Solar panels often boost home values

By David R. Baker
San Francisco Chronicle

Shell out the money to install solar panels on your home, and you’ll probably recoup that investment when it comes time to sell the house.

You may even make a little profit.

A study to be released today  by Lawrence Berkeley National Laboratory found that solar boosts the resale value of homes, both new and old.

The researchers analyzed the sales of about 2,000 solar homes in California from 2000 through mid-2009 and compared the prices to those of 70,000 comparable houses without solar. On average, a solar system added about $5.50 per watt to a home’s resale value. For a home with a typical 3.1-kilowatt solar system, that represents an extra $17,000 above the cost of a comparable, nonsolar home.

During the same period, the study found that a typical residential solar system cost about $5 per watt.

“On average, folks have effectively got out of the home sale the same value or the comparable value that they put in,” said Ryan Wiser, one of the report’s authors. That’s in addition to saving on their electricity bills.
Many homeowners did better than break even. People who installed panels on pre-existing homes increased the resale price by more than $6 per watt, on average. In contrast, solar systems only added $2.30 to $2.60 per watt to the sale price of new homes built with solar included.

The study’s authors did not try to find the reason for that difference. But Wiser, a staff scientist at the lab, said it could be a matter of motivation. Homeowners who pay to install solar on an pre-existing house are keenly aware of the cost and don’t want to lose their investment.

“The homeowner puts that $5 per watt investment on their home, and if they sell the home the next year, darn it, they want to get that $5 per watt back,” Wiser said.

Developers who sell new solar homes, however, think of the system as just one of the home’s attributes. “Their goal is not necessarily to recoup the investment on any individual item,” Wiser said. “They want to sell that home and move on to the next.”

The study will be welcome news to solar installation companies.

Gary Gerber, president and chief executive officer of Sun Light & Power in Berkeley, said customers interested in the financial pros and cons of a solar system often ask about the effect on a home’s resale value. More important, home appraisers are often uncertain how to value what to do with residential solar systems, he said.

“I think appraisers are really casting about for guidance on this issue,” said Gerber, who is also president of the California Solar Energy Industries Association, a trade group. “They certainly set the price that the bank will loan. And if they and the bank aren’t in agreement on the value, it really doesn’t matter what the buyer and the seller want.”

Read the report here.

17 Comments

  1. Energy Moron

    California has net metering so the value will be realized as promised

    A bill has been introduced in Texas to undo the bizzare interpretation of the PUC of net metering, but until this situation is rectified it is the case that Al Gore’s smart meters, which are claimed on Repower America to empower solar owners to sell electricity back to the power companies, have only cost solar owners money since typically one can only get a fraction of what they pay.

    #1
  2. ntangle

    Terrific. Maybe my 15W panel will boost my house by $83. Just don’t tell HCAD.

    #2
  3. David

    This may be okay for the seller, but it sounds like it could be a bad deal for the buyer. You’re buying a house, and paying full price for a solar panel system. I assume this immediately increases the taxable value of the home, so you have to pay more property taxes.

    I’ve heard that property tax appraisers are not allowed to increase the taxable value of a home because of a solar panel installation. Are they required to discount the value of a home if it’s sold with solar panels?

    #3
  4. sharky

    I am not knocking solar at all, quite the opposite in fact. Just make sure you know who to go after if your roof starts leaking. Seriously.

    #4
  5. Bill in Houston

    How much does a 3.1 kilowatt system cost?

    Solar panels are about $1000 for a 250 watt unit. That’s $12,000 for just the panels. Then there is the cost of an inverter (or inverters depending on configuration), batteries, switching, controllers, cabling. Then there’s labor for installation and configuration. The whole shebang? My cocktail napkin calculation puts this over $20,000. Can your roof take that weight AND a heavy downpour? I’m betting no. That $20,000 works out to over $6.50 per watt COST, and I’d bet I’m missing something.

    This article presents information from California about Californians, NOT Texans. I’m sure many Texans would say, “Git that ugly POS off my roof pronto!” I would, because I don’t want to have to maintain it. This silliness might sell in Austin, our own Granola-land of nuts and flakes, but probably not here.

    Oh, and I forgot to mention HOMEOWNERS ASSOCIATIONS. So don’t forget to add legal fees over being sued.

    #5
  6. Energy Moron

    Sigh, as somebody who has solar…

    ntangle and David: Texas law prohibits solar panels from being taxed. The HCAD come out and appraised them but only for the file (I about flipped out at this, to be sure, and did protest with them).

    sharky: i have a standing seem roof so I have no holes for the solar PV but rather is clamped through the seem. The city permitters did sort of flip out at this but engineering calculations show my roof to be good to 176 MPH (something else will fail first)

    Bill: My system cost $5.75 a kwh. No problem with the HOA. Have comments on my yard all the time… about the garden. Very rarely do folks comment on the panels since, well, the garden is what gets the visual attention. Love the system (but don’t get me started about solar hot water). Texas used to have the best laws in the country for solar (here was the original net metering)

    http://www.serconline.org/netmetering/stateactivity.html

    This is now out of date as it was changed when the Al Gore stimulus funded dumb meters were forced down our throats and hurting solar owners. There is a bill to rectify this in the Texas Legislature

    http://www.legis.state.tx.us/tlodocs/82R/billtext/pdf/HB00340I.pdf#navpanes=0

    I actually like this bill since previous bills for net metering also had a lot of subsidies for solar (I oppose these; tax breaks, well I plead guilty to legally keeping MORE of MY MONEY). This bill contains none of these solar subsidies and merely restores the status quo before…

    Al Gore/stimulus funded worthless dumb meters were installed.

