Most people think of installing granite countertops or adding an addition to home improvements. But a more underrated home improvement that adds value to your property is solar energy. Buyers, realtors, and appraisers know homes with solar panels are worth more than those without. The exact amount of the added value depends on several factors, including your location and electricity rates.
Reduce Your Utility Bills
Adding solar roof systems to your home is a major improvement project to increase its value. In addition, homeowners who own solar energy systems benefit from property tax exemptions in 36 states.
Studies indicate that homeowners installing solar power systems see a higher value than comparable homes without. This premium is similar to the one people are willing to pay for other major home improvements, such as a new kitchen or finished basement. The difference is that with solar, the homeowner will see a return on their investment over the system’s life.
A rooftop solar system is affordable when you consider the long-term energy savings. And you can get tax breaks when installing a new system. Many potential homebuyers are interested in green features, especially after natural disasters. And many are willing to pay a premium for a home with a renewable energy system. Solar increases a house’s value because it saves on electricity costs. An LBNL study analyzed homes sold between 2002 and 2013 in eight states and found that for every dollar reduction in annual energy bills, the home’s value increased by $20.
By producing clean, renewable energy, you can protect yourself from future utility rate hikes. Additionally, some states offer credits for homeowners that give their excess power back to the grid and even property tax exemptions for a solar energy system. That’s why a home with solar is much more appealing to potential buyers.
As tensions rise between the US and Russia, many Americans seek ways to become energy independent. This includes reducing their dependence on finite coal and gas resources with high market volatility.
As a result, many homes with solar are selling faster than homes without them and getting higher asking prices. In fact, according to the Appraisal Journal, home value increases by $20 for every $1 reduction in annual electricity costs. So a solar system that saves homeowners $400 a year would increase their home’s value by $8,000. Some states also offer energy credits for homeowners that give excess power back to the grid. These credits can add up over the years and be used when a homeowner needs to pull energy from the grid on low sunlight days or during blackouts. These benefits only apply to homes that own solar panels, not those that lease them. If you plan on selling your home soon, own your solar panels or ensure that any leased systems are transferred to the new owner.
As more people embrace sustainability and green living, they’re actively seeking homes with energy-saving features like solar. Multiple studies, including one conducted by NREL, have shown that home buyers are willing to pay a premium for homes with solar energy systems. In fact, for every dollar a solar system saves in energy costs, the average home value increases by $20.
Aside from the long-term financial benefits, solar energy is also environmentally friendly. An average-sized home solar power system eliminates three to four tons of carbon emissions annually. This is a significant contribution to a more sustainable future for our planet. It’s important to note that the increased home value varies by region due to local electricity rates and the ownership structure of a solar energy system.