Solar Panels Increase Home Value
blair1q writes "Venture Beat reports that a study (PDF) by Berkeley National Labs has found that homes sold in California earned a premium for solar panels. The benefit ranged from $3900 to $6400 per kW of capacity. An earlier study found that proximity to solar or wind power may also raise home values. These results contradict the arguments based on degrading home values used by putative NIMBY (Not In My Back-Yard) opponents to installing or living near such energy-generating equipment."
Makes total sense. If I was looking at houses, and the prior owners had installed a hot tub, earning them a glare or two from neighbors in the process, I would also pay a little extra for that amenity too. Duh. Beneficial improvement raises value.
There's a spot in User Info for World of Warcraft account names? Really?
I wonder what year solar installations will be standard on all new homes? 2017? 2020? Probably much sooner in the American SW than in the NE, certainly.
It sure beats living by nukes, coal plants, tire burning plants, etc., eh? Even a natural gas power generation plant isn't nice to live by. Plus, you don't have to worry about the neighbors being noisy.
This is one of the reasons why it's supposed to be worth it to install solar in some places. There's heavy subsidies that bring down the cost, and electricity rates are extremely high during parts of the day in California. And you get your money back instantly when you install the panels, because if you were to sell the house the next day, the sale price would be boosted by the value of the panels.
Well, that's what they say, at least, and this article seems to prove it.
Sorry, but people arguing from a NIMBY perspective have never claimed that domestic solar power degrades home values. This is simply an attempt to attribute a completely illogical and unreasonable opposition to someone.
It's likely that many NIMBY opponents have argued against wind farms based on a) their own personal taste as to what they can see outside their window, b) a perception that house prices will be affected negatively if what you see (and hear) are wind farms.
If it's their own personal taste it comes to then arguments about house prices aren't very relevant and don't contradict any arguments - if it's house prices it comes to then the study referred to in the article isn't highly precise, as it doesn't track house prices through time. You would usually only see wind farms from locations with great views, and hear them in a somewhat larger radius, hence a simple "do houses close to wind farms sell for less at this point in time" would be difficult to make accurate.
The article mentions an avarage cost of $5000 to install 1 kW of solar, so it seems like a pretty good investment overall.
These results contradict the arguments based on degrading home values used by [...] opponents
Members of home associations that ban solar panels aren't really arguing that panels lower property prices, they're arguing "I don't want to see it". It's the same with most HA rules aimed at "protecting property values".
Science is all about firing a drunk pig out of a cannon just to see what happens.
A few years ago I got a deal from Nevada Power where they paid for half the cost of a 5kwh array. It was working great until work forced me to relocate to another state. I had a hell of a time selling the place because the general public is just not technical enough to appreciate it. One potential buyer got a static shock from the carpet as is common in the dry vegas air. She actuually thought the solar power array caused it! How am I supposed to reason with that kind of stupidity?
No kidding - you put $30k in on a solar system and that raises house prices? Because people don't need to pay extortionate power rates? What a weird concept.
The fact of the matter is, California has the highest power rates in the nation (I'd assign blame in equal parts to NIMBYs, environmentalists, PG&E, the PUC, and our legislature). Running air conditioning in the summer will kick you up into Tier 5 rates, which are currently around 50c/kWh. Getting a four digit power bill for one month is enough to convince even the most ardent anti-environmentalist of the value of solar.
If you run the numbers, rooftop solar has a levelized cost of about 24c/kWh. So it's worth it to build out capacity to meet however much power you use in the higher tier rates (Tiers 3 through 5). You don't necessarily want to run your power bills to zero (Tiers 1 and 2 are subsidized by the higher rates), but if you do, PG&E will write you a check at the end of the year. (How much has yet to be determined.) Schwarzenegger got that pushed through at the end of his term of governor - before that, PG&E would just pocket any excess capacity you generate.
I actually just had solar put in and finally turned on a couple weeks ago. It's nice running a net positive balance with PG&E, though it's still too cool for air conditioning.
