Solar energy is quite the buzzword these days. Why?
First, solar panels technology is becoming less expensive.
Second, qualified homeowners can take advantage of ITC Tax credit (talk to your tax advisor to see if you qualify).
Third, many people are seeing savings on the monthly electric bill.
To make it even easier to go solar Texas Direct Solar offers $0 down financing for qualified homeowners. Pretty nifty, huh?
Now, even with everything stated before people still have questions. Probably the most common one we get is.
Can installing solar panels raise your home’s value. Is that true? Let’s find out.
The short answer.
Yes, in most cases installing solar panels on your home will boost its value and earn you a higher sale price. Let’s unpack that a bit. Remember, technically a house is only worth what someone is willing to pay for it. If your buyer values a solar panel system, then they will be willing to pay more for your home. These days, solar energy is attractive to buyers for a few reasons:
● Enjoying the benefits of the system without the upfront cost
● Monthly energy bill savings
● Potential to earn money by selling electricity to the power company
● Being environmentally friendly
However, this effect is strongest when you own your system. If you are leasing a system, some buyers will see this as a complication they don’t want to get involved in.
How Much Can Solar Affect Home Value?
Putting a fixed number on it is difficult. Your location, the size of your system, the type of system, it’s efficiency conversion rate, and the age of your system at the time of the sale will all affect the price. (Keep in mind we aren’t appraisers or realtors 🙂
However, here are some numbers you can sink your teeth into. This study found that for every $1 reduction in energy cost per year from any cause of energy efficiency, the home’s value went up by $20.
This means that solar home value is somewhat tied to the cost of electricity in your area. The U.S. average is 13.14 cents a kilowatt-hour. In Texas, we enjoy a slightly lower rate of 11.98 cents per kWh. With an average use of 14,112 kWh per year, Texans pay on average about $1,690 per year for electricity.
Even if your new system only cuts your electricity bill in half, you will save $845 per year. Following the $1/$20 ratio in the study we mentioned, that means that panels may add a whopping $16,900 to your home’s value!
Another report by Zillow found that U.S. homes with Solar Panels Sell for 4.1% More, and 5% Faster. In fact, the search volume for homes with solar panels has been increasing significantly over the past 5 years.
Here’s a snapshot of Google search volume from January 1, 2015-January 17, 2021 for solar in Houston. One note, these are specific search terms that are being tracked and because not everyone uses the same search terms when they Google they may not represent the full volume of searches.
What if I refinance my home?
If you are refinancing or entering into a new mortgage on your existing home, there are two options for handling your solar loan.
Option 1 is to pay off the solar loan with the proceeds of the new mortgage.
Option 2, a subordination of your solar loan to your new lender is available. This will keep your solar loan in place and will allow your refinance to proceed.
Be sure to allow 3-4 weeks for processing, whichever option you choose.