Will Solar Add Value to My Home?
We are often asked if solar adds value to your home. So, if I put solar panels on my California home, will it go up in value? The short answer is ‘Yes’. According to Zillow during the past year homes with solar energy systems sold for 4.1% more on average than comparable homes without solar power.
Appraised Value and Perceived Value
Home appraisers in California are generally giving about a $15,000 added value to a home that has solar when it is appraised. We have seen appraisals go as high as $30,000, but that’s for a really large system on a large home. So from an appraised value, it will definitely add value to your home.
The other way it can add value to your home is from a perceived value from a potential buyer. So if you’ve got solar on your home and now you are selling it, you have buyers coming to take a peek at your home and many others.
Let’s just use these two homes as examples. So Home 1 and Home 2 are both for sale. They both are identical layouts and in identical neighborhoods. The only difference is home one had solar panels. If you are looking from a buyer’s perspective and you look at both homes, obviously the home with solar is going to have more perceived value, because generally in California someone may have a $300 a month electricity bill. So Home 2 would be paying $300 a month for electricity and Home 1 may not be paying that at all, because they’ve got solar. So if you are looking as a home buyer, you might be planning to stay in this home for 10, 15 or even 20 years. If you buy Home 2 you’ll spend $3600 paying your electric company in your first year alone. And if you buy Home 1, you might be paying zero. So extrapolate it over ten years and at minimum it is 36.000, but we know that with the rising cost of electricity it is probably going to be close to $50,000 that particular person would save by buying the home with solar as opposed to buying the home without solar.
So there are a couple of different ways that solar adds value to your home. First of all just flat out appraisal value is going to be a little bit higher. And then secondarily the perceived value to the buyer when they know they can buy a home with the solar already and not have that ongoing electricity bill.