Most states have specific laws that prevent HOAs from banning solar panels.
Your neighbors get hosed on their house prices.
People who have money put in solar panels. People who have money ALSO live in rich neighborhoods. Who knew?
Dog is my co-pilot.
NIMBY is about some big ugly power generation plant, not properly and tastefully installed panels on the roof.
Also, there is no increase in equity unless you ignore subsidies. Without them, solar would be the dopiest investment a homeowner could make.
This is not surprising, but not that encouraging either. If you pay for a bit of fancy landscaping and planting around your house before you sell it, you can often improve your house resale value by much more than the cost of the work. Solar also offers a warm glow of righteousness far out of proportion with energy generated.
Where I live (50km south of Canberra, Australia), we're paying ~20 of your Earth cents for a kWh during the day around here, so if you assume 7kWh per day from a 1kW solar installation (not that hard here, as we get a lot of sun), it takes 14 years to earn back $3900. Electricity will certainly go up in cost during that time, but I wonder whether you wouldn't be better putting $4000 into some safe-ish investment and concentrating on reducing your energy usage instead.
For years, I was holding out for Nanosolar or First Solar to get domestic panels out at somewhere nearer to $2/kW and without so much embodied energy in the panels, but they don't look to be interested in domestic sales. Until then, the only reason that panels are cheap in Australia is because of very high government regulated feed-in tariffs and purchase subsidies, which are just middle-class welfare masquerading as a renewable energy policy.
Until the government killed the program, there were businesses here doing energy efficiency assessments to see if houses qualified for interest free government loans to improve energy efficiency or install solar systems. An interview I heard with one assessor gave the impression that most houses had considerable inefficiency to rectify before it made any sense installing generating capacity. New Australian houses are still much less insulated than new houses in northern Europe or North America, rely too much on resistive electrical heating for the house and for the hot water supply, and the current fashion for building faux-Mediterranean rendered boxes with no roof overhang guarantees high cooling costs in summer. Old Australian houses often had no (as in, ZERO) insulation in them. Visitors from northern Europe are amazed at how uncomfortable and slapdash many of our houses are.
-Snorbert, somewhere in the antipodes
If the panels are installed as shingles (rubber shingles with a PV layer on top, covered by a plastic protective cover), then the whole roof creates power, but its not an eyesore. If its just a backyard full of panels (much like an industrial site), then it is a site, and the backyard is useless for barbeques, lawn darts, touch football, etc. It all depends on how its done. In general though, 5 kW of panels on the roof, plus geothermal heat/cooling are pretty 'hidden' and can add thousands to the value of a home, because you save thousands in annual costs, and you are 'green'. Even a small (5' diameter) windmill in the back yard might not be too much of an eyesore, depending on where you live, etc. Going green doesn't have to be painful, its just that the tree huggers and oil companies insist that it be painful; the first in a "suck it up its good for you" sort of way, and the latter in a "don't do it, oil is your friend" sort of way.
Spend 30k now only to have to wait ten years to break even? By then, you'll probably be in another house, in another city. But, I do agree. Solar power should have been installed since day one. Next generations of city planners and engineers will have to (when the oil wells run dry) go "F, maybe this was a good idea after all."
You really shouldn't use an acronym if you feel that your target audience doesn't know the meaning of the acronym.
Wake me when slashcraptacluar isn't so fucking retarded.
"A solar panel. That's just what we need to fix this place up, Daisy Mae".
Have gnu, will travel.
I put panels up 6 years ago and they save roughly $2,000/year in electricity here in California ( my previous three years before panels were $6100; I've spent $300 over the last 6 years on electricity).
A prospective home owner knows they won't have to pay that $2000/year on electricity, so if they pour that into a 4% loan, they can borrow an extra $35,000 for that roughly $160/mo savings.
So to see a story say that my panels should be worth between $10K-$20K to a home buyer makes total sense.
According to the article, if the home owner spends $20,000 to install solar panels on the home, the house is worth $5,500 more. This means the owner still loses $14,500 due to the purchase. Not really winning in my book.
