Solar panels are an invaluable renewable energy source, and it's no secret they can save you hundreds of dollars on your utilities! It’s also true that their installation is pricey, and you may wonder if they're as great as you've heard. If you want to know whether it's worth the money and how it affects the value of your home, stick around, and we'll cover everything you want to know.
Solar panels can increase the value of your home by 2.7% – 5.4%. Homes with solar panels sell at a national solar premium of 4.1% more than homes without solar. Regions can differ within the same state, like Riverside, CA, which sells at 2.7%, and San Francisco, which sells at 4.4% solar premium.
The increasing demand for homes with solar panels is more evident now than ever before. It's an excellent choice for the environment, saving a substantial amount of money on utilities. Let's discuss how solar panels impact home prices across the US and the value they add.
Homes with solar panels average 4.1% higher in sales than homes without solar power. Depending on the market, it translates to a dollar value of $9,274 – $41,658. Factors like the location of your home, electricity rates, and the age of the system cause the 4.1% figure to fluctuate.
The truth is that the US populace is more concerned about their health, the environment, and national security now than ever before. Their interest in solar energy homes has become more pronounced among homeowners as a result.
One of the primary reasons why people pay more for solar homes is because it promises substantial energy cost savings. Homeowners who know they spend a lot of electricity will gladly pay the upfront expense if it saves thousands in the long run.
Solar homes also have less obvious but highly valuable features, like heated floors and swimming pools, making icy winters more bearable. These features add a quality of life kind of value that is hard to measure but is a premium feature nonetheless. The desire for an energy-efficient home is on the rise, with more than 80% of home buyers stressing the importance of having a home with energy-saving features.
Are Solar Panels Included in Home Appraisal?
The Appraisal Journal states that the value of your home will increase by $20 for every $1 reduction in your yearly utility bills. This means if the solar panels in your home can save $200 worth of electricity in a year, it would add $4,000 of value to your home.
As we saw earlier, these figures can vary between 2.7% – 5.4% according to the home’s location. In some cases, the premium can be widely different within the same state.
For instance, Riverside, CA, has a premium of 2.7%, while Los Angeles climbs to 3.6% and San Francisco to 4.4%. New York goes as high as 5.4%, which is twice as much as that of Riverside.
Do Solar Panels Add Value To Your Home?
Apart from monetary value, owning a home with solar panels can also contribute positively to the environment. You also protect yourself from power outages and make a worthwhile long-term investment.
You are Independent of the National Power Grid
Solar panels allow you to draw less energy from the national grid, meaning you don't have to rely on fossil fuels and utility companies. This can be a great asset when those around you experience a power outage or when energy prices are on the rise.
The Environment Benefits from your Solar Panels
Solar energy is clean and renewable and doesn't leave any carbon footprints. Since most of your energy will come from the sun, you'll contribute to a more sustainable future.
Solar Panels are a Lifetime Investment with Excellent Returns
Solar panels typically last longer than 25 years. Since the sun won't be going anywhere anytime soon, and day always comes after night, you're guaranteed a reliable energy source for a long time. You'll be thankful for the financial benefits, and you can spend the money on things that matter more.
If you find that you’re drawing more than you can use, you also have the option to get involved with metering and sell your excess electricity and make a tidy profit.
Do Homes With Solar Sell Faster?
Solar homes sell much quicker than regular homes because buyers view solar panels as upgrades to the house. It’s similar to a newly renovated kitchen or a beautifully furnished basement.
Home buyers know they’ll save thousands on utility bills, so they will always opt for the solar option over the non-solar option. It's a superb investment that holds value from the present to the future. The added solar premium to the house sale is another attractive feature.
There will never be any hidden costs with solar energy because no one owns the sun, and it costs nothing to collect its energy via solar panels. Furthermore, solar panels don't require a lot of maintenance. They work all the time without the need for regular check-ups.
What is the Value of Solar Houses in Arizona?
Homes with solar power sell for 4.1% more. The median home value in Arizona is $376,369. Solar panels can add about $17,313 to the value of a typical home in Arizona. Here are some facts showcasing the value of solar houses in Arizona:
SolarReviews show that the average cost of solar panels in Arizona was $6.97 per watt in 2010 and $2.64 per watt in 2023. This means that the price of solar panels has fallen by 62% over the last 10 years, meaning you’ll save a lot of energy costs!
The All-Transactions House Price Index for Arizona reports that the average solar house price index in Arizona increased from 173.34 in 2010 to 685.70 in 2023, which is a 295.5% increase.
The All-Transactions House Price Index for Phoenix-Mesa-Chandler, AZ (MSA), the average solar house price index in this metropolitan area, increased from 137.09 in 2010 to 612.83 in 2023, which is a 347% increase.
