The 10 states where solar power can boost a home’s value the most

California will be the first state in the US to require the use of solar panels on all new homes starting in 2020, but the passage of the legislation hasn’t ended the debate on an important question: Cost: Does the solar installation fee pay off the homeowner?

Some developers aren’t even waiting until 2020 and are pushing for solar homes for what they say is the best reason: it’s simply what serves the market best. home buyers match their energy needs with efficiency and cost. The state estimates the new solar rule will save homeowners about $19,000 over a 30-year period. Others say the trust will push up housing costs too much for many homebuyers.

There’s another way to look at the question: Will the addition of solar increase the home’s value at the time of sale? According to real estate information company Zillow, in some states the answer is yes. Zillow’s research shows that in the same way that homeowners are willing to pay thousands of dollars for renovations like a new kitchen or finished basement, they need to evaluate the return on investment from their investment in solar energy. God.

Installing solar panels in your home not only helps reduce your monthly utility bills; it can potentially increase a home’s value by up to 4.1% over comparable homes without solar panels, according to recent solar research conducted by Zillow – or an additional $9,274 la for the median home value in the US

Recent natural disasters such as the California wildfires, heatwaves across Europe, and extreme meltdown events have prompted many people to seek out more eco-friendly living, including buyers. home.

“There is a growing demand for green living. More than 80% of buyers today say energy-saving features are important in their home selection,” said Sarah Mikhi HR, senior economist at Zillow said. “We’re increasingly finding that these attributes are important to prospective homebuyers. This is part of the reason that there’s a premium that comes with it. The other part is the actual value that is earned. powered by solar panels – specifically to save energy in the future.”

Energy savings partly depend on how a particular home consumes energy. For example, a home with heated floors may see a higher premium from solar additions (although this is not a correlation that Zillow specifically studied).

“For homeowners who know they consume a lot of electricity, the future savings are worth spending a little up front,” says Mikhi HR.

To determine solar premiums in each state, Zillow compared the sales prices of homes with and without solar systems listed for sale and for sale during the study period – March 2018 and February 2019. The company examined all transactions that occurred and identified which homes had solar panels in their listing descriptions, controlling for observable attributes including size, age, location, and more. position and market value at the time it was listed for sale. Zillow also controls for local market dynamics and the time of year the home is sold.

In New Jersey, homes with solar panels can sell for 9.9% more than homes without a solar system. That’s a $32,281 profit for the median-value home in that state.

Here are the top 10 states with the highest solar premiums, as found by Zillow:

1. New Jersey: 9.9% or $32,281 for a median-value home.
2. Pennsylvania: 4.9% or $8,589 for a median-value home.
3. North Carolina: 4.8% or $8,996 for the median value home.
4. Louisiana: 4.9% or $7,037 for a median-value home.
5. Washington: 4.1% or $15,916 for the median-value home.
6. Florida: 4% $9,454 for the median-value home.
7. Hawaii: 4% or $24,526 for a mid-value home.
8. Maryland: 3.8% or $10,976 for a median-value home.
9. New York: 3.6% or $10,981 for a median-value home.
10. South Carolina: 3.5% or $5,866 for a median-value home.

However, solar premiums can vary across state lines.

While the solar premium for the state of Florida is 4%, it rises to 4.6% in Orlando, Florida.

In New York City, solar insurance premiums are 1.8% higher than statewide, which is $23,989 higher in value for a typical New York home.

And in California there are big fluctuations in major city areas: while the statewide solar premium is 3%, in San Francisco it rises to 4.4%, in Los Angeles to 3 .6%, but in Riverside, solar premiums drop to 2.7%.

Other states, like Utah, don’t have enough homes with solar installed to determine a solar premium.

“There are so many reasons why people use solar,” said Evelyn Huang, customer experience manager at Sunrun, the largest solar installation company in the US. customer experience manager at Sunrun, the largest solar installation company in the US. “One of the reasons is saving, I think that’s obvious. The second reason is control,” Huang said, referring to monthly expenses.