If you live in an apartment, and would rather leave power generation to the pros, consider power company shares.
They pay dividends. You and a lot of other people have to pay the power company or DIY. Sometimes you can't DIY. I rent, so I can't. Shares are the only way for me to "generate my own power" without going to extraordinary measures that would probably upset the landlord. :)
My average gas+electric is less than $100, but let's say you burn $100/mo on average. If you live in California, you can buy enough PG and E shares to pay that electric bill for about $30,000.
Of course, stocks are risky; but you can "insure" the dividend stream with an option collar, or average into it. Choose your risk mitigation strategy with the click of a mouse.
Comparing this with panels is tricky. You generate with a mix (but some utilities have "green source" programs where you pay more for assurance of green. Of course, you have to trust them...).
I assume you can insure your panels as part of a homeowners policy. Not sure how that compares to options.
You have to buy the panels all at once. You can average into utilities, or even buy a utility from a different region, or buy a ute that you think is being run better than your local, or buy several different ones.
Your solar panels will depreciate. Unless there is a catastrophe of truly biblical proportions, or another Enron incident pushes the company into bankruptcy, your shares are likely to appreciate. It's hard to say where the shares will go, nothing is risk free. OTOH, the panels are certain to weaken and fail. The inverters and other hardware will fail too.
To reiterate, shares are the only option for most renters. If you really want to have panels some day, consider selling your ute shares to fund them... but you might decide getting checks from the power company is more fun.
Now, procede to condemn me as evil in 4, 3, 2...
This doesn't surprise me, what with rising electrical costs.
I just completed construction on a new house and went out of my way to put a hefty solar system (30 panels, ~6.6kwh) on it. I absolutely, positively, in every single way love it!
Ferretman
Sic gorgiamus allos subjectatos nunc
Residential solar panels are still new and rare enough that no major incidents have happened yet. When a solar panel-related accident causes a house to burn down, and insurance rates on solar-equipped homes go up, that's when the panels will start to take a toll on home values.
That is, if the panels ever become practical enough to be installed widely enough for these events to become statistical. Then, knowing that x% of homes with solar panels will burn down because of those panels, then NIMBY becomes a factor.
Or you can just move to any other state where electricity is normally $0.10/kwh or less
People would not want to have a huge array of solar panels near them, but having solar panels on the roof is fine. Picture a quarter acre worth of solar panels taking up space next door to you to provide power to your neighbor....doesn't seem very attractive, so it lowers the surrounding property values. If your neighbor has solar panels on the roof, that won't generate that negative reaction.
Just don't have incredibly tall cattle and you won't have any problems with the windmills :)
Yes, there are access roads and gates in fences and all that but it's not really a problem if it's done sensibly.
1) Shake roofs not designed to support the weight and collapse during high winds
2) Solar + Shake roof = roof rats nest, chew through shingles, invade attic
3) Solar + Shake roof = shade and, therefore, mold
All true. Caveat emptor.
After all air conditioning is a heat pump. You can buy a very simple fridge to run off the grid with a kerosene fuelled flame to expand the gas and a tub of water as the condenser. Why not use solar thermal to expand the gas?
In places where it costs a fortune to run air conditioning on electricity surely it's worth cutting out the middle step and just get a bit of solar heat to do the work? It's not as if you need a reverse cycle for warming in the tropics and subtropics.
There's plenty of solar thermal hot water systems around for very obvious reasons. This is just one step further which until now has been limited because it's so much more convenient to use electricity. High costs of using electricity remove a lot of that convenience.
Personally I live in an place designed for the subtropics with high ceilings, good airflow and up on stilts so the shaded area underneath keeps the place cool unless it is very hot. That makes A/C usually unnecessary but also completely impractical when it is very hot - a large volume of air and plenty of places for the air to escape rule it out.
If my memory recollects from what I have read about solar panels, is that within 7 years they need to be replaced. Bad investment. Da? And not very good curb appeal on some homes. Nuclear is the way to go.
