One of the most common apprehensions homeowners have when they consider investing in solar is the perception that the technology is too expensive. Over the past few years, the cost of solar has dropped dramatically. Solar energy system ownership is now affordable for most families. This is good news for their monthly energy budget, and for our environment. Accurate information about the affordability of solar energy is extremely important. We devote a great portion of our time to helping people understand the value of clean energy options, and how we can all play a part in the good stewardship of our planet.
We believe that education is the key to making good financial decisions. Our goal is to provide homeowners and business owners with the necessary information to make sound investment decisions for their homes and businesses. One commonly overlooked financial benefit of solar energy utilization is the increased value of the home or business where the solar system is located. Yes, it is true! The cost of investing in solar technology can actually, to a large degree, be offset by the rewarding benefits of an appreciated home or business.
In their most recent report, the National Renewable Energy Laboratory (NREL) “found that solar homes sold 20% faster, for 17% more” while conducting research on homes in California subdivisions. The U.S Department of Energy (DOE) Lawrence Berkeley National Laboratory also “found strong evidence that homes with solar photovoltaic (PV) systems sell for a premium over homes without solar systems”.
Why is this? Well, when homeowners install solar energy on an existing home, they are dramatically improving the energy efficiency of that home. Thus, when the homeowner is ready to sell the home, it is more likely to sell faster because the increased energy efficiency and lower utility bills are attractive to prospective buyers.
The Lawrence Berkeley study explains that homes with photovoltaic (PV) panels installed sold for a higher premium based on dollars per watt per system, approximating $3.90 to $6.40/watt. Thus, homes sold for an average price premium of $17,000 when the study’s average 3.1KW system was installed. Another contributing factor to a price premium for solar powered homes was, “If solar was already on the house, and factored into the price, buyers were more likely to pick a house with solar….”
As we discuss solar investments with our friends and neighbors, we sometimes are asked an interesting question. That question is, “how long before the solar system will pay for itself?” This question is interesting since it is rarely asked of other items that we purchase today. For instance, if we were interested in buying a car or a boat, would we ask what the “payback” period is? If we were paying each month to rent cable TV, or to rent electricity to power our homes, would we ask “when is the payback period?” Certainly not, because we are accustomed to paying these fees without any expectation of having these items pay for themselves. The fact is that solar is one of the few investments that we can make to reduce our energy bills, provide a permanent hedge against ever increasing utility costs, decrease our dependence on importing fuel, protect our environment today and for future generations, and increase the value of our homes or businesses. As an additional bonus, our investment pays for itself through energy savings.
How much additional home value can you expect to see when you invest in a solar system for your home? The Appraiser Institute says, “Depending on your location and electricity rates, for every $1 you save annually in electricity costs, (by investing in solar), your home value increases $10- $20. While there are a variety of contributing factors to electricity costs, in a typical household that spends approximately 25% of its electricity on hot water heating, the cost of purchasing a solar water heating system can be recovered in 4-6 years of reduced energy bills”.
Another perk that is often overlooked is that not only will your water heating bills reduce by 50-90%, you’re also protected from finite fuel supplies and price hikes because the sun is free. Everyone loves saving money and the sun comes up every day to give us a helping hand. With reduced system costs and customized consumer plans, many people are “going solar” for less than a dollar a day. Do you think solar is the right option for you?
For more information on the NREL study, click here: http://www.nrel.gov/docs/fy07osti/38304-01.pdf
For more information on the Berkeley Lab Study, click here: http://newscenter.lbl.gov/2011/04/21/bright-spot-for-solar/
For more information on the Appraisal Institute, click here: