Homeowners often undertake home improvements to increase their property value and/or improve the quality of life. While some home improvements can greatly increase the value of your home, others do very little to impact it. For example, remodeling a kitchen is thought of as a home improvement with a very good return on investment. On the other hand, a swimming pool is a fun addition, but the value it brings to the property is greatly variable. The addition of a swimming pool may do little for a home's resale value because of the additional costs and hassles associated with pool maintenance, including heating and filtering.
Installing solar is one of the best ways to increase your home value. Unlike many other home improvements, the addition of solar panels can help a house sell faster. Solar panels actually save the homeowner money by reducing electricity costs, and research shows that homeowners consider energy costs an important factor in their decision to buy a new home.
Homes with lower electricity bills also sell faster, spending less time on the market. According to the U.S. Department of Energy's Office of Energy Efficiency & Renewable Energy, a solar home will sell twice as fast as a home without solar panels. The website for the U.S. Department of Housing and Urban Development states that energy saving improvements increase the potential resale value of your house and help sell it more quickly because they "make your house more affordable to more people." In addition, solar panels "attract attention in a competitive market" and are "improvements which will actually save money."
The electricity savings from a solar home translate directly into an increased home resale value. The U.S. Department of Housing and Urban Development states that home values rise an average of $20 for every $1 reduction in annual electricity bills. This means saving $1,000 per year in electricity costs can increase your home value by $20,000.
The value of the home solar system itself increases over time, as well. As electricity prices continue to rise, your energy savings will also increase, making your home solar system more valuable. "One thing's for sure," states the USA Energy Guide, "when it comes time to move, solar panels will add to a home's resale value, no matter where you live."
Why do solar panels make a home more valuable?
Lower Electricity Bills
As utilities continue to raise their rates, home solar panels can help you get your electric bills under control. Nationally, utilities have increased electricity rates an average of about 6% per year for the last 30 years. These rates will only continue to increase. By going solar, homeowners can lock in lower rates for their solar electricity, and purchase less of traditional electricity from the utility. While the cost of utility electricity increases with time, the cost of home solar power remains low and constant - a "locked-in energy price over the life of the solar equipment, because the 'fuel' - sunshine - is free.”
And the more electricity you use overall, the more you end up saving with home solar. According to the American Society of Civil Engineers, the national demand for electricity has grown 25% since 1990. Home solar panels are a good way to meet the growing demand with the consumption of clean power, rather than fossil fuels.
Lo Loc ation and Timing Advantages
The value of solar electricity is also tied to the timing and location of solar production. A working paper by Severin Borenstein, the Director of the University of California Energy Institute, argues that the timing of solar production can potentially increase the value of solar by 30 to 50%. Demand for energy peaks in the middle of the day, increasing the cost of electricity pulled from the grid. However, home solar power production also peaks in the middle of the day.