“Our utility companies need more and more money to maintain, and they pass that cost on to homeowners. But that’s pretty unpredictable for homeowners. You just don’t know your prices are going to go up. how much,” Huang said. “I think that’s another reason why customers are considering going solar. They want to know how much they’re going to pay each month. If you’re on a fixed income, you need a budget. You need to know what to expect.”

Lisa and Jerry Chretien, a couple from Cape May County, New Jersey, decided to rent solar panels on Sunrun’s roof a year ago. High utility bills and the desire to live greener and cleaner prompted them to make the decision. Since going solar in June 2018, Chretien’s electricity bills have dropped, especially in the summer.

“As soon as we open the pool and turn on the air conditioning in May… our electricity bill will be close to $800, sometimes more,” Lisa Chretien said. speak. “Saving money, especially with kids in college, is a big help and a big saver. And with so many incentives, tax wise you’ll get a break. It’s just one plus points along the way.”

For Kerrie Lane, owner and operator of a cleaning service and resident in South Jersey, the experience has been similar. After moving into her new home, she received her first electric bill: a staggering $1,100. Kerrie knew she needed to do something to make her electricity bill pay.

Lane said. “My first electric bill in this house was $1,100. I knew I needed to fix this and make it manageable and Sunrun gave me the consistency I was looking for. .”

A Sunrun spokesperson said that assuming the annual utility rate increases — the national average rate increase is now around 3%. – Solar customers see average utility bill savings of 10% to 40%. Solar contracts include fixed energy prices per kilowatt/hour that are typically lower than electricity prices in most areas across the US

A Sunrun spokesperson noted that customers are still required to pay basic utility infrastructure fees separate from generation costs, such as wiring maintenance, and may also still use some electrical products. from utility sources, depending on the size of their home and energy usage, as well as the season. Seasonality is also an issue for utilities. In the summer, for example, prices tend to be higher to meet demand, according to the U.S. Energy Information Administration.

Depending on their transaction with Sunrun – offering packages, loans, prepayments and cash purchases – customers may also pay a monthly fee to the company. Sunrun says that more than 85% of customers don’t buy the system outright, but pay a certain amount upfront and then make a monthly subscription payment.

Residential construction company De Young Properties in California built its first zero energy building in 2013 – which means it has the potential to produce as much clean energy as it consumes annually.

De Young began redesigning his traditional home prototype in 2008 looking for ways to build comfortable, energy-efficient homes at affordable prices. “We want to build better houses,” said Brandon De Young, the company’s chief executive. that it’s important to keep making progress.” , has a history of three decades.

“Basically, you have to sacrifice your comfort for your energy bill or your energy bill to be comfortable. And we saw that there was an opportunity here to try and deliver the best of both. two worlds for our homebuyers,” De Young said.

Many homeowners rent solar panels from companies including Sunrun and Tesla, which means that at the time of sale, the seller needs to buy out the lease or the seller needs to find a buyer willing to take over the contract. rent that house. Solar rental companies offer lease assignment services. If the previous owner was entitled to state or federal tax credits related to the solar project, that financial incentive will not transfer to the new owner.

Like any home improvement, solar systems have a limited useful life. After 20 years or more, solar panels typically start generating less power and that takes away some of the value associated with solar panels, which will likely be reflected in the maintenance fees. its danger to a particular house. But Zillow notes that this is similar to many other attributes of a home. For example, an HVAC system usually needs to be replaced every 10 to 15 years, but people still appreciate having an air conditioner and are willing to pay a premium for it.

Investment tax credits offered by the federal government to invest in renewable energy projects including solar are expected to be phased out for single-family homeowners. in 2022, but lobbying against this tax credit – currently as high as 30% – is ongoing. If phased out, it would take away an incentive for homebuyers to buy a solar system, even though costs are coming down at the same time. Bill Gates recently commented that solar and wind power no longer need the same support as other renewable energy sources and that government incentives should be phased out, adding that energy companies Solar and wind volumes must now be large enough to reduce costs through economies of scale.