energy for your own use, you can install a solar panel instead . You can use this power in the dark, in low sunlight, or at night. Homeowners who want to live off the grid without connecting to a utility company can use solar panels to power their home. If you choose to stay connected to the grid, solar panels can offset electricity at peak times, increasing your energy savings .
Our advice
The installation of solar panels provides long-term clean energy and increases the value of your property . How much your home will increase in value depends on your location, local policies and electricity rates , but most homeowners will see a significant increase thanks to solar energy. Homeowners looking to sell a solar home must keep the system up to date and clean. Buyers interested in a solar home should ensure that the system is up and running and available for transfer of ownership.
If you're considering adding a solar system to your home, we recommend getting quotes from at least three solar companies to find the best equipment and financing options .
Solar Panel FAQ
Can Solar Panels Increase Property Value?
Yes, solar panels can increase the value of your property. Although the added value may vary by location, the National Renewable Energy Laboratory (NREL) estimates that for every dollar saved on your utility bills, the value of your home will increase by $20. This results in a higher market value when you sell your home.
Is it hard to sell a house with solar panels?
No, it is not difficult to sell a solar home in the right market. In a state where the solar market is booming and electricity prices are high, it will be easier for homeowners to sell a solar home. Although homes are being sold with fewer appliances, fewer buyers will want a solar-powered home if the benefits are minimal.
Do solar panels increase the appraised value of a home?
Yes, solar panels increase the appraised value of a home by an average of 4.1%, according to a Zillow study. These prices vary depending on your location and the strength of the solar market in your area.
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