October 1st, 2015
Residential solar panels could make British Columbia homes more attractive and their sale more lucrative. This is according to a study from Berkely Lab. The study looked at homes across 8 states in the US.
More homes are installing solar panel systems across BC and Canada, in part due to falling photovoltaic costs and innovative financing options. As more of these homes with residential solar panels go on the market to be sold, the ability to value these homes is key to providing a strong residential PV market.
Residential Solar Panels Analysis
Real estate agents, appraisers and other property valuers have made steps to understand what kind of premium value can be placed on a home with solar panels. The study researchers conducted the most comprehensive PV home premium analysis to date. The results provide confidence that solar panel systems on a home consistently adds value across housing markets and home types.
Results and Conclusions
- Home buyers consistently have been willing to pay more for a property with PV across a variety of states, housing and PV markets, and home types.
- Premiums for homes with Residential solar panels are $1.10/watt larger in California than outside of California, but this difference is not statistically significant, and it seems to reflect the net cost of PV systems in each area (Figure 1). Moreover, the findings should provide greater confidence that PV adds substantial value to non-California homes.
- Net cost estimates—which account for federal, state, and utility incentives—seem to be the best proxy for market premiums. Income estimates using the PV Value® algorithm are consistently lower than market premiums, possibly due in part to the sensitivity of this method to electricity-rate assumptions.
- PV premiums remained fairly consistent even as PV gross costs decreased dramatically over the study period, suggesting that net cost, rather than gross cost, is the dominant market signal.
- In contrast to previous studies, this study found only a small and non-statistically significant difference between PV premiums for new and existing homes, likely because this study includes many more sales and recent sales while excluding very-high-priced homes.
- A “green cachet” might exist for PV homes; that is, 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 market appears to depreciate PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses. The study data do not allow analysis of depreciation into the second decade of PV systems’ operation—this is an area for future research.
- This study focuses only on homes with host-owned PV systems, not those with leased PV systems. Future analysis should focus on leased systems, as they are a growing portion of the PV home market.
Click here to view the Study Factsheet as a PDF
Contact Mark to find out how you can install residential solar panels at your home and increase your home’s value.