Sunset over San Francisco

Does Solar Increase the Value of Your Home?

Solar Does More than Reduce Your Energy Costs

It is not uncommon for homeowners to spend thousands of dollars updating their homes. The cost of a kitchen remodel alone can reach into the tens of thousands. Just as the savvy homeowner evaluates their return on investment for these larger projects, they must do the same when considering investing in solar panels.

Most of the talk surrounding the financial benefits of installing a home solar system focus on energy savings. The energy savings going solar brings are incredible and, in PG&E territory, will save you tens of thousands of dollars over the lifetime of your system, but today I wanted to talk about how going solar can actually increase your property's value.

How Solar Increases the Value of Your Home

Recent natural disasters in California -- droughts, wildfires, and heatwaves, oh my! -- have inspired residents to pursue greener lifestyles. More and more Californians are purchasing electric vehicles and searching for energy-saving features in homes. According to Sarah Mikhitarian, a senior economist at Zillow, "More than 80% of buyers now say energy-efficient features are important in selecting their home and we are increasingly finding that these attributes are important to the prospective homebuyer.”

Just as these features are becoming more desirable to prospective buyers, especially in areas like the San Francisco Bay Area, research is also demonstrating that adding a solar system to your home has the potential to increase its value. In 2019, the real estate website Zillow ran a study to determine how much value a solar system added to home prices throughout the United States. The percentage increased varied by location, with the highest percentage being found in metro coastal areas like Los Angeles, San Francisco, and Orlando.

This is great news for homeowners in the greater San Francisco Bay Area, where the median home price is around $1,000,000. A 4.1% increase on that price is $41,000!!! So definitely more than the price of your solar system.

Potential buyers are also drawn in by the potential energy savings. This is especially the case in PG&E territories where customers are subject to rate hikes and rolling blackouts while already paying premium prices for energy. In the end, however, regardless of what drives the desire for solar, there is great short- and long-term investment value in solar.

Why You Should Own Your Solar System vs. Leasing

Many people are surprised to learn that leasing your solar system can deter potential buyers. Selling your home before your solar lease is up can be complicated. As the seller, you may be forced to buy out the remainder of the lease, or you must convince the buyer to take it over. Many buyers are wary of taking over an existing lease and would rather buy a property where the solar system is already paid for outright.

Will Solar Panels Cause an Increase in My Property Taxes?

In short, no. In California, property tax increases are typically the result of a reassessment of your property. Property reassessment generally occurs under two conditions: when a property is sold or when a property undergoes major renovation or new construction. However, the installation of a qualifying solar system is exempt from a property tax reassessment, according to Section 73 of California's taxation code.

Though this exemption was initially set to expire in 2016. However, it has been extended until January 1, 2025, making now an ideal time to go solar. To take advantage of this great solar incentive, you want to make sure that you select a qualified system and submit all necessary paperwork.

Now that we have determined that there exist almost no downsides to investing in a solar system for your home, what are you waiting for? Schedule a complimentary phone or in-home consultation with SolarUnion today!