Do Solar Panels Increase Home Value?
Energy efficiency is a growing concern among homeowners, and solar panels are a well-known resource in improving efficiency and helping the environment. The amount of money a homeowner can save by using solar power is attractive enough, but how do solar panels affect property value?
Solar Adoption is Growing
Two years ago, the U.S. had hit 2 million solar installations and the researchers at Wood Mackenzie Power & Renewables expected “…solar installations to double by 2023.” In fact, Pew Research found that 46% of U.S. homeowners are considering residential solar panels.
High demand can lead to a faster sale and/or a higher sales price, but there are still other factors that will impact the value of your home on paper.
According to a 2019 Zillow Economic Research report, “During the past year, homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power. For the median-valued home, that translates to an additional $9,274,”
The report finds, however, that the increase in home value varies, sometimes substantially, by region. If solar panels are popular in a certain area, they may provide a bigger boost to the home value than in less popular areas.
Owned or Leased?
When you sell your home to a buyer who will need financing to purchase it, the appraiser has the final say in what the home is worth. Whether the solar array on your roof increases the appraised value may depend largely on whether or not you own the system.
The most common solar panel ownership scenarios, according to the appraiser guidelines at fanniemae.com, include:
- The panels are owned. Owned panels may be included in the appraised value of the property.
- The panels are leased or covered by a Power Purchase Agreement. Leased panels may not be included in the appraised value of the property.
- The panels are financed as personal property. If the solar panels are financed as personal property (and therefore serve as collateral for the loan), they will do nothing to increase the value of the home.
- The panels are financed as fixture to real estate. Panels that are considered fixtures (permanently affixed to the property) can be used in the appraisal but only if they can’t be repossessed should the seller default on the terms of the financing agreement.
If you decide to purchase solar panels, you will likely be able to someday recoup the money you spent on them. If you’re located in an area where solar power is popular, your system may just help you to sell the home quicker, and hopefully for more money.
Southwest Florida Real Estate Market Update
High Buyer demand, the lack of inventory, and the pace of sales has continued to result in rising home prices. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.07% in November, up from 2.77% during November 2020. Most experts predict more slight rises in 2022.
More Single Family Home Sales closed in Lee County in November compared to last year, and prices were up as well. The number of sales were up slightly, by 1.7%. The Median Sales Price was up 18% and Average Sales Price was up 26.3% in November.
Below are some of Lee County’s October numbers, for your reference. If you are interested in learning more about market activity in a specific neighborhood, development, city, or zip code, please let me know. I would be happy to provide you with a customized market analysis.
Lee County Single Family Home Sales – November 2021
Closed Sales 1,387 (Nov 2021) 1,364 (Nov 2020) +1.7%
Median Price $376,500 (Nov 2021) $319,150 (Nov 2020) +18.0%
Average Price $533,697 (Nov 2021) $422,452 (Nov 2020) +26.3%
Active Listings 1,680 (Nov 2021) 2,737 (Nov 2020) -38.6%
(Source Florida Association of Realtors, Data released December 22, 2021)
QUESTIONS? I am always available to answer your questions and help you with all of your Real Estate needs. I have Real Estate contacts all over the world. Please don’t hesitate to call me if there is anything I can do for you or someone you know.
Sue Jones | Realtor®
3409 Del Prado Blvd S #103,
Cape Coral, FL 33904