Will Solar Panels Increase My Home Value?
The First Long-Term Study of Solar Home Value
According to this 2011 REALTOR® Magazine, researchers were able to correlate significant increases in home resale value with the installation of solar panels on homes in California. This is exciting news, but how does the non-professional make sense of this number? How much is a solar investment worth to the resale value of your home.
The National Association of Realtors suggests that a solar installation can add an average of $5.50 per Watt in resale value. To put this in dollar terms, a fully-owned, 4,200 watt (4 kW) solar installation could add an average of $23,100 in value to your home instantly.
But what does this mean exactly? How can you use these numbers to find a ball-park figure for your own home?
How to Calculate a Home Value Estimate
When a solar company installs solar panels on a roof, the total wattage of the system is based on the power rating (or Wattage) of the panels installed and the total number of them in the array.
Since the expected increase in value is based on the total Wattage of the array, we can multiply the total Wattage of the array by the expected “value increase per Watt” and get a solid ballpark figure. This figure technically applies only in California, but it is a good place to start.
Here is an Example Home Value Increase
Imagine there is a family living in an average home. If the family wanted to install 4 kW (kilowatts) worth of solar panels, they would expect to see a corresponding rise in property value of between $15,600 and $25,600.
By the Numbers
These numbers are conclusive for California homes only, however, the National Association of Realtors recently featured these findings on their blog, and assumed an average home resale value increase of $5.50/Watt. The state did not appear to be a factor in this conclusion.
Home Value per Array
A 4 kilowatt installation would be rated at 4,000 Watts.
4,000 Watts x $3.90 per Watt = $15,600 This is the low end value increase expected for the home.
4,000 Watts x $6.40 per Watt = $25,600. This the high end of the expected value increase, according to the study.
Home Value per Panel
A standard solar panel rated at 300 watts.
300 Watts x $3.90 per Watt = $1,170. This is the low end value increase expected for the home.
300 Watts x $6.40 per Watt = $1,190. This the high end of the expected value increase, according to the study.
If This Was a Surprise…
You may have other misunderstandings about going solar also. Solar has changed a great deal in the past few years and keeping up with all the changes can be a challenge. Feel free to contact us and we’d be happy to get you up to speed.