Real Estate Market Sees Solar in a New Light

posted by Dave Llorens on February 25th, 2011

sold

Once considered an eyesore by the real estate market, solar panels are now becoming a hot commodity. An influential study by NREL (National Renewable Energy Lab) caught everyone’s’ attention last year when it found that homes with solar panels sold 20 percent faster than non-solar homes and fetched a 17 percent higher asking price. Update, April 2011: New research by the U.S. Department of Energy’s (DOE) Lawrence Berkeley National Laboratory also finds strong evidence that homes with solar photovoltaic (PV) systems sell for a premium over homes without solar systems. Click here to read more about the Lawrence Berkeley study, or click “Read the rest of this entry” below for more about the overall trend.

One very simple reason for the trend is that more U.S. homeowners have solar panels now, so the effect is just easier to observe. Until recently, the percentage of solar homes was just too small to tell what impact, if any, solar panels had on home buying patterns. Now,  in states like California and New Jersey (where solar incentives are strong) there are enough concentrations of residential solar installations to see a distinct pattern emerging.

Of course, if the U.S. ever adopts a national feed-in tariff like the one responsible for mass solar adoption in Germany, solar panels will be as common as water heaters and probably no longer much of a tipping point in home buying. Right now, however, with soft home sales and the market flooded with an oversupply of inventory, solar panels give a house rock star status. And it isn’t just the feel-good, environmental side of solar that creates this effect. In a down economy, a home with no monthly utility bill attached has major appeal.

But do realtors know how to really sell a solar home yet? They’re learning quickly, says Ecobroker International, a national network of green-minded real estate agents. The Colorado-based organization provides online certification courses on green home improvements to real estate professionals and so far, they’ve certified over 1,700 agents. Local and state level programs, too, are springing up in states as diverse as North Carolina, Oregon, and Arizona.

In fact, green home improvements are such a selling point for homes now, they may start to take on school district-like levels of prominence in realtors’ conversations with clients. The average U.S. homeowner spends about $1200 on grid power per year (about $100 a month), so when a real estate agent mentions a home has an electrical bill of $2.20 per month, that becomes a selling point on par with outdoor fireplaces, hot tubs, and low taxes.

Or better yet, how making money from solar? In states with SREC programs like New Jersey, Pennsylvania, and Massachusetts, solar panels actually generate income for homes, and prospective buyers inherit that income when they buy. The average New Jersey solar household makes between $5,000 and $7,000 a year just for having panels on the roof.

Looks like homes are not only becoming the next big green purchase for consumers (joining the ranks of other big ticket green purchases like electric cars and energy efficient appliances), but in particularly strong solar markets they may have long-term investment appeal as well.

Further Information: Video: “How Solar Panels Add Value to Your Home

By Dave Llorens

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10 Responses to “Real Estate Market Sees Solar in a New Light”

  1. Chris Sully says:

    I always wondered about this. Just makes sense that solar panels would add value to a home, but a 17% higher sales price! Nice! Keep up the great work 1BOG

  2. Peter Lanteigne says:

    I checked in with another company. It would have taken twenty years to pay off the cost.

  3. Douglas Hopkins says:

    Peter: Be sure to check your state rebates; in NJ the payoff is approximately 6 years, an excellent investment. Just be sure not to use Home Depot or BP as your installers, they have made an enormous mess of our installation, including prosecution by our municipality for permit failures.

  4. Brian Foster says:

    I hope and pray that 1bog makes it to North Carolina where I live. North Carolina gets most of it’s power from dirty polluting coal power, mountain top removal mining and solar power is badly needed so we can shut down these dirty coal fired power stations.

  5. Charles Adams says:

    My company is just starting off in rental real estate and I plan to install solar on all of my properties as I go. My entire purpose is to increase the independence of the average person from the central grid system and save money in the process. I do intend to do this on a national level as well.

  6. Andre LaFond says:

    Solar is the future, but how soon depends on affordability in my eyes.

    visit me at marealestate.moonfruit.com (a resource for home buyers & sellers in MA)

  7. Diane Boover says:

    For my $4000 investment (after rebates) in solar panels, I am making, on average, around $50 per month. There is no investment anywhere that pays that kind of dividend. I don’t think of it as when it pays for itself, I think of it as money well invested forever! We spend money on really dumb things, like cars and don’t even think of it.

  8. Ed Ramirez says:

    I can see the future.

  9. Christopher Doyle says:

    Santa Fe has sunshine 300+ days a year

  10. Michael Woods says:

    The price of solar is coming down every year. I personally would not pay for new panels, even though I would very much buy a home with existing panels.

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