The nation heard the facts clearly from President Obama’s 2014 State of the Union Address: Every four minutes, another American home or business goes solar. And for good reason. Every corner of the continental US receives more abundant sunshine than the world’s solar leader, Germany. As prices continue to drop, that means more and more Americans are now becoming more interested in harnessing the power of the sun to provide electricity for their homes. The statistics are impressive, not only does another American home or business go solar every four minutes, but:
- Two million homes in America already have solar panels.
- Six of the ten largest new home builders now include solar in new construction.
From an environmental perspective, there is no question that this move away from dirty energy is good for the planet, and critical for tackling climate change. What does this mean for the pocketbook of homeowners? And how does solar effect home values and how long they sit on the market?
Solar Homes Sell For More
A 2011 study from the US Department of Energy’s (DOE) Lawrence Berkeley National Laboratory (LBNL) looked at home sales prices for almost 2,000 solar homes in California, as compared to a set of 70 thousand non-solar homes. Solar homes were the clear winners, with an average sales premium of $17,000 for an average-sized system (of 3 KW).
A follow-up study released in December 2013 found even more good news for solar aficionados. It turns out that price premiums for solar are substantially larger than would be estimated by an appraiser based on either the income approach (based on the value of the energy the panels produce in their lifetime) or the replacement cost approach (based on how much it would cost to replace the panels). The authors conclude that there may be a “green cache” worth real money and that some buyers are willing to pay for homes with solar simply because they appreciate avoiding the transaction costs associated with choosing and installing solar panels themselves.
Solar Homes Sell Faster
The question of ‘days on market’ is somewhat less studied, but the studies that exist show the solar homes sell faster than the equivalent non-solar home. A 2006 study from DOE’s National Renewable Energy Laboratory looked at sales in a development of new homes with solar. The 257 homes that had solar built by Shea Homes sold within a year, which was two years faster than expected. A group of Clarum Homes houses with solar sold in 23 months, as compared to 28 months for non-solar homes.
“The Next Granite Countertop”
The US solar industry is growing at an unprecedented rate, and residential solar panels appear to be a welcome addition for homes on the market. The new home market is particularly interesting. A recent headline from Bloomberg called solar panels “the next granite countertop for homebuilders.” Those new homes will be on the resale market before you know it.
Want to learn more? Check out this article that busts seven common myths about rooftop solar.