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Are you considering installing solar panels on your home and wondering how much it will affect your home’s value in a resale situation? We’re here to give you the scoop on solar panels today.
Many people are researching solar panels to offset their electric bills, and there are dozens of solar companies marketing heavily to homeowners...but how much do solar panels increase the value of a home in a resale situation? Is it enough to offset the installation costs? What if you are thinking of selling your home in the next few years? PLEASE READ THIS ARTICLE!
Installing solar might make sense for you when you factor in the energy cost savings and the tax credit over a 10 to 20-year timeframe. You should be prepared to stay in your home long term to recoup the cost of the system. If you’re considering selling your home in the next few years, please do your research. Understand upfront that the buyers will give a solar system value when you sell, but it won’t be as much as you might spend (or borrow) to install the system. (sort of like putting in a pool in Florida).
The solar panel systems we’ve seen local clients install vary in cost between $18,000 and $40,000. Solar energy systems do increase the value of your home, on average by about $10,000 to $12,000 here in our Tampa Bay region as of the writing of this article.
What if you are thinking of moving in the next 2-3 years? When you sell your home, if you took out a loan to install solar panels, don't assume that the next buyer can just take over those payments--in most cases, that loan will have to be satisfied at closing. So if you are thinking about solar, be prepared to stay in the home long term, and be aware that if you are going to sell in the short term, it will be the next owner of the home that will benefit from the bulk of the energy savings. If you are looking solely to increase the value of your home for resale sometime soon, and you are prepared to invest $20k-$40k, there are projects that will pay off better.
I wanted to do some research myself, so I contacted a few local solar companies. To my dismay, many of the appointment setters and salespeople had been trained to assure me that I would be substantially increasing the value of my home... even if I was selling it soon, and a few suggested that I would receive all of my money back in a resale situation. (Yikes!) I then also consulted an experienced appraiser to see how much value an appraiser would to a solar system when doing an appraisal within a sale situation. He gave me actual data here in our Tampa Bay market...the good news is that solar systems do have actual value, but typically not as much as the cost to install them.
The number of actual solar resales here in the Tampa Bay market is only a tiny fraction of the closed sales, so as more data comes in, we'll be sure to keep you informed.
If you are doing research online yourself, just be aware that much of the information available on the internet is published by the solar companies themselves. Do some extra digging to uncover whether what you are reading is impartial or a veiled sales presentation.
Take a look at this article from Money.com—one of the better third party articles I found—which provides actual statistics on how the resale market is responding to the value of solar systems in different areas of the nation. Their statistics correspond with what we are experiencing here in the Tampa Bay area real estate market. If you live elsewhere in the nation, call a trusted, high producing realtor in your own city and ask what their experience has been with resales of homes with solar systems.
If you'd like to discuss this question in more depth or have any other real estate-related questions, give us a call or send us an email. We're here to look out for you.
On that note, if you contemplating any big home improvement projects and wondering how they will affect the future resale of your home, don’t hesitate to reach out and give us a call or send us an email. We’re here for more than just buying and selling homes, we want to help you make smart real estate decisions that will help you in the long run.
We look forward to hearing from you soon.