2020 will be a big year when it comes to #solar power, especially for residents in California. In just a few short months, it will be mandatory for all new homes built in the state of California to include #solar panels. With this hallmark mandate on the horizon, many #homeowners in The Golden State and across the country are wondering how solar panels will affect home property values. Will solar panels payoff for both home buyers and sellers?
Solar Home Statistics
According to research conducted this past year by #Zillow, homes that have solar panels included typically sell for 4.1% more compared to their solar-lacking counterparts. For the average median-valued home, this percentage translates to an increase of roughly $9,300. For major coastal cities, such as San Fransisco, Los Angeles, and Orlando, solar-powered homes have seen a consistent 4% rise in their value. Solar-powered homes in New York City sell for even higher with a 5.4% increase, totaling to around $24,000 in increased value.
To gather these statistics on solar premiums, Zillow compared homes that were listed and sold between March of 2018 and February of 2019. Observable attributes of the homes were also taken into consideration, including their ages, locations, as well as the number of bedrooms, bathrooms, and overall square footage.
Good News for Sellers
While many home sellers may be most concerned with interior renovations, such as kitchen or bathroom remodeling, investing in solar panels prior to selling may be a more worthy investment. As climate change becomes an ever-growing concern worldwide, it is worthwhile for sellers to consider installing solar panels as a means of ‘going green’ while increasing the value of their homes at the same time.
Home Buyers Benefit, Too
According to the Zillow Group Consumer Housing Trends Report, home buyers are becoming more concerned with #energy-efficient features. In fact, more than 80% of home buyers now consider solar panels and other energy-saving attributes to be among their top personal preferences when purchasing a home.
A home outfitted with solar panels will ultimately save home buyers on their monthly utility costs, especially during the summer months. Evelyn Huang, chief customer experience officer for Sunrun, told CNBC that monthly savings is one of the top reasons why more and more homeowners are making the switch to solar and emphasizing its importance. Sunrun is the biggest solar installation company in the U.S. and competes directly with Tesla. According to Huang, “utility companies are needing more and more money to maintain, and they pass that cost to the homeowner.” Thus, the monthly cost that homeowners pay is becoming increasingly more unpredictable. With solar, homeowners can better gauge what to expect and what they will pay each month.
According to Sunrun, the national average utility rate increases by around 3% per year. Solar customers, on the other hand, see a savings of around 10% to 40% on their utility bills, thanks to fixed prices inherent to solar panel kilowatt/hour plans.
What About Homeowners that Lease Solar Panels?
If homeowners decide to lease their solar panels through Sunrun, Tesla, or other solar production companies, they will need to consider how this decision might impact their home sale. Once the house is sold, the owner can decide to buy out the remaining lease or find buyers that are willing to take it over. There may also be financial or tax credit incentives that were available to the previous owner that may be unavailable to new owners. Depending on the lease agreement, homeowners will need to carefully consider how their solar panels might impact the selling process.
Overall, homeowners can benefit in many ways from installing and utilizing solar panels, whether they lease them or purchase them outright. As our world continues to make the shift towards clean energy production, there is no doubt that more and more states and cities will authorize home solar production mandates. Homeowners that install solar panels will undoubtedly stay ahead of this trend, increase their property value, and appeal to the majority of prospective home buyers all at the same time.