The offices of estate agents and many home improvement magazines are jammed full of articles trying to explain which forms of home improvements offer the greatest possible return on an investment on your property. Indeed, with investments such as a new bathroom or a living room, so many people get these built that there is a wealth of research available into exactly how much it’s likely to cost and how much you can expect to receive back as payment.
Solar panels are certainly a bit more unusual. Hence there is far less research into their attractiveness as a way to increase your home’s value. Recently, research has been announced, coming from UCLA and UC San Diego in the USA, trying to figure a formula to show how much of an effect it is possible that they will have.
They found that solar panels add 3.6% to the value of a home as its sales price after controlling for observable characteristics and local neighborhood price differences. This represents approximately at $22,554 increase in the average sales price for properties with their solar power systems.
These figures need, however, to be taken with a grain of salt. Firstly, they apply to neighborhoods in the USA. Not only might there be a societal effect, but also much of the value of solar power comes from the various government schemes that are available. In the UK, schemes may pay different amounts which mean that the impact of solar on San Diego property may differ dramatically. The statistics from this study do not account for this.
What these figures can show us, however, is that solar panels are being accepted by society as a good thing to have in your house. If they had shown that the prices were falling on households with solar power, then the opposite would be true, so this is reassuring that people aren’t turned away by systems on your house.
If you are (maybe!) lucky enough to live in an area filled with those that like to hug trees and drive electric cars, then the propensity to be willing to pay more for properties with installed solar was found to be slightly greater, as would be expected, and the opposite was true for less environmentally-conscious communities. Indicators used in the work to illustrate the “greenness” of a community were the Green party registration share, Democrat registration share, median income, education, truck ownership and Toyota Prius ownership.
Indeed, the study estimated that the premium for solar properties was 1% higher if other homes within the same area have had photovoltaic systems previously, and there was a decreasing return found as the system sized increase – any system is better than no system, but a colossal installation is not much better than a smaller one, so this is worth bearing in mind.