Photovoltaic systems, which are designed to convert sunlight into electricity, tend to increase the market value of homes, particularly if the systems are personally owned, according to an article by the Appraisal Institute, the nation’s largest professional association of real estate appraisers.
Studies evaluate impact of solar energy
In 2013, the Appraisal Institute and the Colorado Energy Office collaborated to analyze how solar photovoltaic systems impact the home-buying process. The study, which took place over a year and a half, revealed homeowners in the Denver metropolitan area are increasingly seeking single-family residential homes with PV systems, according to the institute. Because of this, homes with PV systems installed at the time of sale generally lead to more valuable transactions and shorten how long the home is on the market.
“While the study shows that solar PV systems typically increase market value, appraisers with knowledge and experience in this area are uniquely positioned to provide credible, reliable opinions of value and accurately reflect what’s happening in a particular market,” Appraisal Institute President Richard Borges II stated.
Host-owned PV systems positively impact the value of homes not only in the Denver area, but on a wider scale, as well. Senior Residential Appraiser Sandra Adomatis, of Florida, was the lead author of a study that further investigated the effect of PV systems on the market value of homes across six states.
For 43 properties in the six states, researches “generated contributory-value estimates based on gross cost (PV cost before incentives), net costs (PV cost after incentives) and income (value of energy savings from PV systems),” according to a study analysisby the Appraisal Institute.
“Researchers concluded the location, age, size and efficiency must be considered in determining the value of a PV system,” the institute stated. “The value also is impacted by local factors, such as the retail cost of electricity and any local incentives provided for those who own a PV system.”
Hiring green energy-trained appraisers
While PV systems don’t guarantee a dollar-for-dollar return, just as with any home update or installation, many shoppers consider them appealing features. What can help, however, are appraisers who understand the resale value of green technologies, or how to properly value a solar home.
One project of the Solar Training and Education for Professionals (STEP) funding program “aims to educate residential real estate agents, appraisers and appraiser regulatory officials across the U.S. about solar energy systems through web-based continuing education classes,” according to an article by online real estate database company Zillow Group.
“These new projects will help ensure that consumers encounter a confident and knowledgeable solar-trained workforce when they buy, sell or refinance their solar-powered home,” the article states.
To make sure your house and its PV system are properly valued, find and hire an appraiser who has taken a STEP continuing education class about solar energy or received similar training on how to use residential green valuation tools and optimize other best practices.