How Much Do Solar Panels Increase Home Value In 2023?
Many homeowners that decide to make the transition to solar energy do so because of the big long-term financial savings that can be had in comparison to paying the utility company for their electricity.
But not only do solar panels save you money, they also increase the value of your home – by a substantial amount. However, the amount is dependent on multiple factors and varies by market. How Much Do Solar Panels Increase Home Value In 2023?
Some of the things that influence how much your home value increases as a result of solar panels include:
- The location of your home
- Local cost of electricity
- The size of your home
- The size of your solar panel system
- The age of the system
- State incentives for solar
- Frequency of power outages locally
- System replacement value
- Solar installation prices
- Local understanding of solar technology and benefits
How Much Do Solar Panels Increase Home Value In 2023?
While specific numbers vary between each installation and property, a study by the Lawrence Berkeley National Laboratory showed that homes increase by an average of $15,000 as a result of a solar panel installation.
- The study took place over a 10 year period and concluded in 2015. While the average increase was just $15,000, the findings were more detailed than offering just this figure alone.
- They found that there was an average increase in resale value of between $4,020 and $5,911 for each kilowatt of solar panels that have been installed.
- At $4,020 per kWh of solar panels, a 6kW solar panel installation would increase the market value of a home by $24,120, on average
- This means that the average increase in home value of a 9kW system is in the region of $36,180 – more than the cost of the installation, once incentives are factored in
National Renewable Energy Laboratory Findings
According to an earlier study by the National Renewable Energy Laboratory (NREL), each additional $1 in annual energy bill savings from solar panels will add $20 to the total value of your home.
- Generally speaking, property value increases are directly proportional to both the number and quality of the solar panels that have been installed.
- Another factor is the value of your home – larger houses normally receive higher equity boosts, though this increase often equates to a smaller percentage of the total home value.
- Based on the NREL findings, $1,000 of annual energy savings would equate to a $20,000 increase in home value
Solar Panels Can Help Your Home Sell Faster
The study by the NREL found that not only did solar panels increase the market value of a property, they also led to it being sold 20% faster, on average, and for 17% more, compared to non solar homes.
Appraisals need to be carried out by an individual who is familiar with solar technology, so that you can ensure that you are given an accurate estimate of the value of your property.
Appraisals With Solar Panels
There are three methodologies to value residential solar. They are:
- Income approach
- Cost approach
- Cost comparison approach
Overall, we recommend the income approach, as it estimates the forward-looking value of the energy cost benefit.
The income approach bases the valuation on the projected income that the solar panels will generate for the homeowner for the remainder of the estimated lifespan of the system.
This method of appraising a home with solar panels aligns the most with the seller’s and home buyer’s perspectives.
In states that have more mature residential solar markets, real estate agents, lenders and appraisers have a greater understanding of the economic benefits and value of solar panel installations.
This is because of the prevalence of comparable home sales that are able to guide accurate pricing decisions. Compared to states such as California, Illinois is somewhat of an emerging market for solar. However, we’re catching up fast.
Nevertheless, it is vital for homeowners to seek an appraiser with the right knowledge to be able to conduct an accurate appraisal, so that they benefit fully from the total equity that a solar panel system adds to a home.
How Much Do Solar Panels Cost In 2023?
There are three different types of solar panel available in 2023, and they vary in efficiency, lifespan and overall cost. The three types of solar panel are:
- Monocrystalline solar panels
- Polycrystalline solar panels
- Thin film solar panels
The most popular type of solar panel for residential solar installations are monocrystalline solar panels, as they’re more efficient and have the longest lifespan and therefore represent the most cost effective investment, long term.
The cost of solar panel installations varies a great deal from state to state, so we’ll split the answer to this question into two parts.
What is the average cost of solar panels in the US in 2023?
The national average price per watt for installing solar panels in the US in 2023 is:
- Between $3.10 and $3.65 for monocrystalline solar panels
- Between $2.90 and $3.20 for polycrystalline solar panels
- Between $2.50 and $3.00 for thin film solar panels
How Much Does It Cost to Install Solar Panels in Illinois in 2023?
- As of January 2023, the cost of solar panels in Illinois before tax is between $2.76 and $3.68 per watt, with an average price of $3.16.
- For a 6kW solar panel system, the average installation costs between $16,116 and $21,804 before incentives, with an average of $18,960
- After incentives, the cost of a 6kW system could be reduced from an average of $18,960 to $8,532 – compared to an average increase in home value of up to $24,120
- The average payback period of a solar panel system in Illinois is 5 – 10 years.
What Solar Incentives Are Available In Illinois?
Solar incentives can significantly reduce the overall cost of a solar panel system. The main solar incentives available in Illinois are:
- The Federal Solar Investment Tax Credit, worth 30% of the cost of the system for eligible taxpayers
- The SRECs scheme, run by Illinois Shines, which is calculated based on the size of your solar panel system, and can be worth up to 25% of the total cost
- Solar Net Metering, which ensures that you get the full benefit from all the power that you produce, by allowing you to generate utility credits for every kWh you feed into the grid
Solar Panels Are A Sound Investment In 2023
In 2023 in Illinois, thousands of people are waking up to the realization that solar is a sound investment. As we’ve discussed, not only can it save you significant sums of money on the cost of utilities, it also gives a massive boost to your home value.
While solar panels are a sound choice for all homeowners, the process of making the transition from the grid to solar energy isn’t straightforward – it entails many hurdles, and lots of red tape. That’s why Green Home Makeover is here to help.
We’ll manage every aspect of your solar project, from A to Z, so that there are no headaches or hiccups, and all you have to worry about is being home on the day of the installation.
If you’d like to know more about how we can help make your solar dream a reality, get in touch today for a free, no-obligation consultation and quote.