US homebuyers willing to pay more for homes with solar panels, says report

A group of researchers conducting one of the largest-ever studies of its kind has quantified that U.S. homebuyers are willing to pay more for properties that have a solar system installed.

A multi-institutional team of scientists and researchers led by the U.S. Department of Energy’s (DOE) Lawrence Berkeley Laboratory analyzed almost 22,000 property transactions between 2002 and 2013 in one of the most comprehensive and authoritative studies to date.

Over the duration of the research, the team found that the 4,000 properties in the sample study with PV systems installed attracted keen interest from homebuyers undeterred by the solar premium attached to the roof.

The appraisers – which included researchers from Sandia National Laboratories – discovered that properties with a typical 3.6 kW solar system sold for around $15,000 more than a similar home without solar installed. This equates to a solar rate of approximately $4/watt installed, and the study reveals a correlation between solar panels and willingness to purchase the home.

"Previous studies on PV home premiums have been limited in size and scope," said Ben Hoen, lead author of the report titled Selling into the Sun. "We more than doubled the number of PV home sales analyzed, examined a number of states outside of California, and captured the market during the recent housing boom, bust and recovery."

Residential PV systems are now installed in more than half a million U.S. homes, which means the issue of PV’s value is of increasing concern for the real estate industry. Valuing solar systems accurately appears to be the first challenge for the industry – a step-change that will bestow additional growth in the PV market the more the real estate sector gains greater confidence in its valuation methods, suggests the study.

The report also identified a small, non-statistically significant difference between PV premiums for new and existing homes, while the existence of a "PV green cachet" – where homebuyers will happily pay a certain amount for a PV system of any size and incrementally more as system size increases – was also noted, as was a depreciation in the amount homebuyers are willing to pay for older PV systems.

"As PV systems become more and more common on U.S. homes, it will be increasingly important to value the homes and the systems accurately, using a variety of methods," said the report’s co-author, Sandra Adomatis. "Our findings should provide greater confidence that PV adds a quantifiable premium to a wide variety of homes in California and beyond."