September 24, 2015
solar panel with increasing stacks of money on it

Are you a homeowner? Are you intent on selling your home? If you are, have you ever asked yourself if it’s worth installing solar panels? While you might be environmentally conscious, the financial burden of installation may seem like a bit too much to stomach.

However, studies from top organizations in the United States reveal that the financial burden you might be worried about might not be as bad as you think. Installing solar panels on a home you intend to flip and sell may actually increase the perceived value of the home.

The U.S. Department of Energy issued a study saying that homes equipped with solar panels sell twice as quickly as homes that are not fitted with solar panels. The U.S. Department of Housing and Urban Development agrees, indicating that any means to add energy savings to a home will attract attention in a competitive market.


Additionally, a recent study conducted by the Lawrence Berkeley National Lab (LBL) indicated that homes with solar panels benefit from a ‘solar premium’ upon sale. The LBL’s data from 20,000 home sales shows that potential buyers are willing to pay a substantially increased price for homes equipped with solar panels.

A home’s solar premium is the value added to the home after installation of solar panels as compared to the value of homes without solar panels in your particular area. For most average homes, 3.6 kilowatt (kW) solar systems are installed on the roof. This means that the home has 3,600 watts of solar power available as 1 kW equals 1,000 watts. The LBL states that each watt of solar power will add about $3 of value to homes throughout the Southwestern United States.

Thus, if you sell your home equipped with a 3.6 kW solar power system, this should add $12,700 more to your home’s value. However, if you live in California, each watt of solar power adds around $4 of value, for a total of $16,000 of added value to a home with the same system.


The LBL report also shows that the difference between the solar premium in California and other states such as Texas is not statistically significant. The lower premiums are likely the result of lower solar install prices and lower electricity rates as opposed to a lower quality solar system in general.

All in all, the LBL’s report says that homeowners can get a big portion of their investment back if they sell their houses soon after their solar systems are installed. This savings is compounded by the fact that homeowners can save money on their electricity bills while they are in the process of selling their home.

Lower power and utility bills can also increase the value of your home. According to one report, reducing power costs by only $1 per year can equate to an additional $20 added to your home’s value. Thus, if you can cut your power costs by $1,000 each year with a solar system, your home’s value may increase by as much as $20,000.

An average cost of installing a solar system in the southwestern United States is about $3-4 per kW to install. And this is even before the 30% Federal tax incentive, which is available until the end of 2016.


Overall, installing a solar system in your home will increase your home’s value if you decide to sell your home soon. As the housing market continues to recover from the economic crash of 2008, improvements such as solar systems will help your home stand out from the rest in your neighborhood and reduce the overall cost of home ownership.

Even if you decide to wait before selling, the savings on your electric bill will pay for the cost of installation when using the 30% Federal tax incentive currently offered. In either instance, installing a solar power system is a great idea, not only to help increase your house value, but also to help the planet a little. A true win-win!



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