Solar Power Adds a Premium to a Home’s Resale Value

Lawrence Berkeley National Laboratory researchers report that a rooftop photovoltaic system can boost a home’s resale value. The study, “Exploring California PV Home Premiums,” compares 1,894 PV home sales to 70,425 non-PV home sales in the same neighborhoods from 2000 through 2009. When the researchers controlled for differences in size or different features like granite countertops, “we could estimate PV and non-PV, and the assumption is the PV system is what’s driving that premium,” explains Berkeley Lab staff research associate and study co-author Ben Hoen. Researchers determined that larger and newer systems generated larger premiums, with a $5,911 higher premium for each 1 kW increase in size but a $2,411 lower premium for each year a system aged. “Appraisers can go out and look at individual homes and say, ‘Okay, how much can I add?’ and they can reference our work,” Hoen adds. However, appraisers have had a difficult time incorporating the value of PV into appraisals, especially in markets where the number of PV home sales is low. The Berkeley Lab is expanding its research in a project that will cover 150,000 homes in 14 states. “The appraisal community and the lenders and underwriters need to understand these assets have value and need to be appropriately valued during the transaction process,” Hoen concludes. | Read More