Advocates of solar power have often pointed out that solar power for the home or business is an investment. You pay for the system upfront, and it pays you back over a few years through renewable energy credits and lower, or even negative energy bills. But according to the findings of a new study, solar power may be an investment in more ways than just decreased bills and cleaner power.
This is a question that realtors, appraisers and homeowners with PV systems have been wondering about for a long time, and now it seems the verdict in: The presence of a solar PV system on a home's rooftop increases the value of the home.
Across the country, solar-equipped homes are worth more
In a recent study done by the Lawrence Berkeley National Laboratory, researchers looked at a total of 22,822 homes in eight states throughout the U.S., and of those, 3,951 had a PV system on the rooftop, which they owned. The researchers then looked at every transaction that occurred between 2002 and 2013 of these homes as they passed between owners.
If you're a homeowner who's considering eventually owning your own PV system, the results of the study are bound to catch your eye.
The study concluded that across all states, housing and PV markets and home types, buyers were willing to pay a premium for a property outfitted with a rooftop solar PV system. The average premium across the full sample was approximately $4/W or $15,000 for an average-sized 3.6-kW PV system.
It's important to note, however, that this study focused on homeowners who owned their PV system outright, and would thus pass ownership over to whomever bought the property from them. The researchers noted that no conclusive study has been done on the premiums that would be paid for homes with PV systems owned by a third-party.
Home prices should capture the true value of a solar PV system
The number of homes with rooftop solar exploded in 2014, and as of the end of last year, more than half a million American homes were equipped with this popular form of alternative energy, Greentech Media reported.
"It's not just about the savings on your energy bill, its about adding to the long-term resale value of your home."
"As PV systems become more and more common on U.S. homes, it will be increasingly important to value them accurately, using a variety of methods," says co-author Sandra Adomatis, an appraiser who helped develop the Appraisal Institute's Green Addendum, in an interview with Greentech Media.
That's what makes this study so important: Knowing that a solar PV system can increase a home's value by a considerable margin will give homeowners a much clearer idea of the ways in which solar is a smart investment.
It's not just about the savings on your energy bill, its about adding to the long-term resale value of your home. So even if you plan on moving some day, you'll still benefit from going solar now because it commands a premium on the resale market. This will be especially true in regions where electricity prices are going up considerably each year, like New England and the mid-Atlantic.
Today, solar power is within the reach of so many homeowners – few of whom would be considered "wealthy" by any measure. But no one, not even the wealthiest among us, would ever make an investment without getting an accurate picture of how an investment is going to pay off.