Solar Panels and Home Value

Solar does more than simply reduce or eliminate your energy bills. It also increases the value of your home or business to install a PV array. According to research done by the National Renewable Energy Laboratory, they determined that every $1 in solar power generation (or utility bill savings) adds approximately $20 in your homes total value. However, this formula can change depending on various factors such as; the value of your home, location of the home and your states market, the size of your system, and the quality of the products used in the installation.

Generally, the total increase in property resale value is approximately $6,000 for each 1 kilowatt (kW) of solar installed on or near the residence. The total value of the resale value appears to increase as well when scaling up. It is also important to consider that these figures are based from current utility rates and today's real estate market. Since electricity kWh rates usually increase over time, the value of your solar power system will the bound to that cost as well, adding additional security to your investment.

Here is how we break it down to understand the value of each factor a little better:

The Value of your Home

First and foremost, what is the true value of your home? You need to determine as to the neighborhood quality, home structure quality, total square feet/size, etc., What will your homes value be viewed as in this current real estate market or in a future buyer friendly market. Decide on what will be the feasibility for selling the residence, and what solar might do directly for demand on your homes situation. Try to also consider how having complete solar power generation for your electric needs will correlate with future energy prices. Hint: assume they’ll increase over time.

This increase in home value is also determined by if the solar array has been leased or loaned to the homeowner. A system that is purchased outright will add this resale value, a system tied to debt will only add another cost to the buyer, and this value will be diminished gradually depending on the debt ratio of the energy system.

Total System Size

The larger your solar power system is, naturally, the more it will be worth. A 5kw system using the same products as a 3kw system will be worth more due to the higher amount of electricity it can produce for your home, (and your future energy demands). However, depending on the products you pick for your system and the reliability for efficiency modules might have, a larger system with less valuable modules, inverters, racking, etc.., may not scale in value to a smaller system with quality components.

Having a larger system does generally increase your homes value at higher wattages and may be worth more on your home than a system of comparable size on a less valuable property. A superb solar energy system can give additional free value to an already worthy estate.

Quality Solar Components

Another factor we recognize as being very important is the quality of products used on the system. Depending on where you go and what manufacturers your components are made matters in the solar energy industry. A 5kw system consisting of Panasonic or Canadian Solar solar panels with a complete SolarEdge or Enphase inverter system will be safer and more valuable than a 5kw system consisting of products from manufacturers that haven’t been recognized for their quality of R&D, materials, and rigorous process to design, develop, and deploy their products. The value of the solar panels warranty is also tied to the manufacturers ability to be present and functioning in 25-30+ years to honor a solar panels warranty, which is another reason your best bet is to go with products that have a brand name that’s recognizable.

Conclusion

Solar panels can do more than just helping you with energy bills, they can also increase your homes value substantially, (often adding more value than the cost of a complete system from us). This adds yet another dynamic factor on going solar as a worthwhile investment.