Increasing Home Value with the Benefits of Solar Panels

The benefits of solar panels have long been touted by environmentalists because of their ability to significantly reduce the use of fossil fuels, coal and natural gas, but the actual cost of the installation of solar panels has always been a stumbling block for the technology to gain widespread usage. Today, with federal benefits for solar panel installation, the benefits of Solar panels make more sense than ever, particularly if increasing home value is your ultimate goal.

Increasing home value has always been a touchy subject for homeowners. Typical renovations such as updated bathrooms, kitchens, fresh carpeting and paint are often touted as being “good” upgrades to your home because their average return on home value is typically around 60%. Additions like pools, extra living space and finished basements have much more volatile ability when it comes to increasing home value. Generally, these upgrades may only return as little as 40%-50% of what you put into them.

Thanks to federal subsidies, solar panels may be able to return far more to your pocket than ever before. In fact, recent economic studies from California indicate that homeowners opting to install solar panels on their homes may realize as much as 97% of their initial investment in the solar panels. Given that most solar panels to supplement home power supplies (after incentives) will cost about $20,000, that means that most homeowners will see as much as $19,400 of their investment returned in their home’s resale value. You might be thinking that the additional $600 is little more than a write-off, but you’re wrong.

The Economists performing the study did not factor in the savings realized by the installation of the solar panel to increase home value. This savings includes the reduction in monthly utility bill costs, which over the course of a year, could comprise a savings of at least $1,000 or more. There are two options when it comes to installing solar panels to increase your home value that will have an impact on just how much you save on your electric bill. The first is to install just a few solar panels, and the second is to install an entire bank of solar panels and then take your home completely “off the grid.” Where at one time, this was a proposition that could easily run north of a $100,000 investment, the declining costs of solar panels, coupled with increased efficiency, have made it much easier and less expensive to do.

As a way to reduce America’s dependence on foreign sources of power as well as to improve the general condition of the environment, solar panel installation in homes makes more sense than ever, both as a way to save money on a monthly basis, as well as to bump up the value of a home in a depressed housing market.

Sources:
Forbes.com: “How Much Do Solar Panels Boost Home Sale Prices?”; Ashlea Ebeling; 2011
National Bureau of Economic Research: Understanding the Solar Home Price Premium: www.nber.org


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