According to a Wood Mackenzie forecast, the US should reach 3 million solar installations by the end of this year. People are increasingly moving towards solar and it’s not hard to understand why. Federal and state-level tax benefits, solar loan advantages, inflation of electricity bills and general awareness of green energy have all come together to enable homeowners to go solar.
Solar panel and equity: A developing storyWith more homeowners installing solar panels, the real estate value of the houses needs to be revised. This poses an interesting question for homeowners and people looking to buy houses – is there equity in solar panels? Lawrence Berkeley National Laboratory (LBNL) first attempted to answer this question back in 2013. The research compared thousands of solar and non-solar houses in California and concluded that each 1-kilowatt solar array adds about $5,900 to the home’s resale value. But California was already the solar hub of the United States and it didn’t paint an authentic picture nationwide. So the LBNL expanded their research in 2015 to better understand how solar panels influence the value of a house. The report found that home buyers were ready to pay $4 per watt of the solar array, leading to a premium of about $15,000. This gave appraisers and lenders clearer metrics to judge the real estate value of homes with solar panels.
Solar panel equity in recent yearsIn recent years, the equity in solar panels has only grown stronger. Today, buyers are specifically looking to buy solar houses and don’t mind paying a premium for that. According to a report by Zillow, houses that have solar arrays installed are being sold at 4.1% higher than non-solar houses. The rate is dependent on location but on average, this adds an extra $9,274 to these houses. In New York City, solar-enabled houses are sold for 5.4% more than average houses and in San Francisco, the premium can go as high as $41,000. The coastal metros offer the biggest return in terms of solar panel equity.
Why are people paying more for solar houses?It’s easy to figure out why people are making a shift to solar today.
- PV systems give homeowners a long-term energy solution that is also ideal for the future.
- Solar fulfills the high energy consumption needs of gen z and millennials without burdening them with exorbitant electricity bills.
- Solar arrays give more control to homeowners in terms of their monthly expenditure. People enjoy that sort of clarity and control especially if they’re looking to save.