How Solar Panels increase your homes value
Posted February 5th, 2018
Would you pay $20,000 for a solar system if you knew it would add $20,000 to the home’s value immediately? That’s what a solar salesman told one of my real estate friend’s clients. Is that legit though? What advice would you give someone talking to this salesman? This is a timely scenario, so I wanted to share my friend’s question and my response.
Real Estate Friend: I have a client that wants to add solar to his late 1980’s house and was quoted a price of $20,000. The solar salesman told my client that it would add value dollar for dollar but I have my doubts, what do you think?
My Thoughts: Where is this “salesman” getting “dollar for dollar” from? Is he an expert or could he prove this value actually? Would the system add $20,000 in value regardless of the neighborhood, state, or price range? What if the system cost $60,000 or $80,000? Would that add dollar for dollar value as well? It’s a great sales pitch, but achieving dollar for dollar value is not something that happens in every case. A complete kitchen remodel, for example, could cost $50,000 but that doesn’t necessarily mean it will add $50,000 value to the home.
When it comes to solar, there will be value recognized over the long term as savings build due to the decreased cost of energy. This doesn’t mean that adding solar to a home can’t bring forth a dollar for dollar increase, but it is skeptical about this salesman’s claim.
Appraisers and the real estate community have to consider what buyers are actually presently willing to pay for the system and solar installations are still a fairly new field with little data to support or contradict his claim. Appraisers have to ask questions like “What kind of savings will the owner see from solar?” and “What sort of price difference is there?”.