When selling a property, we want to increase its value in order to obtain the maximum possible profitability.
As a general rule, this added value is achieved through factors that have a positive influence, such as renovations, the dimensions of the house, the facilities, the location of the property, among others.
However, the rules of the game have changed in recent years and new components have been added that also help to increase the value of our property. Such is the case of photovoltaic installations.
The installation of solar panels increases the value of a property while at the same time reducing your electricity bill.
Because not only does it have the great advantage of reducing the carbon footprint and providing us with significant energy savings every month, but it also increases the value of the property, becoming one more element to be valued by potential buyers.
In addition, the new regulatory framework provided from 2020 encourages the energy transition of homes towards the use of renewable energies. These new measures, together with the aid and subsidies granted by the State and the Autonomous Communities, have facilitated the investment of solar modules.
In this article you will discover:
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How much does a house with solar panels increase in value?
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What are the factors that influence the revaluation of a photovoltaic installation?
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Why it is profitable to install solar panels on your home
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The influence of a solar installation on the Spanish real estate sector
The impact of solar energy on increasing the value of a home
In countries such as the United States, studies have been carried out that confirm an increase in value of 3% to 4% in homes that have solar panels installed, and can even exceed these figures in certain circumstances.
In 2018, homes with a solar system sold for $9,274 more than homes without solar panels.
All this for one simple reason. More than 80% of buyers consider the energy efficiency factor of the property as another essential component in the purchase decision. Therefore, a new variable has entered the equation.
According to a report by the National Association of REALTORS® Research Group, 36% say that a home is more valuable when it has a photovoltaic installation, compared to 30% who do not consider it as an influential element. However, there is a curious fact in all this. 21% do not know if solar panels are a plus for the revaluation of the house.
In addition to the positive factor of increasing the value of the property, the sale process is quicker and this would tip the balance towards a property that has an installation as opposed to one that does not have that extra value. As data from Rocket Homes shows, homes that use solar energy for their consumption remain on the property market for almost 14% less time.
According to data compiled by the Office of Energy Efficiency and Renewable Energy (EERE), US buyers are willing to pay around $15,000 for a home with a mid-sized system as well as other important factors such as property renovation.
4 factors that influence the appreciation of the value of houses with solar panels
When we buy a house, in general, there are certain common factors that we look at and that influence the final price. For example, the size, the location, the infrastructure of the property or the maintenance of the house.
We can also include certain elements that are attractive to buyers and increase the value of the property in the same way. This is the case with the provision of a garden, a swimming pool or an installation with solar panels.
This component has arrived with force and is considered as an added extra to the valuation. Thanks to the positive perception generated in buyers who consider solar energy as another investment that will reduce the electricity bill by a significant amount.
However, not all homes with solar panels appreciate in value in the same way. Here we explain the factors that have an influence:
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Geographical location
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Cost of the installation
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Age of solar panels
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Owned or leased solar panels
Location
Does a photovoltaic system in Germany provide us with the same amount of energy as in Spain?
No, it doesn’t, does it? For one fundamental reason.
The amount of sunshine in each country differs greatly. Spain has an average of 2,500 – 2,600 hours a year, while Germany has an average of 1,700 hours a year. If you want to see how much sunlight each Spanish province receives, take a look at the Statistical Yearbook of Spain.
Provinces such as Girona or Lleida even reach or exceed 2,800 hours of sunshine per year.
Beyond these data, it is important to pay attention to the exact location of the property. That is to say, take into account the shadows caused by trees or buildings that hinder the maximum production of solar energy. This will affect the performance of the solar panels.
Cost of installation
Some people want to go solar for their home, but the installation costs of the system and the necessary requirements for the procedure worry them somewhat.
Therefore, when they are looking for a new house, they value the fact that all the equipment is already installed. It is a plus for them even if the value of the house is higher.
Think that if electricity costs have increased in a certain geographical area, as is the case in Spain, and sunlight has great potential ahead, a photovoltaic system will allow the new owner to increase the savings on electricity bills month by month. Up to 50% or more!
Age of the installation
How old is the system? 5, 10, 15?
Having an old installation will still increase the value of the house but at a lower rate.
You should consider the depreciation of the system, since if an installation is a considerable number of years old, the future owner will have to make repairs or replace elements to ensure that it functions correctly.
