photo courtesy SunRun
The following is a guest post by Nami Sung of SunRun
With home prices down and decreasing, homeowners struggle to make their homes more marketable and identify improvements that deliver a noticeable return on investment. For example, how do you know if a kitchen remodeling project is going to increase property value or eat at your savings without helping you sell? Smart homeowners can look at studies or reports to find home improvements that will help get their house off the market faster, and recent studies indicate that solar panels help homes sell. In fact, the U.S. Department of Energy's Office of Energy Efficiency & Renewable Energy states that a solar home will sell twice as quickly as a home without solar panels, and the U.S. Department of Housing and Urban Development reports that energy-saving improvements "attract attention in a competitive market." Homeowners have started to speak to the benefits of solar for home sales as well. For example, a San Jose resident who purchased a solar home explained, "even if my house didn't come with solar, I would have put panels on it because I know it will save money on utility bills, and I want my house to match or surpass the value of others in my neighborhood."
The same homebuyer indicated that she was excited to learn the home she liked had solar because she knew it would benefit her financially while she lived there. In her words, "utility rates aren't getting any cheaper."
Studies also show lower electric bills can increase property values. According to ICF Consulting, reducing electric bills by $1 a year can add $20 to your home value. So, if you cut electric costs by $1,000 each year, you may see a home value increase of $20,000.
Solar Power Can Lower Monthly Electricity Bill
Home solar power lowers monthly electric bills because homeowners replace traditional electricity from the utility with affordable solar energy. The cost savings from a solar investment can save money today and allow homeowners to market a built-in cost reduction when it's time to sell.
With home solar, you have more control over how much you'll pay for power and you can rely less on the volatile rates characteristic of traditional utilities. One cause of utility rate volatility, for example, is fluctuating fuel costs. Factors such as utility operating costs - anything from infrastructure to healthcare for employees - are also a factor.
Residential electricity rates in California increased about 6.7% on average per year from 1971 to 2001, according to the California Public Utilities Commission. When it's time to sell, the stable cost of solar energy becomes a valuable asset and a tremendous selling point.
Solar Power as Service Lowers Financial Risk for Homeowner
Many homeowners shy away from solar because of the high upfront costs of $30,000 or more. However, new solar service options eliminate this cost barrier. With a solar service, the solar provider owns, installs, insures and maintains the solar panels; the homeowner just pays monthly for the power they use. The average homeowner saves 10-15% on their total monthly power bill - in addition to making a marketable home improvement in a tough market.
One example of this type of solar service company is SunRun. The company designs agreements that allow homeowners to transfer their cost-saving service to new homebuyers in the event of a move. [TH note: We've covered a number of companies offering solar power as service before; not all may offer service in your area though, service areas are expanding.]
If you're still skeptical, take a look at the numbers: Shea Homes, a new homes builder, performed a study showing resale value of California homes with solar panels increased by 55%, while that of homes without solar panels increased by only 45% during the same period of time. Another study by Clarum Homes reports that all 257 solar homes in one Clarum Homes development sold two years faster than planned! Further, while these homes were priced between $379,000 and 499,000, they sold for as much as $600,000.
As real estate prices continue to drop, home improvements that save you money and help you sell your home faster are a smart choice. As studies show, home solar will not only reduce cost of ownership, but also help your home stand out from the pack.
Nami Sung blogs for SunRun, a home solar company offering a solar power service. SunRun owns, installs and insures the solar panels, and the homeowner just pays monthly for the power they use.
More on Solar Power:
All the Benefits of Solar PV Without the Financial Risk: The Solar Power as Service Model
SunRun Expands Solar Power-as-Service Program to Massachusetts