How Do Solar Panels Impact the Value of My Home?
If you’ve been noticing a lot of solar panels on top of roofs in Utah, you’re onto something. There’s no doubt that solar energy is an interesting, exciting trend that’s caught the attention of homeowners wanting to protect the environment and save some money on rising energy costs.
But buying solar panels and having them installed is a big commitment and isn’t exactly cheap, so how do you know you are making a good investment?
When it comes right down to it, it’s too early to tell whether adding solar panels to your home will increase its value. And to understand why, you have to know a little bit about how home appraisers think. Comps, or comparables, are regarded as the single-best tool in determining a home's value. They contrast criteria from recently sold properties in a neighborhood, such as sale price, age of house, size, square footage, etc
Because solar panels are a relatively new technology, there haven’t been enough sales of homes that have solar. It just isn’t an industry standard yet. And oftentimes there isn’t a comparable for home.
When there isn’t a comparable, it causes a bit of a problem because the home appraiser has to sort of “guess”. Solar panels are just too new and so there’s not enough data for appraisers to justify the added value yet. So, while you might consider your solar panels a selling point, they can potentially become a hurdle when it comes to sell your home.
The advice we would give to our clients is, if you know that you are going to be moving in the next 3-5 years, you should seriously consider going solar because you are carrying all the risk. You are hoping that a buyer will be willing to pay extra because the home has solar panels, and even if you do find a buyer willing to pay, if the home appraiser can’t justify the value--then you’re headed for an uphill battle.
We firmly believe that solar energy is the future. In time, it will become more and more affordable and ultimately become an industry standard. When that happens, solar energy will definitely become a selling point, but until then it’s just a little too early to tell.
We’d be happy to talk to you more about solar panels or any other questions you may have about real estate. Call or text one of the BHURDinUtah agents, or drop a comment on our facebook page and get your questions answered TODAY