Installing a solar system in home has considerable benefits such as reduction in electricity bills that makes it easier and cheaper to run the house and in turn save money, and reduction in carbon footprint resulting in pollution free environment. However, if you are thinking of installing a home solar system to increase its market value, think again!
There are various complexities that go into selling or buying a house. As a seller or a buyer, you need to be well informed about all the details pertaining to solar panel installation so that you can make sound decisions for short and long term, both.
To get a clear picture, speak to your bank appraiser or your real estate agent, who deals in buying and selling properties day in-day out. One question that these real estate agents are asked frequently is ‘Does solar panel increase a property’s value?’ The answer isn’t a clear black or white, no matter how much emphasis solar companies put on the fact that installing these panels increases the home value. However, the answer depends on the various factors:
Each of these factors make a considerable amount of difference in understanding how much value does a solar panel adds to a home’s value.
Before we get into the details of how these factors affect in buying or selling a home, let us first look at the various benefits of having a solar system installed:
The amount of electricity produced by a solar panel depends on various factors such as the type of the panel, number of panels in a system and the amount of sunlight received. Generally, a typical solar panel produces enough energy to cater to half of the home’s electricity needs, which means you pay half of your regular electricity bills thus saving considerable amount of money.
The solar power system extracts clean and pure energy from the sun, which helps in reducing greenhouse gases that are harmful for our environment. Using a solar panel reduces the carbon footprint that helps lessen our collective dependence on fossil fuels, which when burnt produce toxic gases that cause pollution and global warming.
Despite the benefits listed above, there are various aspects of a solar system that need to be considered to decide the value it adds to a property.
An average solar panel costs about $15000-$20000. Not every homeowner can afford spending that amount. Therefore, solar companies have given an option of leasing the solar panel system, which comes with a regular fee that the home owner has to pay for the use of these panels. The lease agreement is signed for 15 years or more. This setup seems functional and beneficial until you are a homeowner however, if you want to sell your home before the lease runs out, your potential buyers will not be pleased. The bank appraisers usually do not add any value to a home that has a leased system. Breaking a lease leads to a full bill charge of 15 years or so, which is again not a good option. As a seller or a buyer, it is better to be aware of such things in advance.
A solar panel installed on the front of the house can be a total downer, as it is not aesthetically appealing. In fact, it may actually make the home look less appealing to some buyers, reducing it price further.
The area you live in plays a major role in market attraction for solar panels. The West coast, like California gets a lot of sun exposure, making it an ideal choice and preference. However, the case might not be the same in the places where it’s mostly cold and rainy.
As technology advances with every passing day, new solar panel systems are built which are more efficient and hence more desirable than the previous ones. If your system is old, even though functional, it may not appeal to buyers. The less appealing it is, the less value it would add to your home.
Adding a solar panel system to your home is definitely not a waste of money. However, it is important to be realistic about how much value one should be expecting from the addition. If you have spent $20000 on a system, it might add only $5000 to your home while selling it, though the price may vary considerably depending on the factors discussed above.
If you are interested in installing a solar panel, do it by all means to cut the cost of electricity bills and to conserve the energy, not for the sole purpose of investment or increasing the value of your property.
Feel free to Subscribe to our PropertyCluster Blog to stay up to date with our latest posts and information on Real Estate Industry or you can Follow Us on Facebook, Twitter, Pinterest and Google Plus for regular updates.