    #6
  7. Energy Moron

    David:

    Just got my yearly assessment actually.

    Went up about 4%, which is less than max allowed by law for a change but does reflect the still increasing prices here inside the loop.

    Bill: The $5.75 is before the tax rebate which I get to keep more of MY MONEY away from the government

    #7
  8. ntangle

    My system cost $5.75 a kwh
    ———————-
    Sigh. I pay about $0.10 / kWh.

    #8
  9. John R

    Only a fool or a faux “save the planet” guy would put these things on their houses. They don’t work. They don’t add value and in fact can take value away from your home. See what the aged solar panels have done to values.

    This is a smoke and mirror al gore hysteria campaign. Maybe he will sell you some Carbon Credits. LOL at this entire deal.

    You will NOT get the money back when you sell your home. It may hurt when you sell it. And it isn’t your realtor or appraiser’s fault. It is yours. These things should be sold on late night cable. This would not be subsidized by the liberal gov’t if it worked. But it doesn’t.

    While you are out buying solar panels, pick up an 8 track, a VCR and some carbon credits for me. And feel free to email gore: algore@theseidiotswillbuyanythingitellthem.com

    #9
  10. Bill J.

    ntangle
    April 22, 2011, 6:49 AM

    My system cost $5.75 a kwh
    ———————-
    Sigh. I pay about $0.10 / kWh.

    Wow that means the system would pay for its self in less than 5 years, even faster a energy prices go up. So even if it adds nothing to your home value it saves you Money(to quote a furniture guy) and after Ike we had AC cold beer and watched DVD’s.

    #10
  11. sharky

    “Liberal” government? You mean the same “liberal” government that is employed by industry (much like media is) and banking to socialize the research losses, military campaigns, stock market crashes and other things that go into corporate dominion? The same government that enables monopolistic powers for corporate behemoths like General Electric….did someone say “green” energy?

    Shave your back and learn to walk upright. Nature endowed man with the faculties for reasoning. Please don’t let yours atrophy.

    Solar panels are working all over the world. They are a freedom-enabling technology, which is something I hear you guys claim to champion on AM radio. Just don’t accidentally shoot a bullet hole through one of them while you are out hunting squirrels for dinner.

    #11
  12. James

    How do solar panels hold up to hurricane-force winds? And do you have to drill holes in your roof for their installation? I think Energy Moron mentioned clamping them down between the seams in his roof, but I don’t understand what he means. My only concerns about this in Texas vs. California is: 1. we actually get rain here, and holes in the roof are never a good idea; and 2. we get the occasional hurricane (which might allow wind to get underneath the solar panels and turn them into sails). Other than that, they’re a good idea in my book, if they could just lower the price a bit. Anyone have a good analysis of the cost of first generation home solar panels’ cost vs. the cost of today’s setups?

    #12
  13. Solar panels put out such a small amount of energy that there is no way that they can be justified. Solar panels are just a feel-good item for those wealthy enough to throw away their money.

    #13
  14. ntangle

    energy bill wrote: after Ike we had AC cold beer and watched DVD’s.
    ————————
    My power was out for all of 2 hrs. I live near a CP hub, w/ HV lines from 3 directions. But since I work at home, it wasn’t party time. Luckily my ATT land-line & DSL never quit at all, unlike my Comcast (on & off for a day or so). But you might want to recheck your arithmetic re the 5 yrs. Keep in mind that solar’s average availablity might be 20 or 25% of its peak rating. So you might want to multiply the 5 yrs by 4 or 5.

    #14
  15. Tejas

    ntangle – you were one of the few lucky ones during Ike. I didn’t have power for a week. And in the country, that means no water, as the water well doesn’t work. I ran a generator a few hours/day to keep the frig from melting down and to make a pot of coffee, but I don’t have the set-up for running the water well (240v). No land-line, as a tree uprooted and took the phone line with it. Took a week to repair. No cell service unless I drove 25 miles to hit a good tower – our local one got knocked out. Not exactly a picnic, but it could have been worse. At least the temps weren’t in the 100′s like Rita.

    I’m thinking a free-standing system might be something to look into. I could still use it when I change from dblewide to regular house.

    #15
  16. Rick

    Tejas, for $20,000 you could have one hell of a natural gas generator or a 5 KW gasoline generator, available from Lowe’s for about $650. The gasoline you would need to store in a 55 gallon barrel that you could buy for about $50 plus the 55 gallons of gas @ about $4.00 a gallon which would equate to about $850. That leaves $19,150 for the beer!

    #16
  17. Jim B

    With all due respect, the comments that are negative about solar (too expensive, won’t survive a hurricane, leaky roof, “don’t work”, “don’t add value”) are just naive and short sighted.

    Can you blame a homeowner who has been forced by failing electricity deregulation to find ways to mitigate rising costs?

    I know we’re in Houston, the energy capital, but really, we’re gonna buy all the oil the industry can find and process. Don’t worry! Jobs are not at risk.

    I know for a fact, that with TRUE net metering our small business would break even on a solar array in a couple of years. We could generate significant excess power on weekends and during non business hours (and we’re not a retail store). But without true net metering, a stiff requirement that our REP buys the excess power at a reasonable price, it just doesn’t quite make the strategy attractive.

    We’ll keep watching, running the numbers, and following the legislative updates. “Feel good item” my eye. It’s just plain business. The REP’s and Producers will cry a river when we’re no longer forced to buy their leveraged, over priced, unreliable power. I, for one, cannot wait.

    But that’s just my opinion.

    #17