(NOTE: This post relates to purchased solar energy systems, which increase home re-sale value and decrease re-sale time. Leased systems are notorious for hampering home sales, as I discuss in this earlier post.)
Not surprisingly, as more homeowners install solar, more homes with solar are being bought and sold. Data backs up the common sense assumption that solar energy systems are in demand among home-shoppers. After all, who wouldn’t want to buy a house with low to no electric bills?
As real estate agents, here’s what you need to know to represent buyers and sellers of solar-powered homes. Links to additional resources are included.
Solar Homes Sell for More
Buyers will pay a premium for homes with solar electricity systems.
That was the conclusion of an extensive study of nearly 23,000 homes sales, conducted by the U.S. Department of Energy’s (DOE) highly regarded Lawrence Berkeley National Lab. Specifically, the report said:
- Home buyers consistently pay premiums for properties with solar. This is true across various states, housing markets, and home types.
- Average premiums equate to $3.50 to $4.00 per watt. That comes out to at least $20,000 for smaller systems. For today’s more typical system of 10,000 watts, the solar premium is $35,000.
- The study covered home sales from 2002-2012. The solar premium survived the dramatic decrease in installed costs over the study period, and the market tumult which was the housing bubble, subsequent crash, and recovery.
- The sample included new and older homes, none more expensive than $900,000, in Massachusetts, Connecticut, New York, Maryland, Pennsylvania, North Carolina, Florida and California.
Solar Homes Sell Faster
More good news for realtors: “The nation’s largest professional association of real estate appraisers today announced that solar photovoltaic systems…almost always decrease marketing time of single-family homes,” stated the Appraisal Institute (AI) in a press release about a study done in Colorado. The study is from 2013; I expect this trend has only strengthened in recent years as solar awareness has skyrocketed.
(The AI study also backs up the DOE study showing solar increases re-sale prices.)
Prove the Value
If you’re the seller’s agent, help them get full value for their solar. Suggest that they gather paperwork showing their solar benefits and display it at open houses:
- Copies of electric bills showing very little due or even a credit
- Documents showing the amounts of recent “green income” payments if they get them – cancelled checks or a statement from their “aggregator”.
- A note saying solar is exempt from property taxes, if that’s the case. (It is in all of Massachusetts and Rhode Island. New Hampshire varies by town.)
A True Story
Former New England Clean Energy customer Brian of Marlborough, Mass., confirms: “My home was definitely worth more because of solar.”
Brian compared his sale price per square foot to a neighbor’s very similar but slightly bigger home, which sold a year earlier in a better market. Brian’s house sold for $13 more per sq. ft. That comes out to at least $28,600 in extra value, which he attributes to his solar energy system. That’s $4.16 per watt of solar. Even if he subtracts the price of a new energy-efficient furnace, the solar premium comes out to $3.64 per watt of solar, in line with the study’s conclusion.
Here’s another case study of a homeowner’s experience selling his house with solar.
Thanks to David Lenoir of Coldwell Banker for his input into this post.
If you liked this article, you might also enjoy:
- Case Study: Impressive Calculations
- Case Study: Selling Your Home With Solar
- Happy House-Hunting?
- Is a Solar Lease an Asset or Liability When Selling Your Home?