Solar Panels as a Home Improvement Strategy


| 3/11/2016 9:38:00 AM


Tags: solar power, home energy, home economics, solar panels, home improvement, Vikram Aggarwal, Massachusetts,

Home Renovations and Solar Panels

Whether you’re considering selling your home in one year or ten, knowing how a home improvement project will impact your home’s resale value can make or break the decision. The conventional wisdom from HGTV and home improvement magazines is that updating your kitchen, renovating your bathroom, and building an addition are among the smartest ways to increase the resale value of your home. But there’s another home improvement that you may not realize can add serious value to your property: installing a solar energy system.

 Multiple studies by Lawrence Berkeley National Laboratory (LBNL), a research laboratory affiliated with the U.S. Department of Energy, have shown that solar can improve the value of your home. The lab’s 2015 Selling Into the Sun report analyzed sales of solar photovoltaic (PV) homes in eight different states over 11 years with the goal of determining just how much value solar adds to your home’s sale price. The key finding: on average, homebuyers are “consistently willing to pay PV home premiums” of approximately $4 per watt of installed solar capacity.  For a standard 6-kilowatt (kW) solar PV system, this means that solar can add $24,000 to your home’s resale value. 

While a $24,000 increase in property value is compelling, knowing how much a solar panel system costs, and how that cost compares to other home renovations, illustrates why going solar is truly the best investment you can make in your home.  

The Value of Solar-Panel Installations vs. Other Home Renovations

According to EnergySage data, the average cost of a solar panel installation in 2015 was $3.70/watt, which means an average 6-kilowatt (kW) system has a $22,200 price tag. Tax breaks and other incentives drastically reduce that cost – once you subtract the value of the 30 percent solar tax credit, your total solar installation costs are a little less than $15,600.

When you sell your solar home, you will be able to recover your installation costs and more, but how does this compare to more traditional home improvement projects? To determine the answer, EnergySage used the Remodeling 2016 Cost vs. Value Report, which evaluates project costs and resale value for a variety of home renovations. What we found is that you are not likely to recover your costs for the majority of home improvement projects (see chart).




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