If I install solar panels on my house, what is the long term gain for resale value of my home? Would I see a 5% increase or more in the sales price?

Asked by Jessie, Walnut Creek, CA Wed Jun 2, 2010

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9
Pacita Dimac…, Agent, Oakland, CA
Wed Jun 2, 2010
For most green-minded folks, their objective is long-term energy savings .....

Although no one can predict if such green improvements make a difference in increasing the value of the house, such improvements will attract other similarly-minded people. And environmentally aware folks are growing in numbers. And that is an additional benefit marketing appeal one can make when it comes time to sell.

Do note that there are other savings when installing solar panels in form of tax credits
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

And here's an energy savings calculator you may find helpful
http://www.siemenssolar.com/solar-calculators/

Good luck!
1 vote
Bob Georgiou, Agent, Danville, CA
Tue Jun 8, 2010
Jessie,

Assinging a number to that amenitiy in this market is really meaningless. There are too many other factors that are influencing this market to assign a premium to something that few buyers assign a priority to. To illustrate lets say your home doesnt have good flow, a poor kitchen and no updates but it has solar power. Not too many people are going to jump on that especially if the home next door has good flow, kitchen and upbates with no solar.

In a "normal" market, one might be able to quanitfy a number this way. If the power bill goes down a significant amout to enable a buyer to by a larger home (Since his monthly housing cost would drop and that money could be used to make a higher payment). The cost offset would affect a buyers debt to income favorably (more income dropping that ratio). Unfortunately many bank underwriters do not consider this criteria seriously.
Web Reference:  http://bob2sell.com
0 votes
Linda Lewis, Agent, Walnut Creek, CA
Mon Jun 7, 2010
Dear Jessie,

Adding solar is one of those quality of life improvements. It may not increase the value of your home but it may increase your enjoyment of your home and decrease your utility bills. So, it is a personal decision on what you want for your own benefit and how long you will live there to see if the cost of the improvement will balance out with the length of time you are in your house.

Hope this helps. Great question!
0 votes
Cheryl Lustig, Agent, St Peter, MN
Wed Jun 2, 2010
Hi Jesse,

I would talk to a solar expert to find out what a system would cost you and what you may save in the long term. The long term resale value is impossible to predict. A system is costly and may take 10 years or more to pay for itself. After that, the savings incurred from electric bills may be a great value to a buyer, depending on location and the market at the time.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Wed Jun 2, 2010
There are different kinds of solar panels. Some are basic plastic that is coated with the solar circuitry. Some are hard silicon. Each type has an expected life before they become worthless. The type, the age, the manufacturer could change the value.

I would not pay much extra for solar panels myself. As of now they do not pay for themselves without getting government money to put them in. If they saved me $50 a month for the next 20 years maybe I would take that amount saved and add to the price. Before taking the whole amount off I would have to calculate the interest cost of having the money tied up and paying interest on it for a long term. I doubt it would really add much when all the calculations are completed. It is a convenience, or a political statement now. It is not something that makes economic sense as yet.
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Wed Jun 2, 2010
Hello Jessie,

Im not sure if you'll get a 5% increase compared to other homes without solar panels but it will be more desirable for sure which will get you a little bit more then the house down the street. However, as I see it, solar panels are a good investment even if you are not planning to sell. Good luck and please feel free to contact me if I can assist you with any real estate matters. Thank you :)

Kamal Randhawa
Broker
510-932-1066
0 votes
Suzanne Look…, Agent, Lafayette, CA
Wed Jun 2, 2010
Hi Jessie,
I don't think the value can be quantified, however, it will help to differeniate your home from another making it more attractive to buyers.
Best of luck,
Suzanne
Web Reference:  http://www.suzannelooker.com
0 votes
Dave Sutton, Agent, Portland, OR
Wed Jun 2, 2010
There are two kinds of solar panels. One is to heat water and the other is to generate electricity. There are even two kinds to heat water. One kind is good for swimming pools for which you need a small increase in temperature for a large amount of water; the other (for house hot water) requires a large increase in temperature for a relatively small amount of water.

Since the cost of solar panels is not a function of the price of a house, it's hard to forecast a % increase in value. Two years ago when I checked electricity generating solar for my home, after all the rebates and discounts, it was still a $10,000 cost, and to recover that if I sold today would require a 2.5% increase in price. The same $10,000 cost (if indeed that's the current cost) on a $200,000 home would require a 5% increase in price.

My brief take is that if the home has a pool, a solar heater is a must. For heating hot water, people are more interested in an on-demand system. For generating electricity, the excitement is hard to attach a dollar sign and harder to attache a % gain in value
0 votes
Fred Glick, Agent, Mountain View, CA
Wed Jun 2, 2010
There are many studies out there, but it depends what your neighbors do.

If you have the same house as everyone else and you are the only one with the panels, you should see a nice bump in the value of your place because the cost to operate would be so much less.

That also helps more buyers to qualify because it would be an energy efficient home.

What values will actually be when it's time to sell, no one knows.

So, do it if it makes sense for you financially now and hope your neighbors don't try to play keep up with the Jones'!

Fred Glick
Web Reference:  http://fglick.com
0 votes
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