Costco is now selling solar PV systems including a 5060WDC for $18K, or $3.55:W. $5.50:W increased home value sounds like a good way to nearly double your investment in solar, even before the subsidies cut the cost to $2:W or less, tripling it or better.
--
make install -not war
So does nuclear power plant in your basement.
Seriously, in the USA, construction has all but died. What is currently going is high-end homes and business (including apartment). What would make sense at this time, would be to require that all new buildings in the lower 49, to have 1/2 or more of monthly HVAC done by Solar PV. Now, that sounds like a lot, but it really is not. What it WILL do is encourage construction firms to increase insulation esp. on windows. In addition, it will encourage builders to move to geothermal heat pumps. The reason is that they are cheap to install up front, but most importantly, they have similar energy requirements winter and summer.
By requiring this, it will also make these places NOT compete against for-closed places. That later part is very important. The reason is that it prevents new homes from competing.
I prefer the "u" in honour as it seems to be missing these days.
http://en.wikipedia.org/wiki/Electricity_pricing
You're right, since I looked into it. The ROI on solar was less than 1%, it could not work economically.
And of course, in 20-25 years the equipment is work out, so you have to shell out again.
Also, potentially home buyers hate complexity. Even a pool, which is low-tech and well understood, people will complain about houses with pools because "they're so much work" (they're not).
I note the study is done in California at Berkley, which is known for its very "liberal" way of thinking. So this study is from people who would put the best light on the situation.
The cost of solar systems needs to drop by 2/3's and efficiencies double before it will make much sense. Today, it barely makes sense with huge taxpayer incentives.
You are really clueless about construction techniques here.
First off, back in katrina, we DID import some dry wall from China. We all know how that has gone. However, we stopped importing that LONG again. In addition, nearly all of it went into re-building katrina homes, not new construction.
My outside of the house is James Hardie concrete impregnanted board. TO drill through it, you need a diamond bit
plywood on the outside, not chipboard.
shingles, yes, though, I want to convert to metal when we get hit by a hail storm.
Minimum framing? 2x6 in mine. And I DEFINITELY want the metal places
Where do you live that you think that places are built that way? I live in Colorado (not an expensive place; $350-450K is the range for this neighborhood), and the average home is not built the way that you describe. However, they also do not go overboard. Engineering is such that these homes are DESIGNED and built to last 100 years plus.
But it sounds like you live in texas or Florida (both are notorious for cheap cheap cheap homes).
And the reason for the solar it because it forces homes to be upgraded, OR for many more solar panels to be installed. The builder will prefer the upgrade. So, will the home owner.
I prefer the "u" in honour as it seems to be missing these days.
First off, the 20K is for solar installs of existing homes that are trying to cover all of their electricity usage. I am speaking of NEW homes in which they are designed in. By requiring a builder to have solar for 1/2 HVAC, the builder will have to make a choice. Either spend the money on about 15K of solar, OR spend it to better insulate their homes and then use either a air heat pump or a ground based one. The reason for the insulation is easy to see. better insulation, less costs. Aerogel windows are expensive, but will double the insulation value of the best triple pane windows out there (which are even more expensive and heavy). A ground source heat pump on a NEW install is about 2-4 K above and beyond installing a gas furnace AND AC. However, it will use a fraction of the energy that an AC would. Missouri and Tennese are funny places. They are ones that can actually do air based heat pumps VERY cheaply (you do not suffer temp extremes), while most others can not.
.08 is about 1/2 of top price which is east coast. CA is around .13/KW.
In addition, keep in mind that 13% of our homes are unoccupied. Why? Because banks are sitting on foreclosures. Yes, 13%. Huge amount (better than china; they are thought to be sitting on 1/3 and about equal to EU and UK). In the USA, construction has come to a relative standstill. It is still going on, but not that much. It is higher-end and business. Now, if ppl start building low-end homes, then those banks will have ZERO CHOICE but to dump the foreclosures on the market. Do you have any idea what will happen to your house value? You will not be able to MOVE IT. Not for the next decade. Not even if you wanted to.
