Many Australian homeowners are still hesitant about investing in them due to the high upfront cost of installation and uncertainties about the impact on their property’s value if they decide to sell it. So, the question is, do solar panels actually increase the value of a home?
The short answer to this question is YES, there’s a good chance that having solar panels installed on your home can increase the value of your property. However, how much value is added will depend on a variety of factors, such as the size and quality of the solar panel system, and even potential buyer preferences.
In this article, we will dive into potential returns from investing in solar power and other concerns such as:
- The exact value of how much solar panels add to your home
- Reasons why solar panels add value to your home
- Reasons that prevent Australian homeowners from pursuing solar panel installations
Read on to learn all of these!
Exactly how much value do solar panels add to your home?
To be honest, it’s hard to say. Different sources will tell you different things. For instance, the National Renewable Energy Laboratory (NREL) reports that homes equipped with solar panels sell 20% faster and at a price that’s 17% higher than average.
On the other hand, a news article published in The Sydney Morning Herald says that the median value per property owner of homes with solar panels was $125,000 higher than the property value of those without.
The value of your home is subjective, and some people might be disinclined towards homes with outdated or overpriced solar systems. In essence, homes with solar systems carry a substantially higher price tag than those without solar installed.
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3 reasons why solar panels add to the value of your home
The reasons listed below are based on a study from the National Renewable Energy Laboratory (NREL) and offer insights into how solar panels can improve the value of your home.
Factor analysis indicates that the increase in home value from PV ownership is largely attributed to three dimensions:
- “Altruistic” benefits, such as environmental conservation.
- The financial advantage of reduced energy bills, selling back electricity to utility companies, and boosting the home’s resale value.
- Personal satisfaction from increased self-sufficiency, innovative technology, and pride of ownership.
Homeowners love the financial benefits that come with solar panels installed
One of the main reasons homeowners invest in solar panels is the potential for long-term financial benefits.
According to the study, homebuyers with solar PV systems are more satisfied with their purchase. They’re so satisfied, in fact, that 77% said they would buy the same house again while two-thirds boast about their savings.
The primary reason for all this delight is the considerable reduction in utility bills. Not to mention, installing solar panels also means that you get free electricity after the entire system is paid for.
Recommended: How long does it take to pay off solar panels?
Homeowners also have altruistic purposes for supporting solar power
Solar panels are considered significantly more sustainable than traditional energy sources of fossil fuel-based electricity from utility companies. Homeowners love it for several reasons:
- The absence of greenhouse gas emissions during electricity generation,
- The sun is an infinite source of raw materials, and
- Having an opportunity to make a positive environmental impact
Owning a solar panel system can foster a sense of community among homeowners committed to reducing their carbon footprint and promoting neighborhood sustainability. Additionally, it can inspire others to invest in renewable energy sources, such as solar power.
Recommended: Are Solar Panels Sustainable?
Self-sufficiency is a big selling point
With the rising cost of electricity, self-sufficiency has become increasingly attractive to home buyers.
For one, being capable of producing your electricity means you don’t have to rely so much (if at all) on utility companies. As previously mentioned, this has both financial and environmental benefits.
Financially, self-sufficiency through solar energy means lower bills. Environmentally, solar panels generate electricity without relying on finite fossil fuels that also emit harmful greenhouse gas.
Recommended: How much money do you save when you switch to solar?
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What’s preventing Australian homeowners from investing in solar power?
Although solar power provides clear environmental and financial benefits, two main reasons still prevent many from adopting it.
- The high upfront cost of installing solar panels can be a deterrent, and
- Aesthetic worries often arise due to the visible nature of solar panel systems.
Advances in technology and manufacturing have addressed these issues, though. Let me explain.
High upfront costs
The initial investment to have renewable energy in homes has gone down significantly over the past decade. Right now, it costs roughly $1000 per kW of solar power. Back in 2010, a kilowatt cost approximately $7000 to install.
Granted, most homes would need about 4-6 kW to offset their electricity bills. So, it’s still going to cost several thousand dollars – and many don’t have that luxury.
The good news is that there are numerous financing options available to Australians. You can read more about them in our Solar 101 Guide but for your reference, here are your options:
- Personal loans
- Green loans
- Adding the cost of your solar panel system to your home’s mortgage
- Solar leasing
- Power purchase agreements (PPA)
- Interest-free loans (we generally don’t recommend this)
Furthermore, modern solar panels are more durable and efficient than ever. So, along with lower energy bills, the cost of maintenance is lower, too.
Solar panels can be seen as large, and bulky, and they might not blend with the existing architecture, materials, and color of the house. Oh, and let’s not forget about the landscaping elements that might be required to ensure that the panels get adequate sunlight.
All these concerns can prevent some home buyers from even seeing your house as an option. That much is true.
However, the study from NREL also says that the homebuying market is so large that it doesn’t matter if a handful of people take your home off of their list. Plus, the increase in property value as well as the quicker turnover far outweighs the aesthetic worries of some.
Installing and maintaining solar panels can increase home value and their appeal to prospective buyers, as studies have shown they can increase resale value.
Solar panels are also becoming affordable compared to the past few years, and technology is improving, making them more efficient and reliable.
If you decided to invest in a solar-powered home, check out these 3 FREE quotes from pre-vetted installers to compare prices and find the best deal for you.