We come to a conclusion with all this: efficiency decreases with the passage of time. Therefore, the appreciation of the value of the house will decrease if our system is many years old.
Solar panels owned or rented?
When you decide to go solar in your home, you have two options to choose from: buying or renting solar panels.
As the owner of the installation, you only have to add the extra value provided by this element to the total price of the house. It is a simple transfer that costs little and will provide a good return.
Alternatively, there is the alternative of renting the system. In this case, the purchase process is somewhat more laborious at the time of selling the property because it is not a component of our property and it is up to the buyer to decide if he wants to take care of the transfer.
What happens in such situations? A transfer of the lease can be made if the buyer is interested in keeping the installation in order to enjoy greater energy and economic savings.
We are talking about the asset of a third owner and this requires the installation company to be present at the transfer, taking care of the necessary procedures to transfer the contract and services to the new tenants.
Although the purchase of solar panels is a simpler alternative to increase the value of the property, the rental option can also help to achieve this revaluation of the property by explaining to potential buyers how they will enjoy savings on electricity bills with a sustainable energy system thanks to solar energy.
If you would like to know more about renting solar panels, we recommend you read this article about our solar subscription model.
Is it profitable to install solar panels in your home?
The installation of solar panels has an important profitability that will be reflected when selling the house.
We start with the cost reduction in the price of photovoltaic equipment by up to 80%, favouring access to solar energy for a greater number of homeowners. At the same time, it reduces dependence on the electricity grid.
In any case, the purchase of a photovoltaic system allows you to enjoy the following benefits:
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The subsidies for solar panels with reductions in IBI and ICIO, as well as deductions in the personal income tax return (IRPF) and certain specific financial aid depending on the corresponding municipality.
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Aid for self-consumption from the European Next Generation funds, consisting of six programmes for both industrial and residential use.
On the other hand, as a property seller you can take advantage of the following benefits in the real estate sector:
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A higher selling price of the property that can exceed more than 4% of the current value.
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Buyers consider the solar panels as a further incentive for the property and even a possible cause for action.
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A full return on the investment in solar panels when selling the property.
Of course, as a homeowner, don’t forget that potential buyers can request documentation confirming the correct installation of the solar system by the installer, as well as showing invoices verifying the significant reduction in electricity costs.
With all the above advantages, we can say that installing solar panels is a cost-effective option at any time. When you are enjoying self-consumption on a daily basis, but also in the future if you want to sell your property.
The revaluation of a house with solar panels in Spain
In other markets, such as the American market, there is a higher value of housing for those homes that opt for solar energy, but what is happening in Spain, and are we following the same trend?
Spaniards value the energy efficiency of a house positively. If we look at the data, 6 out of 10 Spaniards believe that the use of an energy efficient system reduces gas bills while 7 out of 10 believe that it helps to reduce monthly electricity bills, according to a report by Fotocasa.
And 85% of homes could install solar panels on their roofs. If this were to happen, the energy savings achieved would cover the average annual consumption of more than 92 million homes.
With these percentages we can say that citizens value the savings of installing an efficient system in their homes, but they also consider that photovoltaic energy revalues a house to the point of having an impact of between 10% and 20% more than the initial value.
Increase the value of your home with SolarMente
Tax incentives, economic and energy savings in the long term are all advantages of investing in solar panels, which ultimately add value to the property.
Therefore, not only will it provide you with multiple benefits in your daily energy consumption, but it will also be a key factor for buyers purchasing a new property.
However, it is important to bear in mind the factors that influence the revaluation of an installation, such as the location, the age of the system and incentives determined by the geographical area, among others analysed. Paying special attention to these elements will allow you to get the most out of your home and maximise its value.
A tool that helps you discover how much you can save on your monthly electricity bill and have an energy-efficient home while significantly reducing your dependence on the conventional electricity grid.
Frequently asked questions
Do large installations increase the value of the house?
Solar energy increases the value of the house, but several studies have shown that the power of the installation does not increase the value of the house.
Therefore, it is not advisable to oversize a photovoltaic installation. It will mean a higher cost for you and it will not add more value at the time of selling the property. Invest in an installation that meets your energy needs.
Do houses with photovoltaic panels sell faster?
According to the US National Renewable Energy Laboratory, installing a solar system on our homes can lead to a faster sale, reducing their market exposure by up to 20% compared to homes without this advantage.
