Skip to main content

Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes

Share
Executive Summary:
 
Capturing the value that solar photovoltaic (PV) systems may add to home sales transactions is increasingly important. Our study enhances the PV-home-valuation literature by more than doubling the number of PV home sales analyzed (22,822 homes in total, 3,951 of which are PV) and examining transactions in eight states that span the years 2002–2013. We find that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system. Only a small and non-statistically significant difference exists between PV premiums for new and existing homes, though some evidence exists of new home PV system discounting. A PV green cachet might exist, i.e., home buyers might pay a certain amount for any size of PV system and some increment more depending on system size. The market appears to depreciate the value of PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses and the rate of straightline depreciation over the asset’s useful life. Net cost estimates—which account for government and utility PV incentives—may be the best proxy for market premiums, but income-based estimates may perform equally well if they accurately account for the complicated retail rate structures that exist in some states. Although this study focuses only on host-owned PV systems, future analysis should focus on homes with third-party-owned PV systems.
Resource Type

Browse Resources by Related Topics:

Related Resources

Monday, Mar 20, 2023

The 25D Solar Tax Credit: What Homeowners Need to Know

The Section 25D residential tax credit may be claimed by individuals who purchase a solar energy system or a standalone energy storage system for their home. SEIA put together this summary to help residential customers understand the basics of Section 25D tax credits.

Read More
Thursday, Mar 09, 2023

Solar Market Insight Report 2022 Year in Review

The quarterly SEIA/Wood Mackenzie Power & Renewables U.S. Solar Market Insight report shows the major trends in the U.S. solar industry. Learn more about the U.S. Solar Market Insight Report. Released March 9, 2023.

Read More
Wednesday, Mar 08, 2023

American Solar & Storage Manufacturing Renaissance: Managing the Transition Away from China

The United States is undergoing a transformational buildout of domestic solar and storage manufacturing. Like other industries, the U.S. can and is breaking free from an overreliance on imports while building a resilient and equitable U.S. solar and storage manufacturing base.

Read More