In 2015, the Department of Energy reported that adding a solar array to your home could net you $15,000 more dollars at the time of sale than houses without the energy-producing modules, which was exciting enough.
Now a new study suggests that in the Northeast, where a number of solar markets are emerging on the national stage, the increase is even more astounding.
The study, conducted by Redfin, a national realty company, and Sun Number, which has developed an automated system to determine the solar potential of homes, teamed up to study how installing solar panels on homes in the northeastern United States affect home prices.
Sun Number’s automated system creates what it calls a “Sun Number” between one and 100 to assess the potential for a particular roof. The company claims that the number makes it easier for homeowners and home buyers to understand the actual solar potential of their current or future homes. For the purposes of the study, the combined companies looked at cities with an average “Sun Number” above 70.
Then Redfin examined those cities and determined which ones had the lowers percentage of homes mentioning “solar panels” in the sales listing. Using those criteria, the companies determined which cities would benefit from adding solar panels to more roofs to increase the resale value of the homes – in some cases significantly.
The average sales-price increase attributable solely to solar panels is almost $99,000 in the Northeast cities studied.
According to the survey, the Top 10 cities in the Northeast with the most untapped solar potential are:
1. Providence, RI
Median Sale Price: $139,400
Median Sale Price for Solar Listings: $329,000
Average Sun Number: 79
2. Rochester, NY
Median Sale Price: $107,000
Median Sale Price for Solar Listings: $136,500
Average Sun Number: 80
3. Syracuse, NY
Median Sale Price: $95,000
Median Sale Price for Solar Listings: $262,500
Average Sun Number: 84
4. Worcester, MA
Median Sale Price: $173,000
Median Sale Price for Solar Listings: $215,000
Average Sun Number: 82
5. Buffalo, NY
Median Sale Price: $108,000
Median Sale Price for Solar Listings: $200,000
Average Sun Number: 83
6. Boston, MA
Median Sale Price: $450,000
Median Sale Price for Solar Listings: $629,251
Average Sun Number: 71
7. Newark, NJ
Median Sale Price: $191,000
Median Sale Price for Solar Listings: $345,050
Average Sun Number: 76
8. Augusta, ME
Median Sale Price: $115,450
Median Sale Price for Solar Listings: $153,500
Average Sun Number: 75
9. Albany, NY
Median Sale Price: $171,495
Median Sale Price for Solar Listings: $243,750
Average Sun Number: 81
10. Concord, NH
Median Sale Price: $182,500
Median Sale Price for Solar Listings: $290,000
Average Sun Number: 72
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Average $99K Price increase? Ya sure about that?
This only applies if the system is owned by the homeowner, not a lease or power purchase agreement. When the system is owned, it is an asset and increases the value of the home. However, according to NREL.gov (National Renewable Energy Laboratory), when a system is leased or a PPA, because the homeowner doesn’t actually own the system, it is a liability (an encumbrance), and actually reduces the value of the home.
Nope, not at all. It does not reduce the value of the home. It might not increase the value like ownership but there’s no data that demonstrates that PPAs or leases reduces the value of a home. In fact homes with solar, any home that is, sell about 17% faster.
Kristan,
You are dead wrong. It 100% does not hurt the value and it does not create any encumbrances on the property. NREL said nothing of the sort. With over 70% TPO the market still loves the lease and PPA even if you dont. The transfer process is very easy and done everyday numerous times. OIne sheet of paper and one phone call. My mother is a Realtor and has been for 27 years. Homes that are getting discounted energy are flying out of inventory. The only variable is when a realtor has no clue what they are talking about, the sales become harder. A real realtor who knows their stuff will always sell the home for more because the energy savings amount to tens of thousands over the life of the agreement. I would venture to say that you are not in the solar indsutry and that this is merely opinion based on how you feel.
Good morning , do you have any data that backs up your assertions? We have PPA and Ownership programs that don’t become any liability (lien) for the property or the owner. I think we should be careful to just pass information online without being able to back it up. Have a wonderful day
This study is of no value. It does not compare similar homes with and without solar, so that you could tell what value was added to the home by installing solar. It likely means that people who can afford and are interested in solar own more expensive homes. This is NOT a measure of increase in value.
In my opinion…..a study like this would only hurt the cause of a solar installer. There are too many ways to spin scenario. The best way to tell a story is to report the straight truth, not a bent version to appease an audience!
I would hope that somewhere in the amount of data you collected you could put together a study like J.F. mentioned above. Any study that shows a home owner with little or no electricity bill when they sell a house is a good report for those in the middle income bracket looking for one. I don’t know about a $90+K increase in home value, but an $8./mo electric bill is one less bill for someone making $60-80K /yr.
More valuable homes are more likely to have solar panels anyway because (a) they are owned by more affluent owners, and (b) who is going to put solar panels on a cheap, run-down house? The study would be much more solid if it compared comparable homes head to head and reported a percentage difference, or an increase in value relative to the cost of the panels installed. Claiming a $99k increase for an array that probably cost $15k-$20k is simply not believable… but if the increase were, say, 150% of the price of the install, it would be both more credible and still very appealing.
The more compelling study by DOE looked at 4,000 homes with solar that had sold in eight states, and compared their resale value to those of 18,000 randomly selected comparable homes without solar. The value of the homes with solar increased by an average of about $4.00 per watt of installed solar (e.g., $24,000 for a home with a typical 6,000-watt system). This is more than the net investment (after subsidies), and is a separate value than the energy savings.
This was specifically for host-owned solar. A similar study for Third-Party Owned (TPO) solar, like leases and PPA found that they added no resale value, whereas more informal studies (see Bloomberg on the topic) found they decreased value.