Installing a solar energy system for your home allows you to save money on electricity while also doing your part to protect our environment. The financial benefits of residential solar systems are significant — in the long run, a one-time purchase of solar panels is much cheaper than buying electricity from your utility company. But do solar panels increase home value?
There is plenty of information out there about the cost of solar energy compared to paying your monthly utility bill, but not nearly as much about whether solar panels improve resale values. However, thanks to recent research by Zillow, we now know that a residential solar power system increases a home’s value by roughly 4.1% or $9,274 on average.
Ten States Where Solar Panels Increase Home Value the Most
That said, you might be surprised to find out how significantly this increased value can vary from state to state. Therefore, we should possibly rephrase the question to, “how much do solar panels increase home value in your state?” To answer this query, we took a deep dive into the findings of Zillow’s study, and we discovered the ten states where solar panels increase home value the most.
There are five states where solar panels add more than 4% to the resale value of a home:
- New Jersey (9.9%)
- Pennsylvania (4.9%)
- Louisiana (4.9%)
- North Carolina (4.8%)
- Washington (4.1%)
In addition, there are five other states where you can expect at least a 3.5% increase in home value due to solar energy systems:
- Florida (4%)
- Hawaii (4%)
- Maryland (3.8%)
- New York (3.6%)
- South Carolina (3.5%)
It’s also interesting to take a look at how the relationship between solar panels and home value varies between different metropolitan areas. Zillow examined home values in several metros and found that three of them stand head and shoulders above the rest:
- In New York City, solar panels increase home value by 5.4%.
- In Orlando, Florida homeowners earn a 4.6% boost in home value with a solar energy system.
- In San Francisco, homeowners can expect a 4.4% increase if they have solar panels.
Zillow isn’t the only company studying how much solar panels increase home values. According to The Appraisal Journal, researchers report that a homeowner can expect the value of their house to increase by around $20 for each dollar saved per year on energy expenses. How much do solar panels increase home value within this framework? Even if your solar power system only saves you $100 per month compared to buying electricity from the utility company, that still comes out to a value increase of $24,000.
Meanwhile, the Lawrence Berkeley National Laboratory frames the question of “do solar panels add value to your home” a bit differently, but with similar findings. The Berkeley Lab states that solar panels boost home values by about $5,000 per kilowatt of power available from the home’s solar system. This means that once you subtract the upfront installation costs, a 10-kW system would add around $32,500 to your home’s overall resale value.
Regional Electricity Costs Impact Solar Savings
Of course, the cost of electricity in your region is another major factor in this equation. Energy costs vary considerably in different parts of the country. Generally speaking, Hawaii (34 cents per kilowatt-hour), Alaska (18 cents), and Connecticut (17 cents) have the highest electric rates in the nation. In contrast, West Virginia, Wyoming, and Arkansas have the lowest rates, averaging just under eight cents per kWh. The more costly your electricity, the more you can save with solar. On average, the typical American home’s value increases by 4.1% if you install solar panels.
In addition to your region and the price of electricity in your area, there are several other important variables that affect the added value of a residential solar energy system. These include the price of installation, the replacement value of your solar system, homebuyers’ environmental priorities, how often the local utility suffers outages, how old your solar panels are, how much energy they generate, and state and local incentive programs.
You might still be wondering if solar panels increase home value for your specific situation. If so, ask yourself a few key questions:
- How much do you spend on energy from your utility company?
- What kinds of solar incentives are available in your state?
- Do you have a roof that receives direct sunlight with southern exposure?
By discussing these questions with a reputable solar installer like LGCY Power, you can determine how the relationship between solar panels and home value affects your house.
Solar Homes Sell Faster
One final advantage of residential solar energy is how solar homes sell faster than homes that rely on energy from the utility company. In general, you can expect a home with solar panels to sell roughly 20% faster than a typical home with no solar system.
How much do solar panels increase home value? To find out, look up your address in Google’s Project Sunroof. This handy tool provides personalized solar analysis for your specific address and allows you to conveniently compare financing options for your potential solar system.
Another great way to determine how much you can save is by contacting LGCY Power today! Our knowledgeable representatives can help you determine your potential savings and provide you with all the information you need to make an informed decision.