Opinions on adding Solar panels to a primary residence

[S Corry Jones]

Looking for some ideas and opinions on the expected (if any) value add of installing solar panels on a primary residence. Wondering if anyone has done this more recently? Most forum posts I saw were 5 years old. Just trying to gauge the value add of installing them balanced with energy savings, the Utah state solar incentives (25% can be deducted from state income up to 1,600) and federal tax credits (26% of installing a solar system deducted from federal income). Any ideas and opinions are appreciated. 

[Steve K.]

I guess I'm uniquely qualified to answer this question for you: I'm a Realtor, a former solar professional having installed solar on thousands of homes in this area including several of my own properties, and have both bought and sold several properties with solar here as well (assuming Boulder is your market because your profile says Boulder, but your comment mentioned Utah?). 

Payback period/return on investment will depend on several factors, but the range for payback period is 3-7 years here. In my experience, in our market , solar does add resale value IF it is owned and not leased. Leased systems can be a bit problematic as the leasing company has a fixture filing (similar to a lien) that adds a layer of complication during the sale (buyer must qualify for and assume the lease, or seller needs to pay off the system prior to sale).

I recently sold a property with a big old 10kW system that I listed for $20k above comps without solar. We had multiple offers on it the same day it was listed and it sold for well above ask. At closing, I talked to the buyer's about whether the system was a factor in their buying decision. They confirmed it definitely was for them personally, and said they actually picked that property over a different one they were looking at specifically because of the solar and the fact that the electric utility would be writing them a check every month instead of billing them. 

I've heard from agents in other markets here on BP that solar does not provide added value for buyers in their markets, based on their experience. However in our market (again assuming Boulder although Utah is probably the same) I'd say a very high percentage of buyers view solar as a positive and understand that reduced operating expenses make a property more desirable. I've never heard of a buyer not viewing solar as a positive personally, other than a few cases of leased systems hanging up a sale. So in my experience, in our market, I'd say solar is definitely a selling point that adds value.

Aside from my personal anecdotes, The Appraisal Institute and Zillow have both conducted studies showing that solar does indeed add value to homes.

Perhaps the most comprehensive study was done by the Appraisal Institute and the Lawrence Berkeley National Laboratory (although it's a little bit dated now, having been most recently updated in 2015 I believe). They concluded that solar increases home values by $17k on average and that homes equipped with solar sell for 3.73% more than comparable non-solar properties: https://www.appraisalinstitute...

Zillow reported in 2019 that homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar. For the median-valued home, that translated to an additional $9,274 in 2019: https://www.zillow.com/researc...

 Happy to connect and discuss further, and help you look at your specific properties to see if solar would make sense or not. I'm no longer active in solar personally, other than continuing to install systems on most of my own properties, but many of my friends are still active in the industry and I keep my toe in the water for sure. It was interesting to see that the outgoing president just extended the 26% tax credit in the most recent stimulus package. I worked in solar full time for 15 years here in Boulder as well as for a few national companies before slowly transferring into real estate full time over the past several years.