Do Solar Panels Devalue Your House?

Do solar panels affect resale value? The answer varies by location and system size. According to a recent study by the Berkeley Lab, solar panels are valued more if they can offset a larger portion of electricity costs. More homeowners are trying to offset higher electricity bills with solar panels. As such, solar panels increase home values. Here’s how you can get a fair assessment of your solar energy system’s resale value.

While it can be cheaper to lease a solar panel, you may be tied to a lease for at least 15 years. This will create a sticky situation if you ever try to sell your house. If you break the lease, you’ll have to pay for the entire 15-year period – potentially $15,000 or more! Clearly, the more solar panels you add to your home, the higher the resale value will be.

The price increase depends on the market and size of the PV system. According to Zillow, for example, a home with solar panels could increase in value by an average of five percent in the New York City metro area. In hot markets, this premium is almost doubled. For a six-kilowatt PV system, the price increase can be anywhere from $22,000 to $30,000, according to Zillow.

If you plan to sell your home in the future, solar panels will have little to no effect on resale value. In addition to that, homeowners who lease solar panels may face difficulties when they try to get a loan. Banks will generally not lend on properties with solar leases. Aside from these obstacles, the panels should be of a transferable warranty. A home with solar panels on a lease might have a lower resale value if it is transferred to another buyer.

While the LBL report is the leading authority on solar panels, it is not the only source of information. Zillow published a research study that found homes without solar power sold for 4.1% less than their equivalents. And the results were consistent across cities. Ultimately, the value of solar panels depends on where you live and how much energy they generate. So, the question, “Do solar panels affect resale value?” becomes more complicated as you learn about the different factors that affect their value.

While there’s no guarantee that solar arrays will add value to a home, some experts say that the installation can increase a home’s value by as much as $15,000 in some areas. And in some places, such as the Southwest, buyers are willing to pay up to $15,000 for a house with an average-sized solar array. There are also solar leases, which don’t increase resale value.

The resale value of a home with solar panels is impacted by the local utility company’s rates. Installing solar panels adds resale value, as the homeowner will be able to save $30,000 in utility costs over the life of the system. And even if you don’t plan on selling the home in the future, the savings that the solar installation makes on utility bills can increase your home’s value.