Do Solar Panels Increase Your Home’s Value?

Solar panels offer a variety of benefits to homeowners. They are increasingly affordable and money-saving. They work in a variety of climates, even when the electrical grid goes down. But does solar increase home value, too? The answer is yes. Not only do solar panels help you save on energy costs and move toward greener forms of energy consumption, but investing in solar panels can also increase the value of your home.

That’s exciting news for many homeowners. If you’re thinking about installing solar on your house, you’re probably balancing costs and wondering, how much do solar panels increase home value? The answers may vary, of course. A qualified expert is your best resource, but here’s a starting place for your decision. And to make sure your home is covered in the event the unexpected happens, connect with Farm Bureau.

How Much Does Solar Add to Property Value? 

If you’re like most homeowners, you have a long list of potential home improvement projects that will add value to your home. Solar power is just one of many options, so it’s important to look at all the ways it can bring value to your life. 

When you’re deciding how worthy this project might be for you, it’s a good idea to think about not just the monthly cost savings that comes from generating energy through the panels, but also the impact that they’ll have on your home’s value. That impact can come from a couple of considerations.

Consideration #1: Homes With Solar Sell Faster

Solar panels are a selling point for many buyers and can help in the sales process. In 2021, home listings with solar spent 13.3% less time on the market than homes without solar. That’s a significant difference, especially since the cost of installing solar has been going down over time, too.  

Consideration #2: Solar Panels May Increase Property Values

In addition to helping your home sell more quickly, you may also receive a higher price for it. Home listings with solar power are 24.7% more likely to sell above the asking price. Solar panel appraisal value varies widely — we’ll get into why — but this general increase in price can help recoup the cost of installing solar panels.

Factors That Affect Solar Panel Appraisal Value

The installation of solar panels will impact your property value, but the amount will change based on a variety of factors. Here are some of those factors. 

Factor #1: Ownership of the Solar Panel System

This is one of the biggest factors at play when determining how much value solar panels can add to your home. If the panels are leased or subject to a third-party power purchase agreement (PPA), they may be counted as personal property (like your furniture), which does not stay with the home. If that is the case, then the panels wouldn’t be appraised as part of the value of your home.

Similarly, if the system is financed, there may be a lien on the panels. That means the solar panel system cannot be appraised as part of the home without additional steps. 

The only way to guarantee that the panels will be included in a home appraisal is if you own them outright. 

Factor #2: The Solar Panel System Specifications

How much does the system offset your energy costs? If the system creates a high level of energy output, then it is likely worth more.

The age of the system can also impact its value. Just like the age of a roof, HVAC system or appliances, the age of a solar panel system can be a positive or negative for buyers. An older system may suggest repair and/or replacement costs that could deter them. So, a newer system is worth more and will likely result in higher appraisal value.

Factor #3: The Community

Your community and the region in which your home is located may have a large impact on the value your solar panels add to your home. The first and most obvious reason is that the amount of sunlight the panels receive will impact their value.

If you live in a generally cloudy location, the appraisers and potential buyers will likely see less value in having a solar panel system. However, if you live in a very sunny area, then the amount of power they generate will be higher and more valuable.

The prevalence of systems and cost of new systems in the area can also impact the appraised value. If they are widespread or relatively inexpensive to have installed, your system may not be appraised as highly. 

Low electrical costs in your area can bring down the appraised value of a system, as potential buyers don’t see that it will impact their monthly cash flow as much as in areas where the cost of electrical energy is higher.

Finally, the real estate agent or company’s familiarity and comfort level with solar can also impact the appraised value. Some just don’t understand how to value solar panels. So, it’s important to ask about their level of experience as you look for a realtor to help sell your house. 

Protecting Your Future

Investing in solar panels is just one of the many ways you can protect your home, your livelihood, your family and your future. Reach out to Farm Bureau today to discuss your insurance coverage.