A new study headed by Lawrence Berkley National Laboratory and the Appraisal Institute shed new light on the embrace and return on investment evident in home with photovoltaic solar energy. The study represents the most comprehensive analysis to date on sales of homes equipped with solar photovoltaic panels, intended to fill a gap in understanding of solar by real estate and appraisal professionals.
After reviewing sales and technical data for homes in eight different states from 2002-2013, here is what they found:
Homebuyers were consistently willing to pay a premium for homes with solar photovoltaics.
The level of premium varied slightly, but the presence of a price premium was evident across a variety of states, markets and home types, including both new and existing. Also, the premium homebuyers were willing to pay for solar homes remained fairly consistent, even as the gross installed costs for new photovoltaic systems decreased dramatically.
Across all homes in the study, the photovoltaic homes garnered an average premium of $4/watt of installed solar power. When compared to a net cost of around $1.34/watt on homes with Holy Cross Energy and federal tax credit incentives, this puts solar high atop the list of home improvements with the best potential return. This results in a potential return on investment with sale of the property alone, barring any owner-realized utility savings, at close to 300%.
By comparison, renovations that bring in the greatest return on initial investment according to US World New and Report include a deck addition (87.4%) and a minor kitchen remodel (82.7%). Home improvements with lower returns include bathroom additions (60.1%) and a master suite addition (67.5%). The results of the study showing the outstanding premium homebuyers are willing to pay for solar puts solar in a convincingly strong position to provide far more potential return on investment than many other conventional home improvements.
An important note – The photovoltaic systems within the study were homeowner-owned, rather than leased systems. Leased systems have a different ownership model, which may not necessarily add to the equity of the home, since the ownership of the system is separate.
Active Energies provides FREE solar site analysis to home and business owners interested in solar photovoltaics. Our solar experts can walk you through system options, pricing and incentives and handle all of the paperwork to reserve valuable rebates for your project. Call us today at 970-306-4233 or contact us online.