Green Homes: Solar Panels Push Price Tag Up
By Suzanne De Vita
Homebuyers are paying a premium for solar, on average 4.1 percent above asking price, according to findings recently released by Zillow. While The Golden and Sunshine States command costly mark-ups, New York City has the highest percentage premium, at 5.1 percent.
New York, N.Y. – 5.1 percent ($23,989)
Orlando, Fla. – 4.6 percent ($10,994)
San Francisco, Calif. – 4.4 percent ($41,658)
Los Angeles, Calif. – 3.6 percent ($23,295)
Riverside, Calif. – 2.7 percent ($9,926)
Recently, Zillow partnered with Sun Number, which estimates a home's potential to be powered by solar, and projected savings. More than 84 million listings have a Sun Number on Zillow. The Sun Number factors in the pitch of the roof, surrounding trees, weather, and more, to assign a listing a 0-100 score. The higher the number, the better the home's potential for solar.
The median national Sun Number is 78, and the highest are in sun-washed states—with exceptions:
Las Vegas, Nev. (93)
Phoenix, Ariz., and San Jose, Calif. (90)
Los Angeles-Long Beach-Anaheim, Calif., and Denver, Colo. (89)
Dallas-Fort Worth and San Antonio, Texas; and San Francisco, Calif. (87)
Pittsburgh, Pa. (85)
Tampa, Fla., and Virginia Beach, Va. (84)
New York, N.Y. (83)
Washington, D.C., Miami-Fort Lauderdale, Fla., and Columbus, Ohio (82)
St. Louis, Mo., and Sacramento, Calif. (81)
Riverside and San Diego, Calif. (80)
Eighty-eight percent of buyers believe energy-efficient features are important, according to Zillow's 2018 Consumer Housing Trends Report, with the cost countered by the long-term potential for savings.
"Energy conservation isn't only good for the environment; it can also translate into big savings on electricity bills as well as help to reduce the strain on the electrical grid," says Sarah Mikhitarian, senior economist at Zillow. "The Sun Number provides a starting point for potential energy savings, but speaking with a local expert can help homeowners decide whether it pencils out. Homes with solar-energy systems often sell for more than comparable homes without solar power. This premium is largely reflective of the future energy cost savings associated with system."
Much has been reported about solar panels and their effect on home value. Eighty percent of REALTORS® report that there are homes in their market powered by solar, and California has mandated that homes be integrated with solar power, beginning with builds in 2020.
Additionally, homes with solar tend to have other energy-efficient features that often raise their value, which could contribute to an overall premium.