If you’re considering adding solar panels to your roof, now is the time. Over the last decade, the cost of installing solar panels has decreased by 90%, and there are more incentives than ever to install them. What used to be a status symbol is now arguably a financial imperative for homeowners!
So, do solar panels increase home value, and if so, how much? Let’s talk about that—Simple Solar has you covered!
Do Solar Panels Increase Home Value?
To put it simply, yes, solar panels absolutely increase home value.
Solar array expansions can save homeowners up to 100% on their electric bills, and they can earn credits from their utility beyond that. In most states, if your panels feed into the grid, you can receive credits on your bill to reduce or eliminate your electricity bills during months that the solar panel system may not completely meet your home’s total needs.
Also, solar panels add energy independence. Installing solar that meets your home’s power needs allows homeowners to lock in their costs to power their home. This also shelters homeowners with solar from utility rate hikes year to year.
As a result, residential panels are becoming one of the most sought-after features for home buyers, which drives up the value of your home.
How Much Value Can They Add?
As a rule of thumb, every dollar you save on your annual electric bill should add at least $20 to your home value. For the average house, this equals a 4% home value increase. So, a $300,000 home that saves $70 a month ($1200 annually) on electricity should expect to add $12,000 to $16,800, depending on the system and its age.
Moreover, some studies have found that every kilowatt of solar panels installed will offer a $5911 increase in value on average. That means an 8kW system could add up to $47,200 in value. Imagine how much value that could add to a commercial building!
However, it’s important to remember that solar panel installations are not free. Therefore, it’s important to calculate your return on investment or ROI to see if it’s worth it.
Calculating ROI
First of all, there are a lot of important factors to calculating your return. For instance, let’s say you spend $10,000 on your solar panel setup and $200 for maintenance each year. You would then need to subtract the amount you saved on your energy bill while living there, your tax credits, state and local incentives, and the value added to your home.
Solar panels are an excellent investment if you continue living in your home for a few years before reselling. You’ll receive a 30% tax credit for all installation costs (no cap) thanks to the Inflation Reduction Act, you’ll save up to 100% on your electric bill, and you’ll receive up to 70% of the installation costs when you resell.
How to Maximize Your Return
The best way to maximize your return is to invest in solar panels three to five years before you plan to resell. This will give you a few years to save, receive your tax benefits, and resell while the panels are still relatively new.
Also, you can increase your home value and receive more tax rebates with more green technology. Energy-efficient appliances like heat pumps, electric stoves, EV charging stations, and more can offer the same 30% tax credit as solar panels, reducing your energy bill and increasing your resale value.
Still, the best way to increase your value and energy independence is with a battery. These large batteries store excess energy from your solar panels, which you can use during peak hours when electricity rates are highest, and the sun is down.
Regardless, starting with solar panels is the way to go. They’re affordable, save money, and are the best-known green tech for homebuyers!
Increase Your Home Value Today
Now that we’ve answered the question, “do solar panels increase home value?” you can decide what’s right for you. Solar panels are a great way to save on your energy bill and add value to your home, and now is the best time for homeowners to get started with tax credits and affordable installations!
Stay updated with our latest tips for homeowners, and don’t hesitate to contact us with any questions or get a quote!
