How Home Solar Systems Can Increase Your Property Value

In recent years, installing solar systems on residential and commercial buildings has become the talk of the town because it increases property value and produces sustainable energy. The solar industry has grown at an average rate of 25% in the past ten years, with homeowners realizing the numerous economic and environmental benefits of solar energy. 

Let’s discuss how home solar systems will increase your property’s value and the critical factors that directly influence the worth of solar-installed homes.

Do Solar Panels Increase Home Value?  

Solar panels have become increasingly popular as an environment-friendly addition to homes. But their worth goes beyond environmental benefits. According to Zillow’s research, properties with solar panels are worth approximately 4% more than homes without them.  

According to the National Renewable Energy Laboratory, a home’s worth increases by $20 for every dollar solar panels save on electricity bills. 

These numbers demonstrate the benefits of solar energy, which make it an excellent investment for current homeowners and potential purchasers. By knowing the variables that lead to this increase in value, you can confidently evaluate solar investments and make future-focused decisions for your house.

How Do Solar Panels Increase Your Property Value?

Solar panels help increase the appeal of your house. Let’s take a look at them individually. 

Higher Market Appeal 

Consumer preferences have changed in the last several years, with more buyers placing a higher value on energy-efficient and ecological homes. Properties equipped with solar energy systems are increasingly in demand as they align with the trend towards eco-friendly lifestyles. 

Incorporating renewable energy options into a property enhances its appeal by positioning it as a modern, forward-thinking investment. Homes with solar panels attract buyers who are not just looking for a place to live but a residence that reflects their values of sustainability and innovation. Moreover, these solar panels reduce a home’s carbon footprint and offer the practical benefit of lowering energy bills, which may benefit homeowners.

Increased Home Equity

Home equity refers to the difference between the market value of a property and the amount owed on it. Installing solar panels can increase a property’s market value and, ultimately, its home equity. 

Good home equity can benefit those who want to take out a home equity loan. A higher home equity position can lead to better loan terms, lower interest rates, and increased borrowing power.

Tax Benefits

One of the first things you should do when installing a home solar power system is ascertain how it will impact your property tax. Some people may worry that their property tax may go up with the installation of solar panels since assessors may increase the estimated value of their homes. However, the great news is that homeowners get a solar panel property tax exclusion in California. 

The solar panel property tax exclusion excludes the value of a solar energy system from the assessment of a property’s taxable value. This means that even though the value of the property may increase with the installation of solar panels, homeowners will not be penalized with higher property tax bills! Additionally, the federal solar tax credit allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes, providing further tax benefits.    

Return Over Long-Term    

Some may be concerned that home improvements depreciate over time as new trends replace the old ones. However, with solar panels, you don’t have to worry. They are a long-term investment that keeps adding value to your property as long you maintain them. 

Additionally, solar panels come with a reasonable warranty period so that they can be replaced in case of damage. It is worth noting that solar panels generally have a life cycle of 25-30 years. As energy prices continue to rise, the value of a home equipped with solar panels is likely to increase over time, providing a solid ROI for homeowners.

Factors Influencing the Value of Solar-Installed Homes 

The decision to install solar panels can significantly impact your home’s value, but this can vary based on several critical factors – from the location of your property and local electricity rates to the ownership of solar panels and their condition. Understanding these factors can help you make more informed decisions about going solar and maximizing your investment. Here are a few factors that influence the value of solar-installed homes:

Location

The value of your property can be significantly impacted by its location. As a result, the location of a home affects its value, especially in places with a lot of sunlight and high electricity costs. 

Additionally, installing solar panels might raise your house’s value if your community or area prioritizes environmental sustainability. Government incentives and supportive laws may also be necessary to increase the desirability of solar-equipped homes, depending on where you live.

According to US solar market reports, installing solar panels will likely increase the value of your property if you live in one of these states. 

• California
• Colorado 
• New Jersey
• Massachusetts
• New Mexico
• Oregon
• Florida
• North Carolina
• Nevada
• Georgia

Solar Panel Ownership vs. Leasing    

It is essential to delineate the difference in impact on home value between owning a solar energy system and leasing one or participating in a Power Purchase Agreement (PPA). 

Ownership of the solar energy system helps increase the value of your house. Research indicates that homebuyers are ready to pay a higher price for a solar-powered home. In fact, a Lawrence Berkeley National Laboratory study found that solar added nearly $15,000 to a property’s worth.

With a lease or PPA, the solar or leasing company owns the solar energy system; thus, the value of your home does not go up with the installation of solar panels. However, expect to see reductions in your electricity bill, so there are benefits to opting for a lease or PPA vs. ownership!  

Many people also wonder what happens when a house is sold. When bought outright, solar panels are transferable from the home seller to the buyer. 

Lastly, homeowners leasing a solar system can purchase the system outright, assuming control of the system while enjoying the benefits of the likely increase in the value of their home.    

Electricity Rates 

The cost of electricity is another critical factor determining how valuable solar panels are for homeowners. Solar panels can significantly lower energy costs and electricity bills, providing prospective solar purchasers with a financial incentive. Lower energy costs can increase a home’s value and improve its market appeal. 

Condition of Your Solar Panels  

The performance of your solar panels plays a crucial role in the value they add to your home. Their condition directly affects longevity, efficiency, and overall functionality, making regular maintenance essential. Older or damaged panels may lose efficiency, reducing energy output and potentially leading to costly repairs.

By keeping your solar panels in good working order, you ensure consistent energy production, reduce electricity costs, and enhance the overall value of your property. The great news is that, on average, your solar output from systems can be at an 89% efficiency or higher even after 25 years!

Moreover, properties with newly installed solar panels sell quickly and for a higher price than those with older panels. Replacing or updating an old solar energy system is a worthwhile investment.

Boost Your Property’s Value with Parco Solar!

Making the switch to solar power doesn’t have to be complicated.  At Parco Solar, an AAPI-owned company, we’re committed to making your transition to solar energy simple, effective, and affordable. Serving the greater Los Angeles area, Orange County, and Inland Empire, we’re your local experts focused on delivering value coupled with an exceptional customer experience, both at installation and with post-installation maintenance.

We provide top-quality solar panels, inverters, battery storage, and more at transparent prices, assuring you of the best value. We also offer a free energy efficiency audit to help you understand your energy use and identify ways to save even more. Our team ensures that your installation process is as smooth as possible so that you can easily switch to cleaner, green energy.Start saving money, and the planet today—contact us to get started!