Let’s face it, you want to go solar, but you need to be sure it’s worth it first.
For some people, the expensive cost of solar up-front can be more than a little off-putting.
But before you worry about breaking your budget, you should know that these panels pay for themselves.
Not only will you enjoy increased energy independence and protection from predatory rising electricity rates, but you’ll also be boosting the value of your home. So much so that you’ll be able to easily recoup your investment and then some.
Better yet, homes with solar don’t just sit on the market. They sell like hotcakes.
So if you’re still on the fence about installing solar, stay tuned to see how solar can skyrocket your home value and accelerate its sale, even if you have a solar lease or loan.
How Much Value Does Solar Add to Your Home?
When you invest in solar, you’re also investing in your home and the future.
As researchers continue to explore solar’s impact on homes, the results keep pointing to a significant payoff when it’s time to sell.
“Solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement,” explains the Office of Energy Efficiency & Renewable Energy (EERE), a subset of the US Department of Energy (DOE).
So, how does that affect your home price when it hits the market?
A Berkeley Lab study found that buyers will pay a premium for homes with PV systems—as much as $15,000(about $4/watt) for an average-sized 3.6-kilowatt array.
These results are consistent with Zillow market research, which states projects homes with solar sell for 4.1% more (~$9,274) on average in the US.
Of course, many factors contribute to this cost, like energy prices and incentives available in your area.
But in the end, it’s clear that buyers are ready for solar and excited for all the savings that come with it – more than 80% of buyers cite energy efficiency as important in their search.
Do Homes with Solar Sell Faster?
Besides selling for significantly more, do homes with solar systems sell faster than homes without solar?
The National Renewable Energy Laboratory (NREL), another arm of the DOE, sought to answer just that in a case study, following the sales of solar homes in San Diego.
Another survey set in California also showed homes with solar spend very little time on the market, sometimes selling up to twice as fast as non-solar homes.
Given the growing popularity of solar power and energy efficiency, it’s safe to assume having this amenity will at least pique the interest of all the potential buyers in your area.
So as much as you’ll miss all the savings from your solar-powered home, you certainly won’t have any trouble selling it to someone else once the time comes.
How Do Solar Loans and Leases Affect Home Sales?
Much of the research surrounding solar home sales are under the assumption that the system is owned outright, but the benefits still extend to those with solar loans and leases.
When you have a solar loan, you likely have ownership of your system and can include it in the appraisal of your home. And if your loan is paid off, selling is even easier. However, if you’re still making payments, consider using the profits from selling your home to pay it off.
With a solar lease or power purchase agreement (PPA), your solar system is actually owned by someone else or third-party owned (TPO). In this case, you can either transfer your lease to the new homeowners or go ahead and buy it out with your profits.
Don’t worry about scaring potential buyers away with a PPA—most buyers are simply thrilled that you have solar in the first place, and nearly 80% of the time, they’ll choose to transfer.
“When it comes to third-party owned (TPO) systems, data shows that while they add some complexity to the real estate transaction, the overall impacts are mostly neutral, and in some cases, TPO systems can even add value” reveals HERE.
Most potential buyers don’t have extensive solar knowledge, so working with the right realtor and explaining your energy bills and solar savings can go a long way towards swaying them.
Summing Up Solar and Home Sales
Adding a solar system to your home can significantly increase its value, allowing you to easily recoup your investment later with a speedy sale.
In this post, we examined how solar can affect the value of your home and how fast it sells, and what selling a home with solar looks like when you have a solar lease or loan.
Let’s sum up everything you need to know about how solar affect the sale of your home:
- Solar raises the value of your home by 4.1% on average, translating to thousands
- Past case studies and surveys suggest homes with solar sell significantly faster
- To sell a home with a solar loan or lease, either buy it out or transfer it over