Add a new steel front door to your house and you’ll likely recoup the investment if you have to sell. But what about a solar power system?
A group of California economists looked at that question in a recent study and found that on average, homeowners in California who install photovoltaic solar panels to power their homes can recover nearly all the investment costs if they move–and that’s on top of the annual energy savings.
The economists looked at utility data, sales records of single family homes and building permit data in San Diego County and Sacramento County from 2003 through year-end 2010.
The study, published by the National Bureau of Economic Research, titled “Understanding the Solar Home Price Premium: Electricity Generation and ‘Green’ Social Status,” is available here.
For the average installation, the authors found that solar panels added a $20,194 premium to the sales price of the house based on repeat sales data (houses were in the mid-$500,000 range).
The National Renewable Energy Laboratory offers a useful guide when determining how much your property’s value will go up. According to its research, each additional $1 in energy bill savings (from your solar installation) adds $20 to your home’s total value.
The exact numbers vary from property to property and installation to installation, but recent research shows an average increase in resale value being $5,911 for each 1 kilowatt (kW) of solar installed. In a state like California, for example, a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home.
The property value advantages of solar energy only increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home.
It’s important to note that these statistics only apply to today’s housing prices and utility rates. As electricity prices go up (as they most certainly will), the advantages of solar energy rise proportionally as well.
With the right-sized installation, solar energy is an investment that potentially pays a 200%+ return – far exceeding most any other financial vehicle you can imagine.
And unlike most investments on the market, you actually begin enjoying those returns on Day 1.
Thank you to our friends at Forbes for providing the original article below.
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