Does solar increase the value of your home at time of sale?

According to real estate database and economic research company Zillow, in some areas of the U.S., the answer is a solid yes.

We already know that adding solar panels to your home helps save energy costs and helps the environment, but can it also increase the home’s value?

Well—according to Zillow, in some states, the answer already is—yes.

Zillow is an American online real estate database company that was founded in 2006. It was created by Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia, and Spencer Rascoff, a co-founder of

The idea of adding solar panels to a home is viewed as an upgrade, and in the same way, homeowners are willing to pay thousands of dollars for renovations like a new kitchen or finished basement.

If anything, homeowners need to evaluate the return on investment from investing in solar panels. That’s because according to Zillow’s latest research, installing solar panels not only helps reduce current monthly utility bills; it can potentially increase the home’s value more than comparable homes with no solar panels.

The price premium, as percentage and as a dollar amount, that homes with solar power enjoy. Based on analysis of listing descriptions and transactions between March 1, 2008 and February 28, 2019 (Zilliow Economic Research)

“There is an increased demand for green living. More than 80 percent of buyers now say energy-efficient features are important in selecting their home,” said Sarah Mikhitarian, Zillow senior economist.

“We are increasingly finding that these attributes are important to prospective homebuyers. This is part of the reason that there is a premium associated with it,” adds Sarah Mikhitarian. “The other piece is that there is true value provided by solar panels — namely, future energy savings.”

Zillow’s research found that sale premium varies substantially by market.

In Riverside, California, for example, homes with solar panels sold for 2.7 percent more than comparable homes without—a markup of $9,926 for the median-valued home in the metro. In the greater New York City metro, solar-powered homes have a premium that is double that of Riverside. At 5.4 percent, that’s an extra $23,989 in value for the typical home in New York.

In three other coastal metro areas—Los Angeles, San Francisco and Orlando, Florida—homes with solar panels can fetch a premium of around 4 percent. Other states like Utah, did not have enough homes with solar installed to identify the solar premium.

Zillow calculated the solar premium by comparing homes with and without solar panels that were listed for sale and sold from March 1, 2018 to February 28, 2019. They controlled for observable attributes of the homes, including bedrooms, bathrooms, square footage, age of the home and location.

It can be concluded that the reason homes with solar panels sell for more than those without, is because they can provide substantial future energy cost savings. For homeowners who know they consume a lot of power, these future savings are worth spending a bit more money upfront.

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