How Solar Power Can Increase the Resale Value of Your Home

 Guest Post by Matt Meiresonne from Engios*

Ever think about how volatile the real estate market is? Or how REAL climate change has gotten in the last few decades?

Data source: NASA.gov

(Yes, that’s over 400,000 years of data compiled by NASA).

It’s pretty scary to think that your home could decrease in value overnight, or your grandchildren could never experience snow because of climate change. Fortunately, there is something you can do to gain control of both problems. And in today’s post, you’ll learn why solar panels are the answer.

Solar energy savings

Many homeowners are now turning to solar technology to make their homes more sustainable. A study from Energy Savings Trust suggests that a 4kW array of solar panels can save you an average of almost $1000/year. According to a study by Forbes, homeowners who install photovoltaic solar panels can recover nearly all the investment costs if they move. Mark Karnes suggests that building owners can get a 30% investment tax credit awarded to them if they invest in solar.

Bottom line?

• You produce your own energy, and you don’t have to pay utility companies.
• Even if you move, you’ll recoup your costs.
• You get taxed less.
• You save the planet in the process.

A national US Department of Energy study discovered the resale value of houses increased by $4 for every solar watt that was installed. To put that in perspective; if you installed a 5kW solar system in your home, you could increase the resale value by as much as $20,000.00.

Why solar power increases your home’s value

 Motivation always boils down one or more of the three types of incentives:

• Moral (It makes you feel good about yourself).
• Social (It makes you look good in the eyes of your peers).
• Economic (It saves you money).

• Social and Moral Incentives

For some home buyers, investing in sustainability is priceless. These people are deeply concerned about the impact their lives will have on the eco-system, and they want to do everything they can to mitigate that damage. When your neighbors see that you’re doing something about it, it increases social credibility. You can bet that social and moral behavior factor into the buying process (and your ability to increase asking price).

• Economic Incentives

This typically comes down to energy savings, energy independence, and tax reductions. Use the Solar Calculator to see how much money solar can save you. A homebuyer might be willing to pay a little bit more up front knowing that, in the long run, they will have much lower energy costs than their neighbors. When it’s the utility companies own the energy – they make 8-10% profit from selling energy to you. Sometimes more per the Motley Fool:

But when you own that energy, you put that 8-10% back in your pocket. When you’re energy independent, you save energy because it’s more efficient.

“Energy lost in transmission and distribution: About 6% – 2% in transmission and 4% in distribution – or 69 trillion Btu’s in the U.S. in 2013,” Inside Energy.

 “Only two-thirds of the energy in the raw materials actually make it onto the grid in the form of electricity,” Inside Energy.

The government gives you tax incentives for going solar. Check out www.dsireusa.org to find government incentives by state.

Some studies identify a trend, where houses with solar energy sell twice as fast as those without it as stated by Energy Sage.

The Future of Solar Technology

Conventional solar panels have become lighter and much cheaper to manufacture as the technology has been popularized. Motion control automation (MCA) technology, such as linear actuators, advances in conveyor belting and palletizing equipment have had a massive impact on productivity. This means lower hardware cost and an increased rate of innovation.

Which also leads to lower installation cost:

Source: Scientific American

Here’s some exciting stuff happening now:

Tesla, announced in November they would be releasing an integrated solar roofing product. The product, slated to be available later this month, hides the solar cells in tiles that mimic the look of a normal roof.

Tesla claims that one of their roofs will generate roughly the amount of energy traditional solar cells could be expected to produce. While this technology won’t necessarily make other solar cells obsolete, it may appeal to homeowners and buyers who are looking for more affordable yet more aesthetically appealing solar energy solutions.

You can check out the official unveiling here:

What does it cost?

Homeowners may not be against solar power by principle, but many may doubt the financial advice renewable energy advocates give them.

Well, let’s roll out a few key facts to consider:

• While we don’t yet know what the official price of Tesla’s solar roofing will be, experts estimate it will cost between $33,000 and $37,000 to retrofit the average home.

• If you are thinking of equipping your home with traditional solar panels, you can expect to spend anywhere between $15,000 and $40,000 dollars. Most residential systems provide between 3 and 8 kW of power, and the cost of power per watt decreases with each additional panel.

• The labor that is required to install a solar system in your home makes up about 15% of the overall cost.

• Some maintenance is required if you install solar panels, but it is minimal. You may need to check the panels from time to time to make sure no dirt or debris is obstructing the sun’s rays. Some solar panel installation companies even offer panel cleaning services for panels that may be in a difficult place to reach.

The Easiest Way to Get Started

One convenient thing about solar panels is that you can gradually scale up by making incremental changes. And that’s what I recommend if you’re on a budget. (Keep in mind you can also draw power from the local power grid while simultaneously using your own solar panels).

There are plenty of factors a solar expert will have to examine to determine how many panels you need to reach your goal of 100% sustainability.

• the square footage of your home
• the average amount of electricity you use every month
• the location of the house and how much sunlight it receives

There’s plenty of solar panel expert contractors to reach out to, many of which will give you a free quote. I’d advise getting an expert opinion before you do too much yourself.

A quick case study

Cathy and Randy Ribaudo decided to go solar in 2016. They qualified for a 20-year solar loan from a local solar provider, so they had several panels installed on the roof of their house. They currently pay $235 a month against the solar loan. However, they pay only $7 per month to the utility company to be connected to the local power grid. Before going solar, they were spending an average of $225 per month on their electricity bill.

This way, they’re generating electricity without a hefty monthly bill, and they are working towards paying off their solar loan.

With so many benefits, the question isn’t “Why should I do it?”, it’s, “Why haven’t I done it already?”  Help the earth and your wallet with an investment in solar technology for your home.

What do you think about solar and increased home value? Let me know your thoughts and leave a comment below!

*Matt Meiresonne is the green-engineering-obsessed founder of Engios, a blog focused on improving environmental quality through science, technology, and engineering practice. He provides insanely practical advice (that’s also simple and digestible) to get people like you to reduce their footprint. For more information, you can check out his about page.