However, if we use this time to build BETTER HOMES, then the foreclosed homes can be released over time, as they will keep their value. In addition, many Americans will like picking up homes that have energy bills of $15-$40/month.
BTW, as to energy prices, some ppl get upset about all sorts of things. Your
I prefer the "u" in honour as it seems to be missing these days.
They have made the installation of solar panels and wind generators illegal in our township...At least fot he time being.
Technology can be forced by infusing tremendous amounts of money, but it progresses most efficiently at its own pace, neither hindered no forced. Either way ends up making it cost more in the long run. Subsidies have to come from some where and there is really only one source. As the rich 5% already pay over 50% of taxes and half the population pays no taxes that only leaves the working man and woman. It really sounds good when "they say" say, spread the wealth around, but there is really little wealth to spread, particularly when You see now much the country is already going into debt. Solar might be the answer to CO2 free energy, but it is far from being pollution free. I worked in the industry for 3 decades and I can say for sure that no state of the production from raw materials to finished devices is pollution free, while the actual generation of the cells has a great deal of pollution. BUT as one example, in the years I was involved with the materials end of the system I saw the requirement for a huge tank farm of liquid H2 and a truck a day topping off the tanks go to a single little tank that lasts for many, many weeks while the production went from a few tons of poly crystalline Silicon per year to thousands of tons AND the price of a multi pass single crystal went from 165 dollars a gram to a few dollars per kilo for poly crystal of a higher purity. I saw huge changes in the industry when sawing technology was able to cut the loss in half almost bankrupt many in the business. By making saw blades only half as thick they immediately doubled the production at no extra cost and this was long ago. However even with thin film tech, PV solar is still expensive due to the cost of installation. Add to the physical cost, a patchwork of regulations specific to locals within regions and huge differences in output between regions. We are, or have reached the point where the installation is the major portion of the installation cost. New constructions techniques where "solar shingles" are integrated into new construction, or retrofit into the time when homes have to be reshingled. Prices are coming down and drastically, BUT IF you want a fully PV solar home it's still going to cost close to 50,000 dollars. A combination of approaches, efficient constructions, efficient insulation, efficient windows, efficient heating and cooling. All of these combined can and do produce energy neutral homes even up here in the frozen North at a medium premium in construction. Energy neutral is a far cry from independence from the mains. What some call independence many of us would not be willing to accept. *HOWEVER* we are headed in that direction, as long as no one gets carried away and tries to force the technology it will come at a relatively reasonable price. Here in Lower MI we have 3 huge wind farms coming on line and the grid structure is already in place to handle the power, unlike many places in the country. We need to get away from subsidies and that applies to both coal and crude as well; which are highly subsidized. We need to get away from alcohol subsidies which are taking land used for food production for fuel instead. That raises the cost of food. Last winter I read a study that showed each gallon of alcohol that is relatively inexpensive costs over 10 dollars in subsidies. Yes at present we have lots of cheap and abundant coal, some of which is actually good anthracite coal along with lots of bituminous or soft coal with high sulfur content. China is moving away from coal even with all the new plants they are bringing on line. Still, both China and India are going to need LOTS of coal and crude. With each having more college educated middle class within about a decade than there are people in the US (man woman and child) resources are going to become both scarce and expensive. 5.00 gas this summer and 6.00 within a year or two. If Soros has his way and the US dollar is no longer the the world standard those prices will look cheap! Don't forget too, that every dollar the treasury prints (real or electronically) the value of our dollars and what they can purchase goes down which is only one of the many reasons for the current high price of crude and gas. It just isn't as simple as many believe.
...for homes sold in California. That does not translate to homes sold elsewhere. Don't drop $50k into adding solar panels if you live in Canada or the Northern States, it won't do squat to increasing your home value as you cannot save enough money to make it worthwhile for the (short) life the panels will last.
Californians pay more than twice what you pay during peak summer hours (which would be precisely when those solar panels would be generating the most electricity).