Are you considering having a solar panel system installed on your home? One of the things you might be wondering is how it will affect your home value. After all, a solar panel installation is a big investment that can save you money on your energy bill (and help the environment too!).
Here’s the good news: Going green will have a positive affect on your home value. In a study by Homes.com, they noted an increase in value by about $14,000 regardless of the geographical area. The downside? It can be difficult to determine just how much of a positive impact it will have.
There are a few factors to consider when evaluating the worth solar panels in relation to your home’s value:
- Your current real estate market
- The maturity of solar energy in your area
- The monthly savings your system generates in your energy bills
The Current Real Estate Market
When taking the real estate market into consideration, there are a couple of things to keep in mind:
1. Your home is worth whatever someone will pay for it. So, if a potential buyer doesn’t care much for solar panels (for some crazy reason), they might not be drawn to your home or they could see it as a negative.
2. Real estate is fairly cyclical and runs in “seasons.” Let’s take a deeper look at the buyer’s markets and seller’s markets.
A buyer’s market means that there’s a lot of homes for sale and they’re all competing with each other. As a result, sale prices won’t be inflated by multiple offer situations. During this time, buyers are going to get the best deals on real estate because they’ll be able to purchase a fantastic house without having to compete in multiple offer situations. Sellers may find themselves accepting offers that are lower than they were hoping or having their home sit on the market for longer than they expected due to the competition in the field.
A seller’s market, conversely, means there isn’t that much available at the time. For example, if someone is looking to purchase a home, the pickings might be slim. Therefore, a great home may see multiple offers, driving the price higher than it might be otherwise. In these markets, sellers are the ones on the winning side since they can pretty much name their price (within reason) and then sit back and wait for buyers to clamor. Buyers may find themselves paying inflated prices due to lack of inventory and high competition from other buyers.
So, it stands to reason that the “season” of your real estate market could play a large part in just how much your home’s value is increased. During a seller’s market - when there isn’t much real estate competition - solar panels may not make that big of an impact due to the fact that, well, there aren’t many other options for buyers. During a buyer’s market, though, when there’s lots of inventory to choose from, buyers may be enticed by the prospect of purchasing a home with panels already installed and generating energy savings.
The Maturity of Solar Energy
Next up, you’ll need to consider how “mature” solar energy is in your area. While it’s typical that in any area having rooftop solar panels will increase the value, how much it increases depends a lot on the community. If every house in the area has solar panels, then yours won’t stand out as much because it’s simply meeting the standard. (That said, if every house has them and yours doesn’t, then you’ll definitely see a negative affect on your value.)
Conversely, if no one in your area has solar panels, then your home could seem like a dream come true to a savvy home buyer and therefore, may get higher offers than other similar properties without panels.
The Monthly Savings
Finally, a big factor in how much your system could increase the value of your home will depend on… well, the value it brings to the home. If you have a system that’s fairly small and not generating a ton of energy, then buyers may not weight it heavily in one direction or another. However, if you have a system that’s generating enough energy to completely negate your electric bill every month, buyers might be doing backflips at the prospect of owning your home.
Now that you know you’ll be saving money on your energy bill, helping the environment and increasing the value of your home, are you ready to go solar? Give us a call today!