Buying a solar energy system will likely increase your home’s value. A recent study found that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement, and home buyers across the country have been willing to pay a premium of about $20,000 for a home with an average-sized solar array. Additionally, there is evidence homes with solar panels sell faster than those without. In 2016, California homes with energy efficient features and PV were found to sell faster than homes that consume more energy. Keep in mind, these studies focused on homeowner-owned solar arrays. When it comes to third-party owned (TPO) systems, data shows that while they add some complexity to the real estate transaction, the overall impacts in terms of sales price, time on market, agreement transfers, and customer satisfaction are mostly neutral. In some cases, TPO systems can even add value. The PV Value® tool is helpful for both home sellers and homebuyers. It calculates the energy production value for a PV system and is compliant with Uniform Standards of Professional Appraisal Practice and has been endorsed by the Appraisal Institute for the income approach method. Make sure your appraiser uses this tool to get the most accurate estimate of your PV system’s value.
Installing solar panels is a great way to save money, however, it’s important to understand just when you can expect to see those savings. Some options allow savings the day the system is live, where as others come with an upfront investment and provide greater returns over time. If you borrow money with a loan or qualify for a lease, you can often reduce your monthly electric bill immediately. If you decide to do a pre-paid power purchase agreement, or buy the system outright, you will have an upfront expense, but save more in the long run.
If you prefer to buy your solar energy system, solar loans can lower the up-front costs of the system. In most cases, monthly loan payments are smaller than a typical energy bill, which will help you save money from the start. Solar loans function the same way as home improvement loans, and some jurisdictions will offer subsidized solar energy loans with below-market interest rates, making solar even more affordable. New homeowners can add solar as part of their mortgage with loans available through the Federal HERO, which allow borrowers to include financing for home improvements in the home’s ptoprty tax. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC, which is a 30 percent federal tax credit on your system that is available through 2022. Learn more about the ITC.
The amount of money you can save with solar depends upon how much electricity you consume, the size of your solar energy system, if you choose to buy or lease your system, and how much power it is able to generate given the direction your roof faces and how much sunlight hits it.
Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid. Check the National Utility Rate Database to see current electricity rates in your area. In some cities around the country, solar is already cost competitive with the electricity sold by your local utility. The cost of going solar has dropped every year since 2010, a trend researchers expect to continue. Not only are the prices of panels dropping, so are the costs associated with installation, such as permitting and inspection—also known as “soft costs.
It should also be noted that energy efficiency upgrades complement solar energy economically. By using Energy Star appliances and other products in your home, you’ll need less solar energy to power your home.