The average solar panel cost in Arizona before tax was $3.56/W as of September 2023, which was an 18.7% increase from $3.00/W in 2010. The average expenses of solar installation in Arizona range from $15,130 - $20,470, with the average gross price for solar in Arizona coming in at $17,800 as of September 2023, which was a 61.8% increase from $11,000 in 2010.
More people are demanding solar homes, with the figure rising to 63% in 2022 and 73% in 2023. More homeowners today expressed a willingness to pay a premium for a home equipped with solar panels compared to one without.
Forbes Homes states the average cost of a 5-kilowatt (kW) solar system in Arizona is between $15,000 and $25,000 as of 2023, after claiming the 30% federal tax credit. This figure is lower than the national average of $17,760 for a 5-kW system.
What is the Value of Solar Houses in California?
The value of solar homes in California varies from 2.7% – 4.6%. The average cost of a home is $708,936, adding a dollar value of between $19,141.27 – $32,611.06.
The web search results indicate that solar homes in California have increased in value and demand over the years. A 2015 study by Lawrence Berkeley National Lab found that residential solar energy systems increase home values by $3.50-$4.00 per watt, which translates to an average of $20,000 for a 5 kW system.
A study by the Appraisal Institute revealed that solar homes sell a lot faster than homes without any solar features.
California has a solar property tax exemption that excludes the added value of a solar system from the property taxes of new or existing homes. Moreover, some local utilities and municipalities offer their own incentives and net metering programs for solar customers.
SolarReviews allows you to estimate the cost and savings of installing solar panels in California based on your location, electricity usage, and system size. It also shows the average cost for an installed residential solar system in California is currently $11,235 after claiming the ITC, which is $2.68 per watt.
Forbes provides an overview of the federal and state incentives, tax credits, and rebates available for home solar in California. According to this source, the Federal Investment Tax Credit (ITC) offers a 30% tax credit off the total cost of a solar system.
What is the Value of Solar Houses in Colorado?
Colorado solar homes sell at the national average of 4.1%. The average price of a house is $509,800, meaning solar panels add a dollar value of $20,901.80.
SolarReviews reports the average cost of solar installations in Colorado is $10,521 after claiming the 30% federal solar tax credit. The federal solar tax is $2.51 per watt, $2.51 per watt before incentives, and $1.86 per watt after incentives.
Solar homes in Colorado have become more affordable and popular in the last decade. The average cost of installing a solar system in Colorado has dropped by 43% in the last five years and by 80% in the last ten years.
The state also offers various incentives, tax credits, and rebates for solar homeowners, which can reduce the upfront cost by nearly a third. There are plenty of other incentives, too, for owning a house with solar panels.
The installation process and cost of residential solar panels in Colorado are well worth the investment. It costs, on average, $15,000 - $25,000 to install solar panels in Colorado. This figure can fluctuate according to the size and type of system.
Homeowners with solar features are also exempt from property tax in Colorado.
Colorado has a net metering policy that permits owners with solar power to sell their excess solar energy to the grid at retail prices. This means homeowners can reduce their electricity bills while still making a tidy profit for simply owning a house with solar features!
What is the Value of Solar Houses in Florida?
The average solar home in Florida sells for 4.1% – 4.6%. With an average house price of $313,217, you add a dollar value of $12,841.90 – $14,407.98.
SolarReviews shows that the average cost for an installed residential solar system in Florida is currently $10,823 after claiming the 30% federal solar tax credit, which is $2.58 per watt. It decreases to $1.82 per watt after incentives.
Florida also offers a solar rebate program that incentivizes homeowners to make use of solar panels on their houses. The aim of the rebate program is to offset the installation cost and can significantly benefit those looking to invest in a solar power system.
Florida also has a property tax exemption for solar energy systems, meaning homeowners do not have to pay additional taxes on the value added by their solar panels.
What is the Value of Solar Houses in Illinois?
Solar homes in Illinois sell for 4.1% more. The average home costs $239,408, which adds a dollar value to your home of $9,815.73.
The average solar panel cost in Illinois before tax is $3.20/W as of September 20231, which is a 6.7% increase from $3.00/W in 2010.
The average installation cost of solar features in Illinois is between $13,600 to $18,400, with the average gross price for solar in Illinois coming in at $16,000 as of September 2023. It indicates a 45.5% increase from $11,000 in 2010.
The payback period for a solar system in Illinois is 5.14 years as of September 20231, which is a 35.4% decrease from 7.96 years in 2010.
The 20-year savings for a solar system in Illinois is $33,834 as of September 2031, which is a 112.8% increase from $15,895 in 2010.
Illinois has the SREC incentive, an Adjustable Block Program. It allows you to earn one solar renewable energy certificate (SREC) for each megawatt-hour (MWh) of electricity your solar system produces over a 15-year period. It can easily save homeowners over $10,000 in energy costs.
