Solar panels can have a costly initial investment. With this large purchase comes the lower electricity costs, but what about when you sell your house?
There is no exact science to determine how much solar panels will increase your home’s value. However, having solar panels that can offset expensive electricity bills, can cause your house to sell for an average of $9,000 more than it would otherwise.
Here, we will show you how solar panels on your home can increase your property value, and what you can do to make the selling price of your home even higher.
Solar Panels Impact on Property Value
Lowers Cost of Electricity
If the cost of electricity in your area is high, solar panels might be a huge bonus to potential buyers. Having solar can substantially offset electricity costs, especially if you live in an area where the panels can get a lot of sun.
Having a way to offset these electricity costs can increase the property value of your home, especially if you have enough panels that the cost of electricity during the summer is almost nonexistent.
According to studies done by the National Renewable Energy Laboratory (NREL) and Zillow, homes with solar can sell for roughly 4% more than other homes in the area. This doesn’t sound like much, but it can add close to $10,000 to your selling price.
Another study shows that there is about a 1 to 20 ratio on your house value. So for every dollar that is saved on electricity using solar panels, your house value goes up by about $20.
Allows More Expensive Items to be Offset
If you have a nice home with a lot of amenities, one thing that potential buyers might worry about is extra electricity costs. For example, a heated pool might seem nice in theory, until one thinks about the electricity costs of keeping that pool running.
Even having enough solar panels to offset those luxury items can entice buyers to accept a higher asking price.
There are also often tax incentives for using solar panels for your home. This can save the next buyer a lot of money in the long run. This can offset any extra costs that may come from luxury or other costly items as well.
It May Be Expected or an Added Benefit
In areas where solar is already commonly used or is growing in usage, it may be expected for homes to have solar panels, and you may lose out on having money by not having them. In some areas, when buying a home, roughly 80% of people want solar panels when choosing a house.
Alternatively, if your neighborhood is in the process of adding solar panels, having a few on your house can increase the price as a bonus that most other homes in the area don’t have.
This is especially true with more modern or upgraded homes, as the solar panels seem to fit the house, rather than sticking out against older, more vintage houses. Even if the person looking to buy a home doesn’t care about eco-friendly options, most people will at least enjoy the lower energy costs and being somewhat less dependent on energy companies.
Your Home May Sell Faster
Not only will the price increase, but your house may sell faster with solar panels attached. NREL found that houses can sell 20% faster if they have solar panels than if they don’t. By selling a house faster, you save more than just time.
With a house selling faster, that is less time you have to spend on a mortgage, and the high demand may cause your house to increase in price as people try to outbid each other. It also reduces the chance that you will have to settle for a lower price or delist your house for a while.
Additional Ways to Increase Your Property Value With Solar Panels
Determining how much a home’s value will increase with solar panels isn’t a straightforward answer. It depends on a lot of factors. However, to maximize your profits, there are a few steps you can take.
Keep all the documents on who set up your solar panels. If they are reputable, it can increase the price as people realize that quality panels and materials were used.
You can also keep records for any cleaning or repairs. Solar panels can last upwards of 30 years, if taken care of right, so showing that you’ve put care into maintenance can increase the value as well.
Make Sure Your Panels Are up to Date
Panels can last a long time, but older panels may not be efficient. Having newer, more efficient solar panels will convince your potential buyers that the solar panels will last them a long time and be worth the extra cost.
Purchase, Don’t Lease, Your Panels
If you can afford to purchase your panels, that is the better option as it makes the process of selling the house easier. Leasing solar panels can be complicated as they are owned by someone else, and when you sell, the buyer has to go in and make a new deal with the owner or lose the solar panels.
If you have no other option but to lease, try to time the lease ending with your selling of the house, or work with your buyer to make the situation easy for them.
Solar panels are a great investment. They can easily last up to 30 years and need minimal maintenance during this time. Despite the initial cost, solar panels can benefit you in the long run with lower energy bills and tax breaks.
When it comes to selling your home, solar panels can help you increase the asking price more than other homes in your neighborhood. Knowing that these panels will offer them lower costs in the long run, and offset any large, luxury items they may have will convince many buyers that the house is worth it, and may even cause your house to sell faster than it would otherwise.