How Does Solar Increase Home Value?

How Does Solar Increase Home Value? The Benefits of Solar Power for
Property Owners

How Much Can Solar Increase Your Home’s Value?

Installing solar panels is more than just a smart move for lowering your energy bills and reducing your environmental footprint, it can also increase the value of your home. Before weighing resale value, it helps to know what a solar system costs in Canada and how much solar actually saves over its life.

Numerous studies and real estate reports show that homes with solar panels tend to sell for a premium compared to homes without them. There is no large Canadian study of solar and resale prices. In the US, Zillow found homes with solar sold for 4.1% more than comparable homes (2019), and Berkeley Lab found buyers paid about $4 per watt of owned solar, roughly $15,000 for a 3.6 kW system. This increase in value stems from a combination of financial, environmental, and practical benefits that appeal to homebuyers.

Panels typically carry a 25-year manufacturer warranty, and depending on your province’s rates and rebates the savings may pay back the system before you sell (see typical payback by province). Since you’ve already done the legwork to install solar, it makes it easier for potential homebuyers to include it in their decision, especially when you can demonstrate how your system has effectively eliminated your electricity bill.

If you are buying a home with solar, ask for the panel and inverter model numbers, the warranty documents and the monitoring login. The manufacturer warranties belong to the equipment, not the original installer, so they still matter if that installer has since closed. Xolar can take over service on a system another company installed.

Factors That Influence How Much Solar Adds to Your Home’s Value

While solar can certainly boost your home’s value, the exact amount depends on a few
factors.

• Location: The impact of solar on home value can vary based on where you live. In regions with high electricity costs, the savings provided by solar are more substantial, which can result in a greater increase in home value. Some home markets in Canada have extremely high home prices compared to others. In these markets it should be extremely easy to recoup the cost for more savings on your solar system, since it will be a smaller percentage of the overall home sale.
• System Size and Efficiency: The size and efficiency of your solar system also play a role in how much value it adds to your home. Larger systems that generate more electricity, and therefore offer greater savings, will typically increase home value more than smaller systems. For example, if you can show a buyer that your solar system has completely eliminated your power bill it would make your home an attractive choice.
• Ownership vs. Leasing: It’s important to note that owning your solar system is more advantageous for increasing home value than leasing it. When you own the system outright, it’s considered a permanent improvement to the property. If you lease the system, potential buyers may be hesitant to take over the lease agreement, which can impact the home’s overall appeal.

Why Do Homes with Solar Panels Sell for More?

Solar-powered homes tend to command higher prices on the real estate market for several
key reasons. Let’s look at the main reasons solar homes sell for more.

1. Immediate Savings on Energy Bills

One of the most appealing aspects of purchasing a home with solar panels is the immediate savings on energy bills. Buyers know that they’ll pay less for electricity, or even have a completely eliminated electricity bill from the moment they move in, which can make the home more attractive compared to similar properties without solar. Also, since your home solar system will be factored into the price of the sale of your home, a potential buyer will have that amount factored into the financing they would acquire for the purchase. Home loan terms can be as long as 30 years meaning your solar system won’t significantly increase their monthly home payment. This gives your homebuyer immediate savings on day 1 with solar from their normal monthly expenses on power, making your home an attractive purchase for that reason alone.

2. Long-Term Energy Savings

Solar panels typically carry a 25-year manufacturer warranty, so the energy savings continue well into the future. How fast they pay back depends on how much sun you get, what you pay for power and which rebates apply. You may have already more than fully recouped your investment on solar by the time you choose to sell to your home, and its lifespan is long enough to return that much value to your homebuyer as well. Solar panels protect homeowners from fluctuating energy prices, offering a level of stability and predictability when it comes to monthly energy expenses. For buyers, this translates to long-term financial benefits, as they can expect to save thousands of dollars over the life of the system. This extended period of savings can add significant value to a home.

3. Energy Independence

Your home may appeal to different types of buyers if you invested in solar batteries. These types of buyers would be people who value not just energy savings, but also 100% uptime on their home’s electricity in the time of a grid outage. Solar panels with batteries allow homeowners to generate and store their own electricity, reducing reliance on the grid. This energy independence is appealing to many buyers, especially those who are concerned about power outages. With solar panels in place, homeowners gain greater control over their energy production and usage.

4. Environmental Benefits

Homes with solar panels produce clean, renewable energy, reducing the property’s overall carbon footprint and making it more attractive to buyers who prioritize sustainability. In today’s environmentally conscious market, many buyers are looking for homes that align with their values. Solar panels are a symbol of sustainability and a commitment to reducing carbon emissions, which can make a home more desirable to eco-conscious buyers.

Key Selling Points for Solar Homes:

• Lower energy bills from day one
• Energy independence and protection from rising utility rates
• Sustainable living and a reduced environmental impact
• Potential eligibility for provincial and federal incentives