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Do Solar Panels Increase Home Value. House powered by solar

Do Solar Panels Increase Home Value. House powered by solar

    solar, panels, increase, home, value

    Do Solar Panels Increase Home Value?

    Affiliate Disclaimer: All products and services featured are independently selected by our editors. However, when you buy something through our retail links, we may earn an affiliate commission.

    Solar panels reduce your carbon footprint and increase your energy savings. but did you know they can also increase your home’s market value ? Our guide explains how, plus provides tips to maximize your added value with a quality system from a top solar company.

    Available in 50 states Has been in the industry since 1985 Provides its own monocrystalline solar panels

    Available in 23 states 25-year warranties for the product, labor, and inverter Power protection guarantee

    25-year workmanship and product warranty Perks for new construction homeowners Available in 20 states

    How Do Solar Panels Increase Home Value?

    Most homeowners know that solar panels reduce energy costs and carbon emissions. Those long-term savings help boost your home’s property value. According to the National Renewable Energy Laboratory ( NREL ), your home value increases by 20 for every 1 you save on energy bills. For example, if your solar energy system saves you 700 per year, the value of your home increases by 14,000. Real estate agents and home appraisers have found that this also increases your market value when selling your home. A 2021 Zillow housing trends report found that 67% of homebuyers considered energy efficiency to be a “very to extremely important” inclusion for a potential home. Homebuyers are willing to pay 15,000 or more for a solar powered-home. according to a large-scale solar home study conducted by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab). This push for energy-efficient homes translates to higher home sale for sellers. Prospective buyers will spend 4.1% more for a solar-powered home. or around 9,274. These boosted resale values are even higher in certain housing markets. In New York. for example, buyers will pay an additional 23,989 for a solar home versus comparable homes.

    Factors That Impact the Added Value of Solar Homes

    Installing a solar system doesn’t always guarantee increased home value. Several factors affect your property value. such as your location, electricity rates. and solar system. We’ll discuss these in more detail below.

    Local Electricity Rates

    Solar power is most impactful in areas with high electricity rates. where producing your own energy will lower your monthly electricity bills. The U.S. Energy Information Administration (EIA) found that the average residential utility bill is 117.46 per month. If your monthly electricity bill is significantly lower than this, you may not save money by switching to solar power. States such as California. Connecticut, Texas, and New York have higher-than-average electricity rates.

    Solar Market

    • California
    • Texas
    • Florida
    • North Carolina
    • Arizona
    • Nevada
    • Georgia
    • New Jersey
    • Virginia
    • Massachusetts

    Residents in states with little to no solar market growth might not benefit from the boosted market value of going solar.

    Solar Panel Ownership

    If you plan to sell your home after installing solar panels. it’s important to choose the right financing option. You must legally own your solar panel system to include it in your home sale. Ownership is also necessary to use available solar incentives and reduce your solar panel costs. Only homeowners who purchase their systems outright or take out a loan are the owners of their panels.

    Other financing options make solar home sales more complicated. If you choose a solar lease. your solar provider will remain the system’s legal owner. You must buy out the lease or transfer it to the new owner to sell your home. Depending on how much time is left in the lease, this may require a substantial payment. Afterward, the buyer can start a new lease with the solar company.

    You may also be able to transfer the lease to the new owner. allowing them to take over the remaining time on your contract. This doesn’t require a significant payment from either party, but the new homeowner must meet the qualifications to become the new lease owner, including a credit check. A lease transfer could slow down the selling process if you can’t find a buyer that meets the solar company ’s lease qualifications.

    Solar System Condition

    Homes with up-to-date solar systems have higher values than houses with aging systems. Solar systems typically last 25 to 35 years, so a home with a 15-year-old system can only provide another 10 to 20 years of service. Keep this in mind if you plan on selling a home with a solar system older than 10 years old.

    Homeowners should have their systems serviced and maintained to maximize their potential home sale. High-quality solar panels typically have longer warranties than inexpensive panels.

    Manufacturers’ warranties cover any defects or issues with the panels, while workmanship warranties cover installation errors. Use these warranties to make any necessary repairs and upgrades to keep your system in top condition. Additional coverage, such as a power production guarantee, protects your panels’ power output and production through the length of your warranty.

    If you’re considering buying a home with a solar panel system. review all of the system’s documentation, including maintenance records and warranty coverage. These details should also include any replacements or upgrades completed during ownership. If you plan on selling your solar-powered home. keep it in peak condition.

    How Do Solar Panels Influence My Property Tax?

