There have been a number of studies recently to help consumers understand whether solar panels increase home values with the conclusion that solar homes carry a premium to non-solar homes and the premium is approximately equal to the net cost (after incentives) of the system. The most recent study, Selling into the Sun conducted by the Berkeley Lab evaluated a data set of 3,951 homes spanning 12 years and 8 states.
Solar Home Paired Sales Analysis
A related study, Appraising in to the Sun conducted by the an appraiser group evaluated a smaller set of the transactions from Selling into the Sun and applied the paired sales analysis on 43 homes. A paired sales analysis is a real estate methodology that basically looks at homes with similar characteristics that have sold recently. The conclusions from the study were very similar to Selling into the Sun.
Sunvago’s San Diego Home Valuation Check
At Sunvago, we leverage public research studies, but also like to supplement with our own research – we want to “do our own homework” to ensure we get the right conclusions. To that end, we conducted an abbreviated paired sales analysis in San Diego. San Diego is an optimal location for the study, as many of the other studies have focused on California markets and certain zip codes in San Diego have solar penetration rates of greater than 20% (also see solar penetration by state). We chose transactions in Chula Vista, an area in south San Diego that has high solar penetration and large housing developments that were built in the early 2000’s, so it is easier to find homes that have very similar characteristics. We used permits from the city of Chula Vista and real estate transactions from Zillow.
Although our sample size was small (only 4 transactions), the homes we nearly identical and had been sold within the same year. On average, we found that solar homes carried a $37,250 premium to non-solar homes or 6.7% of the the home value. If you remove the two outliers, the remaining two had a premium of $26,500. Assuming a 6 kilowatt system between $4.00 a watt and $5.00 a watt the gross cost of a system is between $24,000 and $30,000 or $17,000 and $21,000 after the 30% ITC credit. This gives us confidence that the market is valuing solar systems at or above their net cost. For further information, please read our detailed analysis on how solar panels increase home values.
|Address||Date Sold||Price||Solar Premium $/%||Sq. Ft||Year Built||Solar Permit #||Date Installed||Zillow Listing|
|1101 Morgan Hill Dr||12/4/2015||$623,000||$23,000 (3.8%)||2,601||2000||B13-2148||02/24/2014||Zillow Link|
|1153 Ferndale St||9/26/2016||$600,000 ||2,447||2000||Zillow Link|
|1520 Cordelia St||11/4/2015||$540,000||$30,000 (5.9%)||1,952||2000||B14-0226||03/12/2014||Zillow Link|
|1516 Cordelia St||4/14/2016||$510,000||1,953||2000||Zillow Link|
|1529 Hunters Glen Ave||7/17/2015||$506,000||$6,000 (1.2%)||2,274||2005||B14-2663||1/2/2015||Zillow Link|
|1538 Hunters Pointe Ave||3/14/2016||$500,000||2,274||2005||Zillow Link|
|1278 Blue Sage Way||05/22/15||$650,000||$90,000 (16.1%)||2,909||2005||B14-2570||12/5/2014||Zillow Link|
|1289 Blue Sage Way||9/23/2015||$560,000||2,923||2005||Zillow Link|
Author: Casey Anderson
Casey is a Research Analyst at OhmHome and leads the company’s collection and analysis of residential solar data. OhmHome’s mission is to be the most consumer-centric source of independent information for homeowners interested in purchasing solar.