Will solar panels increase the value of my house?
Real estate agents and shelter mags are full of advice about how much particular improvements will increase the value of your house. (I forget -- is a new bathroom the best investment?) You rarely recoup 100 percent of a capital improvement; the idea is that you get more of it back for certain projects than for others.
Anyway, researchers at UCLA and UC San Diego have tried to figure out the formula for solar panels. How much does going solar increase the value or your house? Is it as much as you spent for the system? Among their findings:
We find that solar panels add 3.6% to the sales price of a home after controlling for observable characteristics and flexible neighborhood price trends (see Table 4). This corresponds to a predicted $22,554 increase in price for the average sale with solar panels installed.
If you live in a neighborhood full of tree huggers and Prius drivers, the propensity to pay extra for installed solar is slightly greater, as you might expect. People in neighborhoods with Ford F-series pickups in the driveway, on the other hand, are not so inclined.
We estimate the solar premium to be 1% higher if other homes in the same census block have previously installed panels, but the coefficient is not statistically different from zero. We observe a decreasing return to additional system size, a positive relationship between the capitalization rate and Prius penetration, Green party registration share, Democrat registration share, median income, and education, as well as a negative relationship between capitalization and truck ownership.