Does installing solar increase property value?
Yes! Installing solar will increase your home’s value in two ways—by reducing your annual operating costs and by increasing your home equity. According to a leading mortgage provider, saving electricity adds significant value to most homes.* They point to a study showing that for every $1,000 saved in annual energy costs, $20,000 is added to the value of the home.**
To illustrate, if you spent $23,000 on a Sungevity solar system today, a system this size might save $1,200 in energy expenses in year one. According to the study, your solar system will immediately add over $24,000 to the resale value of the home. That increased resale value is worth more than the cost of the solar system.
Millions of homeowners worldwide have gone solar with the knowledge that if they sell their solar home, they will cash in on the increased value of their property.
Property tax benefits of purchasing solar
Many states allow you to exclude the cost of a solar electric system from your property taxes as long as you don’t sell your home. In other words, while the value of your house will go up with the installation of a solar electric system, this addition can be excluded from your property's assessed value. This makes solar home improvement one of the best home renovation projects from a financial benefits perspective. Please visit this site for the most updated information regarding tax benefits in your state.
Solar homes sell faster
Solar homes have great resale value. The housing market overall remains slow, but according to the LA Times, buyers are seeking affordable, solar powered homes. Homes that have installed a residential solar system are beginning to outsell homes with traditional electrical systems because of the increased value, environmental benefits, and tremendous savings potential.
Solar tax credits and rebates
In California, a combination of solar incentives can cover up to 40% of the cost of your residential solar system. In 2009, the federal solar tax credit will cover 30% of the total cost of your solar system and the California Solar Initiative (CSI rebate) saves you an additional 10%. To read more, see solar rebates and solar tax credits.
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*This 20 to 1 ratio was estimated by Appraisal Journal in 1998 and is cited by Wells Fargo Bank. It is justified by the fact that a homeowner with $1,000 less annual operating costs will rationally be able to pay $1,000 more in mortgage expense, making the home $20,000 more affordable.
**Solar compares favorably to other home improvement investments, such as deck additions, kitchen and bathroom renovations, and window replacements, which typically create resale value worth about 75%-100% of the cost, according to the experts at Remodeling Online (www.remodeling.hw.net).