Solar Increases Home Value
Nov 08, 2011
by EmPower Solar
There are many reasons to add a solar energy system to your home. The reduction or elimination of your electric bill is certainly compelling. Of course, reducing dependence on fossil fuels and protecting the environment are extremely important as well. While each of these reasons drives thousands of people in our area to go solar each year, there is another equally important reason to go solar; it increases your home’s value.
In the past, this has been very difficult to quantify. Real estate brokers and appraisers had little information to go on, and lenders were often skeptical about any increases in market value attributed to solar energy systems.
That has changed in a big way. There are several recent studies that illustrate the value that a solar energy system can add to your home. Two in particular, performed by the Lawrence Berkeley National Laboratory and The National Bureau of Economic Research, have shown that homes with solar energy systems can command a 3 – 4% premium over homes without solar energy systems. On a $400,000 house for example, that equals $12,000 – $16,000! Not bad considering, that the average “net” cost of a 10 KW solar energy system after rebates and tax credits is around $17,000.
Now, the Appraisal Institute, the largest real estate appraisal organization in America has taken the next step. They have developed the “Residential Green and Energy Efficient Addendum” that appraisers can use to document and analyze a home’s energy efficient items, including solar energy systems. This is an extremely important development, because it allows appraisers to compile and analyze data needed to support adjustments for solar energy systems.
Soon, in areas with high utility rates (like Long Island); appraisers will be able to capitalize the documented monthly savings on utility bills into a specific value adjustment, much like the income from a rental unit.
What does all this mean to New Yorkers who have solar energy systems? It means that when you sell your home, you will get significantly more money for it than homes without solar energy systems. This is just one more reason to go solar!