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Tuesday, January 19, 2016

Understanding the Resale Value of Roof-Top Solar Installations

       As a well-known proponent of solar power and electric cars, I am often asked for advice about installing roof-top solar by homeowners wanting to know how much value it will add to their house.  Here’s what I tell them. 

       There are three ways to obtain roof-top solar photovoltaic (PV) systems: outright purchase, 20-year lease paid monthly, and 20-year lease paid in full up-front.  My first advice is don’t buy or lease unless you intend to live in your house at least five more years. If purchased, you won’t get back much of what you invested and if leased the requirement to assume the lease may not appeal to some buyers (even though it’s a good deal for the buyer).  

       Solar sales people may tell you that you’ll increase the value of your house by a high percentage of what you spend for your system, but I don’t see any basis for that claim.  If it’s paid for, the system will, perhaps, help your house sell faster than a competing listing, but not for $20,000 more.  It all depends on the market and existence of competing listings at the time, which can’t be predicted.
      A multi-state study of sales of solar-powered homes by the Lawrence Berkeley National Laboratory in 2014 (click here) concluded that an owned system adds $4/watt to a home’s value, but, again, it depends on the market — and I’m not seeing it.
      If you see yourself staying in your house a long time and maybe buying an electric car, the decision is an easy one. The payback is quick enough (under 10 years), and you’ll live without a big electric bill and enjoy free fuel (electricity) for your car or cars.

Published Jan. 21, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.

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