    Installing a solar system increases your property value. so your property taxes will also increase. However, 36 states have laws that exempt solar owners from paying increased property taxes. These laws vary from state to state and differ in amount. While some states offer 100% exemption, others limit the exemption to a certain number of years. Check your local state legislature for exemption laws in your area.

    Maximizing Your Solar Panel Investment

    Choosing the best solar technology raises your property value and potential selling price. Consider investing in a high-quality system with maximally efficient solar panels. The following solar programs and upgrades can help decrease your up-front costs while bringing the highest return on investment.

    Solar Incentives, Credits, and Rebates

    Solar incentives on the federal, state, and local level can lower your system costs. For example, the federal solar tax credit provides a tax reduction equal to 30% of your installation costs. Check for state and local incentives in your area on the Database of State Incentives for Renewables and Efficiency (DSIRE). You may also find city- and utility-specific rebates.

    Net-Metering

    Most quality solar systems produce more energy than your home needs. Net- metering programs allow homeowners to sell this surplus energy back to the grid for credits on their utility bills or annual payouts. Net- metering programs vary throughout the country and may be enforced at the state level or by a specific utility company. Check the Database of State Incentives for Renewables Efficiency ( DSIRE ) for programs in your area.

    Solar Batteries

    If net- metering is unavailable in your location or you’d rather store excess energy for your own use, you can install a solar battery instead. You can use this energy during blackouts, low sunlight days, or at night. Homeowners looking to live off-grid without any ties to a utility company can use solar batteries to sustain their homes. If you choose to remain on the grid, solar batteries can offset periods of high electricity rates. increasing your energy savings.

    Our Recommendation

    Installing a solar panel system offers long-term clean energy and boosts your property value. How much your home value will increase depends on your location, local policies, and electricity rates. but most homeowners see a significant increase from going solar. Homeowners looking to sell a solar-powered home should keep the system up-to-date and in pristine condition. Home buyers interested in a solar home should ensure the system is in working condition and available for ownership transfer.

    If you’re considering adding a solar system to your home, we recommend getting quotes from at least three solar companies to find the best equipment and financing options.

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    Solar Energy

    The future of solar is bright in Georgia, and we are leading the way in making our state a national leader in solar energy. To help meet our customers’ growing electricity needs, we’re committed to using reliable, cost-effective and renewable energy sources that work best in our state.

    Solar Energy in Georgia

    The sun is one of the most valuable power sources available. Learn how Georgia is positioned for a renewable Solar Energy future.

    Residential Solar Solutions

    The potential for solar energy use in Georgia is dependent upon the amount of sun shining on the earth’s surface called solar insolation.

    Business Solar Solutions

    To help meet our customers’ growing electricity needs, Georgia Power is committed to using reliable, cost-effective, renewable energy sources that work best in our state.

    What solar solution is right for you?

    Use our solar adviser tool to explore considerations and estimated costs for a solar panel installation on your home. Get real life figures to help you determine the best solar program for you and your goals.

    Two ways to get solar energy

    Solar Electric Power

    In this approach, electricity is converted directly from solar energy through solar cells known as photovoltaic cells – photo for light and voltaic for energy.

    Normally mounted on the roof or in a location with maximum sun exposure, the photovoltaic (PV) array components convert energy from the sun into electric current to power appliances and other household devices.

    A PV system requires little maintenance and can produce power for more than 20 years.

    Solar Thermal Energy

    Heating water using electricity can make up 14-25% of the average home’s utility bill. A residential solar water heating system can be designed to meet between 50 and 80% of a home’s water heating requirements.

    solar, panels, increase, home, value

    A solar water heating system requires collectors to absorb the sun’s energy and a storage system to hold the energy until it is needed. The systems used to store thermal energy are similar to conventional water heaters. The heated water is circulated through the home or building using pumps.

    Georgia’s Solar Potential

    The potential for solar energy use in Georgia is dependent upon the amount of sun shining on the earth’s surface called solar insolation. Several factors such as weather patterns, humidity and haze can affect local insolation levels.

    As can be seen on this solar map, insolation values in Georgia are significant enough to support solar energy systems in our state, with the southern two-thirds of Georgia having solar insolation values equivalent to most of the state of Florida.

    Determining how many solar panels can power a house doesn’t have to be complicated. From watts to kilowatts and more, these tips will help you figure out how many solar panels are required in a solar system for home use.

    By Melissa Graham | Updated Jan 26, 2023 4:28 PM

    We may earn revenue from the products available on this page and participate in affiliate programs.

    Q: I’m interested in installing a solar panel system for my home, but I don’t know much about solar panels. How effective are they? How many solar panels power a house?

