In addition to California, the new study investigates home pricing trends Connecticut, Florida, Massachusetts, Maryland, North Carolina, New York and Pennsylvania by analyzing the sales of over 20,000 homes in these states. LBL's analysis of the housing markets in these other states shows that the premium paid for homes with solar is not a phenomenon isolated to the Golden State.
The takeaway is this: If you are thinking about purchasing a solar system for your home, the study's conclusions should give you a boost of confidence that you are making a smart investment. LBL finds that homes with solar panels will benefit from a 'solar premium' when they are sold because buyers are willing to pay more for a home with solar panels.
The solar premium is how much more your home will be worth with a solar panel system as opposed to without one. Here's an example: if your home has a 3.6 kilowatt (kW) solar system (the national average) on its roof, this means you have 3,600 watts of solar power (1kW = 1,000W). LBL says that each watt of solar you have will add approximately 4 to your home's value if you live in California and about 3 if you live elsewhere. THIS MEANS THAT, THANKS TO YOUR 3.6KW SOLAR SYSTEM, YOUR HOME SHOULD SELL FOR ABOUT (4 X 3,600W =) 16,000 MORE IF YOU LIVE IN CALIFORNIA OR ABOUT (3 X 3,600W =) 12,700 MORE IF YOU LIVE OUTSIDE OF CALIFORNIA.
What is surprising about these figures is that they are very close to what you would pay for a brand new solar system today. Our own analysis of prices for 6kW solar systems in California reveals that some of the more expensive systems cost just over 4/W. And bear in mind that these prices are what you would pay before you take into account the generous 30% Federal tax incentive that is available until the end of 2016.
The report notes that the difference between the solar premium in California as opposed to the non-Californian states is "not statistically significant": The lower premiums may be due to "lower net costs and income estimates" in the other states. In essence, the premiums in non-Californian states may have to do with lower solar installation prices and electricity rates rather than because solar has a lower valuation there.
ALL OF THIS SUGGESTS THAT IF YOU SELL YOUR HOUSE SOON AFTER YOU HAVE SOLAR SYSTEM INSTALLED, YOU WILL RECOUP MOST OR ALL OF YOUR INVESTMENT, EVEN AS YOU SAVE MONEY ON YOUR POWER BILLS. It also confirms what we've said before: Payback periods on solar power systems are not something to be overly concerned about. Your solar system will either increase your home value significantly should you decide to sell your house, or it will pay itself off in power bill savings before you move out. In both cases, solar is a sound investment.
OTHER INTERESTING POINTS FROM THE REPORT INCLUDE:
* The solar premium for newly-built homes was slightly lower than for older homes, indicating that retrofit solar installations are valued the same as systems which are built into the home.
* The /W solar premium was smaller in homes with larger systems, indicating that there may be a 'green cache' effect. As the report says, "Buyers might be willing to pay a certain amount for having any size of PV system on their homes and then some increment more depending on the size of the system".
* The authors recommend that homes that went solar through solar leases or PPA programs should be an area of future research; the current study examines only homes with owner-owned systems.
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