These statistics from EnergySage show that solar homes in Illinois have become more affordable, profitable, and environmentally friendly over the years.
What is the Value of Solar Houses in Massachusetts?
Massachusetts shares the national solar premium of 4.1%. The average home in Massachusetts costs $533,440 and adds $21,871.04 of value. Data from SolarReviews reveal the following statistics between 2010 and 2023:
The average solar panel cost in Massachusetts before tax is $3.56/W as of September 20231, which is an 18.7% increase from $3.00/W in 2010.
It costs, on average, $15,130, with a gross price of $17,800, to install solar in Massachusetts as of September 2023. It indicates a 61.8% increase from $11,000 in 2010.
The payback period for a solar system in Massachusetts is 8.32 years as of September 20231, which is a 4.5% increase from 7.96 years in 2010.
The 20-year savings for a solar system in Massachusetts is $55,758 as of September 20231, which is a 250.7% increase from $15,895 in 2010.
Solar Massachusetts Renewable Target (SMART) is a long-term program that offers a sustainable solar incentive. It’s offered by the Department of Energy Resources (DOER) and sponsored by the National Grid. It allows homeowners to sell their solar energy back to the national grid.
What is the Value of Solar Houses in New Jersey?
New Jersey’s solar homes have a premium of 4.1%. The average cost of a home is $421,124, which adds a dollar value of $17,266.04.
Solar panels cost, on average, $3.01/W in New Jersey before tax and as of September 2023. It's a 0.3% increase from $3.00/W in 2010.
Solar features in New Jersey will cost you about $12,792 - $17,308, averaging a gross price of $15,050 as of September 2023. This is a 36.8% increase from $11,000 in 2010.
The 20-year savings for a solar system in New Jersey is $34,307 as of September 2023, which is a 115.9% increase from $15,895 in 2010.
New Jersey has the Successor Solar Incentive (SuSI) Program. It provides solar renewable energy certificates (SREC-II) for every hourly megawatt your system produces over a 15-year period. The incentive value varies based on project type size and guarantees $90 per SREC-II for residential customers.
What is the Value of Solar Houses in New York?
New York – New York is on the high-end, with an impressive 5.4% solar premium. The average cost of a home is $363,990, adding a dollar value of $19,655.46. If you glean New York’s government website, you’ll find the following facts about solar houses between 2010 – 2023:
You'll pay, on average, $3.15/W for solar panels in New York before tax and in 2023. It's a 5% increase from $3.00/W in 2010.
New York's average solar panel installation can cost between $13,388 - $18,112. The average gross price for solar in New York comes in at $15,750 as of September 2023, revealing a 43.2% increase from $11,000 in 2010.
The payback period for a solar system in New York is 8.88 years as of September 2023, which is an 11.6% increase from 7.96 years in 2010.
The 20-year savings for a solar system in New York is $27,878 as of September 2023, which is a 75.4% increase from $15,895 in 2010.
What is the Value of Solar Houses in Texas?
Homes in Texas have a solar premium of 4.1%. The average cost of a home is $257,628, which adds a dollar value of $10,562.75. Here’s how the value increased from 2010 – 2023:
The average solar panel cost in Texas before tax is $2.72/W as of September 20231, which is a 9.2% decrease from $3.00/W in 2010.
It costs, on average, between $11,560 - $15,640 to put solar panels in your residence in Texas. That's an average gross price of $13,600 as of September 2023, which is a 23.6% increase from $11,000 in 2010.
The payback period for a solar system in Texas is 10.71 years as of September 20231, which is a 34.4% increase from 7.96 years in 2010.
The 20-year savings for a solar system in Texas is $24,829 as of September 20231, which is a 56.2% increase from $15,895 in 2010.
Texas Tax Code Section 11.27 exempts solar energy systems from property taxes, meaning homeowners do not have to pay additional taxes on the value added by their solar panels.
What is the Value of Solar Houses in Virginia?
Virginia’s solar premium is the same as the national average, 4.1%. The average cost of a house in Virginia is $335,198, adding a dollar value of $13,743,12. SolarReviews has the following statistics relating to solar houses in Virginia:
The average solar panel cost in Virginia before tax is $3.01/W as of September 2023, which is a 0.3% increase from $3.00/W in 2010.
The average solar installation in Virginia can cost anywhere from $12,792 - $17,308. The average gross price for solar in Virginia is $15,050 as of September 2023, which is a 36.8% increase from $11,000 in 2010.
The payback period for a solar system in Virginia is 10.83 years as of September 2023, which is a 36% increase from 7.96 years in 2010.
The 20-year savings for a solar system in Virginia is $23,330 as of September 2023, which is a 46.8% increase from $15,895 in 2010.
Final Thoughts
Solar panels add a significant amount of value to the present and future value of a home. You save on your finances by paying a lot less in utilities, and you even have the option to sell excess electricity for a profit.
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