By Lee Sherman
If you care about the environment, you may be considering adding solar panels to your home. But did you know that this move can also increase the value of your home?
According to The National Renewable Energy Library (NREL) every dollar saved on energy increases your home value by $20, a 20 to 1 return on your investment.
We’ve covered investing in the solar industry and with renewed government attention to climate change, it’s still something to consider. But adding solar panels directly to your home is a good way to think globally and act locally. The initial outlay for a solar array is about $15,0000 so it isn’t cheap but once it is in place, when compared to traditional fossil fuel energy, it can be a good deal at less than half the cost (three to six cents per kilowatt hour compared to five to 17 cents for fossil fuel). It will take some time to recoup the cost of installation but when it comes time to sell your home, having a solar array already in place will increase your home’s value, especially with the current frenzy for green energy.
According to Zillow, adding solar panels to your home can increase its value by 4.1% more on average than comparable homes without them. In some of the hottest markets, solar adds even more curb appeal. In New York it’s 5.4% and in San Francisco, it’s 4.4%. In New Jersey homes with solar are going for 9.9% more than comparable homes without.
The most comprehensive study, conducted by the Lawrence Berkeley National Laboratory, concluded that home buyers are willing to pay an average of $4 per watt of solar installed. That means a home with a standard 6-kilowatt solar system can add $24,000 to your home’s resale value. The researchers analyzed almost 22,000 home sales, almost 4,000 of which contained solar energy systems in eight states from 2002 to 2013.
And the price for solar is coming down. According to the Solar Energy Industries Association (SEIA), the price to install solar has dropped over 70% since 2010. Compare this to National residential electricity rates which have gone up by 15% in the last decade.
If you’ve shied away from solar in the past because you didn’t want the hassle of the maintenance, be aware that more recent solar panels are self-cleaning (with rain) and are made to be weather-resistant. If you live in a place where it doesn’t rain much, you will have to hose them down occasionally but that doesn’t seem like much effort when compared to the value they add.
Green energy advocates have long known that altruism only goes so far. We’ve seen this with the Green New Deal which is becoming popular, not because our planet is in imminent peril (it is) but because it has the potential to produce jobs and reduce our energy dependence on foreign powers who can manipulate its cost. This is one time where everyone, including real-estate investors will benefit.
Lee Sherman contributes to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.