Does Solar Increase Home Value?
There are many ways to boost the value of your home. In a market like Colorado, installing solar panels is one of the best things you can do to increase what a prospective buyer is willing to pay.
Realtors will tell you that there is a difference between adding value to your home and adding expense. Costly upgrades such as a swimming pool or extensive landscaping may give your home a “wow” factor, but the impact when you list the house is likely to be negligible.
Why do these nice features that homeowners sink so much money into have such a poor return on investment? Because subsequent owners will have to pay for the upkeep of these additions even as they enjoy the benefits.
Solar panels are very different. After the initial investment, a home energy system saves you money. When new owners buy the house, they will also benefit from the savings.
There are many reasons to invest in solar power for your home. Contact REenergizeCO in Denver or Fort Collins to discuss the benefits of going solar in Colorado.
How Do Solar Panels Increase Home Value?
The energy savings provided by solar panels translate into better value for your home. The National Renewable Energy Laboratory (NREL) found that every dollar saved on energy through solar increases home value by $20.
That’s a return on investment of 20 to 1. When you sell your house, these better savings equal bigger profits.
According to Zillow, homes with solar panels sell for approximately 4 percent higher on average than homes without solar energy. That means an added value of about $9,200.
Key reasons why homeowners benefit from solar when trying to sell the house include:
CNBC reports that 80 percent of buyers look for solar panels and other energy efficiency upgrades when they hunt for houses. In addition to a greater emphasis on green living, these improvements address two major financial priorities for home buyers:
- The need to save money on energy
- The need to control and manage energy costs
The majority of new home buyers are both budget-conscious and care about the environment. However, even the most environmentally disinterested buyer will be attracted by the energy savings and ability to control what they pay for power that solar panels provide.
Of course, the precise value solar panels add to your home sale price depends on the local market. This can vary by city, with solar home values in some areas exceeding the average for the state as a whole.
Tapping Local Trends
Fortunately, solar is in demand in the Denver metro area. In its nationwide survey of cities adopting solar power, Environment Colorado Research & Policy Center found that Denver ranks ninth in the country for installed solar panel systems.
Given the extremely competitive housing market in Denver and other parts of Colorado, it pays to stand out with energy-efficient upgrades. Some buyers in the Front Range simply won’t consider a home that doesn’t already have solar panels. Therefore, installing a solar energy system helps you maintain a competitive edge.
Read More: Is Colorado Good for Solar?
Saving Time and Money
Another reason to invest in solar before you put it on the market: Houses with solar panels tend to sell faster than those without solar panels. Research by NREL has found that homes with solar panels sell 20 percent faster than equivalent houses that are dependent on the grid.
The less time your home is on the market, the more money you can save on storage, transportation costs, and having to pay two mortgages at the same time. You also reduce the likelihood that you will have to delist your house or settle for below the asking price.
Contributory Value of Solar Panels
A solar panel system also has the benefit of augmenting the energy savings of any other efficiency upgrades you have made. This means:
- What you pay for heating and cooling goes further when upgraded home insulation keeps hot and cold air inside the house where it belongs
- The efficiency of LED lighting is enhanced when solar panels catch the rays to light your home
- ENERGY STAR-certified appliances are even more efficient when they are powered by renewable solar
The cumulative benefits of solar panels combined with other solutions cannot be overstated. Not only will these and other upgrades cut your monthly energy bill, but they will be an undeniable draw when you decide to put your house on the market.
How to Get More Home Value from Solar
Although solar panels start saving you money right away, additional investments can help you maximize the value of your home energy system. Installing a solar battery, for example, can help you further reduce your dependence on the power grid (sometimes entirely). When you sell your home, a solar panel system with a storage battery will provide additional value to a buyer who prioritizes energy savings and independence.
Read More: Managing Home Energy with a Solar Battery
Electric vehicles are another growing trend among those looking to save money and reduce their carbon footprint. Homeowners are getting the most from their solar panels and electric vehicles with smart EV charging stations that take energy generated from solar to power their cars. For new home buyers with electric vehicles, a smart charging station that runs on solar is a major selling point.
Pro Tip for Selling and Listing Your Home
If you invest in solar, the value of your home should increase. Although solar panels are an asset for the vast majority of homeowners when they list the house, a few caveats apply.
First, the solar panels need to be owned, not leased. Buyers are enthusiastic about solar, but they don’t want to be locked in to the previous homeowner’s contract.
Second, you need to hire a qualified listing agent to handle the sale. Qualified agents will have taken the National Association of Realtors course Selling the Sun: Establishing Value for Solar Homes. This and other programs enable real estate agents to accurately determine the value of a home with a solar energy system and market it effectively to prospective buyers.
Your agent or realtor can work with the buyer to ensure they hire an appraiser who knows solar as well. Tools such as PV Value® are used by agents and appraisers alike to calculate the line item addition to the home’s value that solar panels and other upgrades provide.
Without specialized knowledge, tools, and training, the sale of your home will be in the hands of inexperienced agents and standard bank appraisers who don’t understand the full value that solar adds to a house. You may be forced to sell your home for less than market value if you don’t have the right partners.
Learn How Solar Panels Can Increase Your Home Value
REenergizeCO is passionate about helping homeowners save money on energy, take control of their power usage, and reduce their environmental impact. We have completed hundreds of solar installations in Denver, Fort Collins, and throughout the Front Range, and we can also help you maximize the value of energy-efficient upgrades to your home.
The process begins with a comprehensive home energy audit. Our team will perform specialized tests to determine where you lose energy (and, therefore, money) and make individualized recommendations for installing solar and other options for improving efficiency.
REenergizeCO is recognized as an approved solar contractor by Xcel Energy and multiple county and municipal utilities. We respect your home, and our team can help you make smart energy improvements whether you intend to sell the house or live in it for years or decades to come.
Contact a solar team member at REenergizeCO today for more information on solar panel installation for your home. You can also reach us by phone in Denver at (303) 227-1000 or in Fort Collins at (970) 323-3191.