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Power to Solar Properties
Question: If we add solar power to our home, how much will the value of our property increase?
The issue of solar energy and home values is complex.
The Department of Energy, quoting a 1999 study, says, “A solar electric system increases your home’s value by $20 for every $1 in annual utility bill savings, which means a system almost pays for itself with the appraisal value increase in some cases.”
Still, owners and buyers need to look at the issue more carefully. The benefit received from solar energy depends in part on the money you save or earn each year from your system.
Since the energy costs being offset by solar panels vary by jurisdiction – and since energy consumption varies by household – benefits for the same system can differ. Also:
• The solar systems we have today are better than those available in 1999. “Solar energy technologies have significantly improved over the last 20 years,” according to an educational guide provided by the state of Missouri. “These systems are more efficient, reliable and less expensive.”
• If a solar installation increases the value of a home when selling, then logically an installation would increase tax assessments as well.
• The Database of State Incentives for Renewables & Efficiency (Dsireusa.org) has a list of the tax credits and rebates available to homeowners by jurisdiction. Such credits and rebates can substantially reduce solar system costs. Be sure to check for updates in your area.
A solar panel system can make a home easier to sell because buyers may qualify for an energy-efficient mortgage or EEM. According to the HUD, “EEMs recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage.”
Translation: Buyers can get bigger loans.
For an idea of how a solar installation impacts energy costs and home values, speak with nearby owners who have installed them and ask local real estate brokers how solar systems influence neighborhood sale prices.
Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to firstname.lastname@example.org.View Foreclosure Article Archives
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