Until recently, it wasn’t clear whether homeowners who had installed a solar PV system could expect to receive a higher price for their investment (that is, compared to the home’s selling price if they hadn’t installed solar panels at all).
Now, thanks to a recent study by Lawrence Berkeley National Lab, that question can be definitively answered as a yes.
“Overall, this study finds that 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,” said Ben Hoen, a Lawrence Berkeley Lab researcher and lead author of the report.
The research did not include data for homes that had PV solar systems installed via a third-party leasing agreement, such as those offered by SolarCity where customers do not have to front the costs of a system.
Hoen and his collaborators — including researchers from Texas A&M University; the University of California, San Diego; and Sandia National Laboratories — analyzed real estate transaction data from eight states (California, Connecticut, Florida, Massachusetts, Maryland, North Carolina, New York and Pennsylvania) over the 11 years from 2002 to 2013. According to Lawrence Berkeley Lab, this doubles the number of PV solar system home sales previously studied, and makes it the most comprehensive study of its kind.
Hoen said that in addition to looking at a broader time period — one that included 4,000 transactions — the LBL study is the first to try to hone in on if there was a depreciation in the value of PV home solar systems over time, as well as if that premium (that is, the difference in selling price between homes that have PV and homes that do not) was diminished during the housing bubble and bust.
The results? “We found that for every subset in our data, a premium for [houses with solar PV] that was relatively new or up to 8 years old still saw a premium for homes inside and outside before, during the bubble and after the bubble,” Hoen said.
The team got their results by using a pricing model incorporating certain components that influence a home’s selling price, such as the individual home site, neighborhood and market characteristics. Then, they compared the selling prices of homes with PV to those without.
New homes ended up garnering a premium of an average of $3.58/watt, while existing homes gathered an average of $4.51/watt.
But Hoen warned that homeowners shouldn’t apply these premium values to their own home without consulting an appraiser first.
“The premiums we found might not be present if the market continues to decrease the PV system installation price,” he said, referring to the recent decrease in PV’s hard and soft costs. “As PV system prices come down, that might have an influence on premiums in the market.” Regional differences also exist, he added.
Yet Hoen does note that the study has larger implications for the solar market.
“This does seem to say that there is a robust market for homes with PV. To the degree that consumers are consistently wanting homes with PV, that market should continue to have a premium…and that should give greater confidence to greater institutional stakeholders that might lend money to homeowners that want to install a PV system.”