Solar Increases Home’s Value

Sunny Beam displaying morning status.My wife and I live and work in a solar-powered home. I’m writing this from my office using a computer running on the freshest electrons you can get, produced just a few feet away,  from photons only eight minutes old. That’s how long it takes light to travel 93 million miles from the sun to the photovoltaic panels on our roof. Everything we do here that uses electricity is powered by them. 100%.

A small device called a Sunny Beam sits on my desk displaying information about our energy production. As I write this, there are some high clouds so we’re not at maximum but the system is still cranking out nearly five thousand watts of clean, renewable energy – much more than we’re currently using. The extra power is going to the grid, spinning our meter backwards.

Over the course of a year, the average amount of energy we produce is slightly greater than the amount we use. May 10th is the anniversary of our solar installation and we haven’t paid a dime for electricity in six years. The surplus is stored in the form of account credits that we can use in the future, to charge a plug-in vehicle perhaps. We didn’t plan for an energy surplus; we just use less of it as things, including our habits, become more efficient.

Of course, we had to pay for the solar equipment that makes it all possible. We chose to live fairly simply over the years and had saved enough to allow an investment in our energy future. Was it worth it? We would not have done it if it didn’t make sense to us, but we’re tree-hugging environmental types with crazy notions. We see value in avoiding the production of carbon-dioxide (114,868 pounds and counting). We like helping kids avoid asthma, and reducing the mercury and radioactive fallout that’s emitted into our atmosphere and oceans. Would the same investment be worth it to someone with different values? What about those who measure life solely by the dollar?

“We like helping kids avoid asthma, and reducing the mercury and radioactive fallout that’s emitted into our atmosphere and oceans. Would the same investment be worth it to someone with different values? What about those who measure life solely by the dollar?”

A new report sheds some serious light on the true value of solar-powered homes, as determined by the actual marketplace. The news is very good. “An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California” (PDF) contains sixty pages of detailed analysis prepared for the U.S. Department of Energy by researchers at the Lawrence Berkeley National Laboratory and San Diego State University.

In 2010, 880 megawatts of grid-connected solar photovoltaic (PV) systems were installed in the U.S. 30% of it was residential. California is the largest market for PV in the country with nearly 1,000 megawatts of PV capacity and where roughly 90,000 residential PV systems have been installed. The residential selling prices of approximately 2,000 PV-equipped homes were compared with approximately 70,000 similar but non-PV homes.Graph of recent power output for one day.

The study has a lot of useful detail and breaks down the numbers in several ways, but the bottom line is that the market undeniably recognizes the value of PV. One way to express the value is to look at the ratio of the sales price premium to annual electricity cost savings. For existing homes with PV, the ratio is estimated to range from 21:1 to 26:1. A typical Southern Nevada home with a 6 kilowatt (DC) PV system can save about $1,400 per year. This would translate to a home sales premium range of roughly $29,000 to $36,000.

The price of solar has never been lower and with currently available incentives, it can even be less than the numbers above. We know for a fact that the energy savings will more than pay for the system given enough time. Now we also have solid documentation that the investment can be recouped by a homeowner who decides to sell their solar home. Either way, investing in clean energy can make very good financial sense. The other benefits of clean energy are just icing on the cake.

Of course there’s no such thing as a free lunch. Owning a solar energy system does require a certain amount of responsibility and diligence on the part of the owner. Every morning, whether I feel like it or not, I have to make sure the sun comes up. That’s a tradeoff I’m willing to make – quite happily.

Download the full 60-page report:Download the full report on residential PV values.

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