Question: Do solar panels improve or hurt the resale value of a home?
Answer: Green living. Green roofs. Green technology. With so much time spent discussing Green initiatives, you would think that investing in solar panels and other eco-friendly home products would put you in a competitive advantage when you sell your home. In my experience, that’s not the case.
Arlington residents overwhelmingly vote and promote Green policies locally and nationally, but I’ve found that when it comes down to the pocketbooks of individual buyers, most are not willing to pay a premium for a home that’s been upgraded with eco-friendly products and landscaping. Businesses, not residents, are usually the ones who take up Green initiatives because there’s a positive return for their brand and larger tax incentives.
Cost Savings vs. Aesthetics
Solar panels are a slightly different story because they can provide real savings with lower utility bills and tax incentives. However, there are two factors that offset those savings in buyers’ minds — aesthetics and maintenance concerns. The current technology is predominately the large panels you’re used to seeing, which isn’t the most aesthetically pleasing, especially when so many buyers are spending $1M+. Buyers are also skeptical of future maintenance costs if panels stop working or are damaged in a storm. Also, keep in mind that the pay-off period for the energy savings can take 10+ years.
For proof of the difficulty solar panels have had in the residential market, you don’t have to look much further than Elon Musk’s Solar City, which due to recent financial struggles, was recently acquired by Tesla.
Solar Will Improve Resale…Eventually
The solar industry has started introducing solar roofs, instead of solar panels, which incorporate solar technology into individual shingles so that it looks like a normal roof (it’s supposed to be more durable too). Right now it’s expensive, but as the prices comes down, I expect it will catch on quickly and become a great selling point.
What do you think about the resale value of homes with solar panels? It usually costs $10-15k to add solar panels to a home. If you were buying a home for $1M, would you be willing to pay a premium of $5-10k? Would you make a better offer on a home with solar panels than the same home without panels?