Study Finds Exact Value of Solar in Homes’ Resale Values

Solar is gaining traction in terms of commercial financing and development across the country and residential solar installations had a record setting third quarter this year. As more companies and individuals switch to solar, one question still remains: Is the cost of solar worth it in terms of a home’s resale value?

A new Lawrence Berkeley National Laboratory (LBNL) study says yes. Homeowners in California who secured extra financing to implement solar power in their homes made good on their investment in higher resale prices than non-solar homes from 2000 to 2009.

Weighing Important Factors

Many previous studies have found that solar homes are priced higher than non-solar equivalents, but no study has pinpointed the exact value solar adds to resale. The LBNL study looked to rectify that as it examined home resale data for 1,894 solar homes and 70,425 comparable non-solar homes throughout California.

The study focused on three main components: how sensitive residential solar premiums are to the system’s size and age, a comparison of premiums paid to predictions of the system’s cost and savings and an analysis of actual resale prices over time. In measuring and comparing these three factors, the LBNL study was able to come up with some concrete numbers.

Over $5,900

The report states, “Our analysis offers clear support that a premium exists in the marketplace, thus PV systems have value and their contribution to home values must be assessed.” That value? Per each kilowatt of increase in solar output, a home adds $5,911 to its resale value.

While California may seem like an outlier in terms of green-minded homebuyers and sellers, LBNL researchers intend to put their results to the test. They plan to expand their study outside the California market to compare solar values across the country.

With it easier than ever to find solar financing for residential homes, the LBNL study shows that it’s a venture worth the cost in the long run. Solar power improvements not only lower power costs, but also increase home values over time.

Alex Kirkwood is a renewable energy writer for Fusion 360, an SEO and content marketing agency. Information provided by Elements Capital Group. Follow on Twitter