Does Solar Add Value to My Home?

Does having a solar system increase my home’s value? Well…it depends.

As it currently stands, if you do not own the system, its value can’t be included in your home’s appraisal. In fact leased/PPA solar agreements may cause homeowners problems when they sell their home. One such problem is the monthly cost of the solar lease; it can be included in a buyer’s debt to income ratio. This reduces the number of people who can afford your home. However, if you own your system there is good news.

The FHA (Federal Housing Administration) REQUIRES that a solar system be included in the value of your home if you OWN the system. Not only do you have reduced electricity costs, but the value of your home is increased.

There are a couple different metrics for determining the increased resale value. One study shows that on average, a solar system increases the home’s value by $5,911 for every 1 kilowatt (kW) of power installed. Thus, a NEW 5kW solar system adds an average value of $29,555 to the home.

Another way of determining the value of your system is the 1:20 ratio. For every $1 in energy bill savings you increase the value of your home by $20.

Solar can force appreciation, but only if you OWN the system. Not only does your home’s value go up, but homes with solar can sell 20% faster than homes without it. When all the benefits are factored in, solar can potentially pay a 200%+ return on your initial investment. Sounds like a “bright” idea to me.

John Jennings, III

BRE# 01982171

John Jennings, III is a licensed Realtor® who works for Mid State Realty in Coalinga, CA. For more articles like this one go to johnjenningsrealtor.com. John can be reached at john@oaktreere.net and (559) 970-4312.

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🏡HERE'S WHAT I DO: Provide customers legendary 5-star service including but not limited to professional photos, a 3-D virtual tour, professionally installed sign and implement strategies to help sellers earn more on the sale of their home. 🏡WHERE YOU'VE SEEN ME: I'm very active on LinkedIn, Instagram, Facebook. My wife, Valary Jennings and I also produce a weekly show named Jennings Junction. 🏡WHAT OTHERS SAY: "We loved working with John Jennigs. The whole process was super easy from start to finish. John was very professional and reliable. I loved using the app which made it easy to track upcoming appointments." - C. Beale = Happy Customer "John is very knowledgeable, sympathetic to clients' needs, and trustworthy. He means what he says, and has excellent time management skills" M. Distad = Industry Pro 🏡TAKE THE NEXT STEP: If you are interested in buying or selling a home or if you are thinking about joining the eXp community, give me a call. (916) 581-0238 CalDRE 01982171 View all posts by JohnJenningsRealtor