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Jennifer Teti-Burroughs' Blog

By Jennifer Teti-Burroughs & Susi | Agent in San Diego, CA

Does Having Solar Panels Increase the Value of Your Home?

Does Having Solar Panels Increase the Value of Your Home?

As a real estate agent, I get asked this a lot! With the increase in the cost of electricity and the emergence of solar technologies, we are seeing more and more home owners installing solar. As a homeowner (and future  solar owner) I would love to say "absolutely"!  The truth is however, not necessarily.

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If you are considering installing solar in your home, my best advice would be to do it for you and NOT for what "perceived" value it adds to your home.  As I write this, I have a solar company installing panels on my home. We interviewed a number of companies and reviewed tons of options for purchase, lease, etc.  We ultimately picked the company based on their reputation, number of installs and customer service. We did the math over and over again and we are confident that within 5 years we will have recouped our cost and be on the "savings" side of solar.

Our financial break down, estimates that after 5 years we will save anywhere from $300-$400 a month in electricity bills. As a home owner, I would love to believe that with numbers like that, I could get an additional $20-30K for my home once the solar is installed! Why not, at today's interest rates a $300-$400/mo savings is at least the equivalent of $80,000-$100,000 in loan. As a real estate agent, I know the harsh reality is that if I had to sell my house tomorrow, I will NOT get $20k-30k more than I would get today (without solar).cash

If the real estate agent in me had to have REAL conversation with the homeowner me, I would have to tell myself. That in this market, having solar is a wonderful added bonus. Buyers love the idea of having solar and they will pay for it, just not what the "homeowner me" paid for it.  The harsh reality is that they may not even give it a dollar value, they might just be willing to give us an offer as opposed to writing on the home down the street.

As our economy stabilizes and we move back into a more healthy economic time, there is a chance that my "solar" home might fetch more than my neighbors "non solar" home, but that is pure speculation and the truth is we don't really know when the market is going to turn around.

This brings me back to my original point, if you want to put solar on, the real estate agent me, and the homeowner me, say, GREAT! I think it is a great investment, especially if you are planning on staying in your home for more than 7 years.  Having solar on your home, has lots of perks, but increasing your home's value, is not one of them, today!

This might be controversial, I can imagine that the solar companies would disagree and I have seen their marketing that tries to convince you that it does add value.  The reality is,  that in today's real estate market, buyers are not willing to spend that much more for a home with solar.  This could change, and I expect it will, but don't buy solar thinking you are going to get a return on your investment if you had to sell.

If  you are thinking about adding solar to your home, I would be happy to chat with you about our experience, the companies we met with and why we ultimately chose the one we went with.  Just to be clear, I am a FAN of solar, evidenced by the fact that we are installing it on our home. I am just NOT a fan of  someone doing to for the sole purpose of "increasing the value" of their home.

Comments

By Edyta Gryc - Broker Associate,  Tue Sep 27 2011, 15:48
Great post!
By Vimy Nesmith,  Tue Sep 27 2011, 16:04
Today there's tough competition for every dollar spent, so giving yourself the edge over all the other listings in your area is a grand idea! You may not increase the dollar amount for your home, but if there is only one buyer in your price range, whose coming through your neighborhood, a feature like Solar is a real bonus, and helps lure buyers to your house. Don't forget you can receive a tax credit for installing Solar, as well.
By Kim Boulter,  Wed Sep 28 2011, 22:00
This is very thought provoking. I think other green features such as energy efficient windows, extra insulation, and a tankless hot water heater can also help draw more attention to your home.
By Andrew Herren,  Thu Sep 29 2011, 05:32
This is a very interesting question. I been licensed since 2002, but for the last year I've done energy monitoring/auditing for the government's weatherization program. I've had hundreds of hours of training and now have multiple international energy testing certifications. I've taken the question you've posed to multiple web boards and have blogged countless times on the subject. The reaction I've had has been varied mainly by region, but I will say that it is my opinion the real estate agents in general do not welcome energy retrofits that are not typical of what they usually see in their area. This will have to be a personal decision for you as a homeowner. The right person will buy your home just because it has solar power, but a large group will avoid it just because of the solar power. I listed a home with a geothermal heat pump that sat forever because buyers were afraid of both it's cost and complexity. Keep all of the information you have on maintenence and repair of your solar panels to pass on to the new owners. Make the transition as simple and understandable as possible for the new owners! Good luck.
By Lerma Sampang,  Fri Sep 30 2011, 07:30
I would say the same thing of any home improvement. I would generally say to homeowners/sellers to do them for their own enjoyment and benefit and not count on increasing the value or recouping their cost, especially in this market we are in.

I do find though that there is a big interest in solar among home buyers these days and yes, they are willing to put in more money for it thinking about the long term savings. I guess with above average summer heat we experienced this year & the soaring electricity bill that came along with it, helped create that mentality.
By Wes Black,  Fri Sep 30 2011, 17:49
Now I have a better understanding of solar power.
By Helen Oliveri,  Sat Oct 1 2011, 14:44
Fantastic blog!
By Cyndi Lesinski,  Sun Oct 2 2011, 18:04
Awesome Blog! :) I've sold a couple homes with Solar Systems. I just showed one to a client that has a 20 year lease on one. The client was impressed but it didn't impact their thoughts on value.
By Heather York,  Mon Oct 3 2011, 07:38
Great Blog! Thanks for posting.
By Incuss,  Tue Jun 26 2012, 12:27
I disagree with the conclusion of the above article applied across the US. Sunnier parts of the country have a different impact - here is an actual study of actual sales supported by statistical analysis that proves otherwise: http://eetd.lbl.gov/EA/EMP/reports/lbnl-4476e-ppt.pdf

Study conclusion: 72k California homes were involved in the study done by Lawrence Berkeley National Laboratory. The selling price of homes with solar power (around 2000) were compared against those without. According to the study, homes with solar panels sold for ~$17,000 more than homes without.
By georgepuzo42,  Thu Feb 13 2014, 16:36
Even though solar panels may not increase the value of a home they are a great way to shave off a few extra dollars from the electric bill. I think that it is a great way to help teach your kids about lessening their carbon footprint in today's society. I myself have solar panels installed on my home and it has been a nice financial benefit. With the money we have saved over the past few years we can now afford to take a tour of Europe, we are so excited.

George Puzo | http://www.dpwsolarelectric.com/

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