Home value can increase by up to $6000/kW installed and give your home a 4% overall gain in value. Homeowners selling their house will generally be able to get back what they paid for the system, making it an excellent investment.
What Makes Solar Panels Attractive to Homebuyers?
Why are potential homebuyers willing to pay so much extra for solar panels? It's probably the same reason many homeowners install panels in the first place; financial and environmental benefits.
Lower monthly electricity costs for the remaining lifespan of the panels will usually more than offset the additional cost to buy a home with panels already installed. Newer panels are especially valuable because many of them will outperform their 25-year warranty, with degradation flattened after the first five years. These panels can continue to produce energy for up to 30-40 years without being replaced. That's a lot of savings over the years!
Demand for solar panels also means houses with installed systems can sell much faster. A study done by the National Renewable Energy Laboratory shows that a home with solar panels can sell 20% faster, for up to 17% more than an equivalent non-solar home
What Affects Solar Panel System Value?
The value of a system can vary depending on a lot of factors. It’s necessary to examine your current system and location to get a better idea of how much of an increase in value your panels can give your home.
Electricity costs vary between provinces which is a significant factor in determining a solar system's value. Higher costs mean more potential savings and higher valuation.
Obviously, higher output and energy generated means you can power more of your home with solar energy. The more energy you can generate and use yourself, the less you'll have to take back from the grid.
Older systems can degrade over time and become less efficient. Beyond that, they might require repair and replacement sooner, depending on how late they are into their lifespan.
Solar Installation Cost
The cost of installing panels can be high depending on where you live. Having a pre-installed system means not having to pay for installation services which can save homebuyers money if they were already looking to have a system installed.
What About Financed/Leased Systems
If you're currently financing or leasing a system, there are some additional steps you need to take before selling your house.
Appraisals can be lower with leased and financed systems since they are considered third-party-owned, which means the company you're leasing/financing from would have to be involved in the property transfer.
With Polaron's 0% financing program, we make it easy to transfer your contract over to new homeowners. Just contact our team in advance so we can prepare the proper paperwork for you. We highly suggest that homeowners with leased/financed panels disclose this to potential homebuyers first so the transfer process can go smoothly.
Homeowners can also buy out the system at any time and group the price.
How do Appraisals Work?
There are 3 main ways solar panels are valued.
The income approach: values your solar PV system based on the projected income it will provide for the new homeowners over the remainder of its' lifespan.
The cost approach: looks at how much it would cost to reproduce the solar PV system, taking the overall size, price and quality of components into consideration.
The comparable sales approach: compares the value of homes with and without a solar PV system to understand solar's overall impact on how much a house will sell for. This method looks specifically at homes with similar specifications located in the same area.
Increase the Value of Your Home With Solar Panels
Increasing your home's value is just one of the many benefits of going solar. However, if you're interested in solar but aren't sure if you'll be staying in the same house for its' entire lifespan, there's no need to worry.