Solar & Home Resale Value

“What’s up with solar panels and home resale value?" As a licensed Real Estate Broker in the State of Texas and an Active member of the local Board of Realtors, I love getting this question. The answer is, “it depends”. There are really two ways to evaluate this question. The first is how Banks value a solar generating asset. The second is how consumers or home buyers value a solar generating asset. Or better put, it’s worth whatever someone else is willing to pay for it!

Let’s start with the first. The National Appraisal Board commissioned a study to evaluate how best to appraise solar assets. The following was the conclusion:

Valuing a PV system is done using an income capitalization approach, which considers the present value of projected future energy production along with estimated operating and maintenance costs that are anticipated to occur during the PV module power production warranty time-frame.

This treats solar like an income producing rental property. As rents go up, or in this case energy prices, the value of the asset actually goes up!

The Second is less objective and I will just call it “Market Value”. How marketable is a home with solar? This all depends on the professional you have hired to help you sell your home. Solar should be a differentiated feature of the home and not just a blip in the home’s description. The monitoring software should be displayed to prospective buyers and the benefits conveyed to prospective home owners. The energy savings should be conveyed as an annuity similar to that of a rental property that represents a real value. As solar gains popularity, so will Realtors who understand how to position solar as the one feature that sells the home. In a buyer’s market, it may be the one thing that sells your home over the one up the street.