One of the most persistent concerns homeowners have when considering a solar installation for their home is whether or not an installation will add value, in case they ever want to sell.
In the past, some realtors have said it doesn’t, while other said it does. And now, thanks to an in-depth study by the Lawrence Berkeley National Laboratory (LBL) released today (April 21), there’s proof that on average, a solar installation adds roughly $17,000 to a home’s value at resale.
“When someone makes a $10-, $20- or $30,000 dollar investment on a rooftop, they were making a bet. They didn’t know that they were realizing full benefits of the solar installation. This tells homeowners there are good prospects for selling a home with a photovoltaic system installed,” said co-author and LBL staff scientist Ryan Wiser. “There have been claims that there is a positive impact and not a positive impact in the past. But those who have been looking at this have relied on anecdotal evidence and past history. There hadn’t been a past study on it though. Hopefully, this will be helpful for that market and its growth.”
The study analyzed the sale of more than 72,000 California homes, 2,000 of which had a photovoltaic system when they sold. The homes were sold between 2000 and mid-2009.
“This is the most comprehensive and data-rich analysis to date of the potential influence of PV systems on home sales prices,” Mark Thayer, co-author and San Diego State University Economics Department chair, said in a press release.
“The research finds that homes with PV in California have sold for a premium, expressed in dollars per watt of installed PV, of approximately $3.90 to $6.40 per watt,” the lab said. “This corresponds to an average home sales price premium of approximately $17,000 for a relatively new 3,100-watt PV system.” That’s the average size of the solar systems installed on the homes, according to the lab.
The lab also found that sometimes the return on investment, which averaged $5 per watt installed, was outweighed by the return on investment at time of sale. Not to mention the ancillary benefits of reduced electric cost and net metering.
The research was limited to California for a number of reasons.
“Doing this kind of study, you need to have a good robust sample of homes to select from,” Wiser said. “In most other states, the number of solar homes are smaller than in California. Only with California could we access the amount of data needed to do this study.”
“California’s different than other states. It has a different retail-rate structure,” Wiser said. “You can’t extrapolate one for one; that would go too far. But the idea that solar systems increase the value of the home, I think that can be extrapolated to other states,” he said.
Image courtesy of Lawrence Berkeley National Lab.