    A: There are plenty of incentives and benefits for switching from a traditional utility system to a solar-powered one. There are rebates and tax credits, but also the knowledge that you’re helping improve the environment. If you’re wondering, “How many solar panels do I need?” a few essential elements will answer the question. The tips below will help walk you through calculating how many solar panels you need and what factors will affect that number. While calculating these numbers yourself can give you an idea of what kind of solar array you’ll need, know that a qualified solar panel installer will do all of these calculations for you if you proceed with installing solar panels.

    You’ll need to know three things: your annual energy usage, the solar panel wattage, and the production ratio.

    ”How much solar do I need?” is an expected question from a homeowner new to solar systems. To figure out exactly how many panels are required to run a home, you will need to consider your annual energy usage, the solar panel wattage, and the production ratio. These three factors are essential when converting to a solar system. While this calculation will give you a ballpark estimate, consider that other factors will affect the actual number of panels, which will be touched on later.

    If you’re looking to install a designated solar heating system—one where solar panels heat liquid or air and convert it into central heating for a home—you’ll also need an experienced HVAC installer who can convert your existing central heating system to a solar heating one.

    Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

    Look at your utility bill to determine how many watts you use.

    Energy usage is measured in kilowatt-hours (kWh). KWh does not mean the number of kilowatts you use in an hour, but rather the amount of energy you would use keeping a 1,000-watt appliance running for 1 hour. The number of appliances that use power and how often they’re running will affect the usage. Anything plugged into a wall will count toward your energy usage, and bigger appliances like refrigerators and dishwashers use more power than a phone charger. For example, a 50-inch LED television uses around 0.016 kWh per hour, whereas an electric dishwasher will use about 2 kWh per load.

    As of 2019, the average American household uses 10,649 kWh of electricity per year, according to the U.S. Energy Information Administration. But the best way to determine how much power you’ll need is by looking at your utility bills from the past year. This will give you a solid idea of your real-life energy needs, especially as power usage fluctuates throughout the year. The amount of energy you use will dictate the size of the system you need.

    While installing solar panels can often reduce or even completely offset your monthly electric bill, remember that electric rates and usage are volatile factors. If the price of electricity or the amount you use drastically changes, your savings could change as well. For example, central to southern California is considered a great place to install solar panels because of the frequent sun—but it also is a state that regularly sees higher electricity prices.

    Once you know your home’s energy demands, it’s time to start looking at panels. Look at different panels and see what the wattages are. The solar panel wattage is also known as the power rating, and it’s a panel’s electrical output under ideal conditions. This is measured in watts (W). A panel will usually produce between 250 and 400 watts of power. For the equation later on, assume an average of 320 W per panel.

    Use your annual energy consumption and solar panel rating to calculate the production ratio.

    You can calculate the production ratio when you have the numbers for your annual energy usage and the solar panel wattage. The production ratio is a system’s estimated energy output over time (measured in kWh) compared to the actual system size (measured in W). To calculate the production ratio, divide the energy output by the system’s total wattage. In the U.S., production ratios tend to fall between 1.3 and 1.6.

    Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

    Once you have these three numbers, it’s time to calculate the number of panels. The formula is:

    Number of panels = system size / production ratio / panel wattage

    For example, using 10,649 kWh (the average energy usage of an American household), 1.3 (the low end of common production ratios), and 320 W (the average wattage of a solar panel):

    Number of panels = 10,649 kWh / 1.3 / 320 W = 25.6

    From this calculation, you can estimate that a house with these power requirements would need about 25 panels that produce 320 W.

    Take the amount of sun your home receives into consideration.

    Remember that this calculation assumes that the panels are running under optimum conditions. direct sunlight means your home can convert more energy into electricity. In states like Arizona and New Mexico, which are known to produce more sunlight than states in the Northeast, homeowners will likely need fewer solar panels. Nevada, Utah, California, Texas, and Colorado are other locations that usually produce more sunlight. But even if you live in a region or state with long winters or one that’s outside of the Sun Belt, you may need to purchase more solar panels to effectively run the home.

    The size, shape, and material of your roof will also affect the best placement of solar panels. The ideal roof has no shade coverage from trees and large amounts of space facing south, west, or east—these are the directions that receive the most sunlight throughout the day in the northern hemisphere. Roofs with steep pitches make installing solar panels more difficult and can mean that an installer may not be able to fit as many panels on the roof. The same goes for oddly shaped roofs.

    The number of solar panels you need will also depend on if your home will be on-grid or off-grid.

    Often the more popular option, on-grid solar panel systems are connected to the public utility grid. If there isn’t enough sun to provide full power, the house can pull energy from the traditional grid, so it doesn’t have to go without electricity. On the other hand, an off-grid system is not connected to the public grid and is more common in rural or remote locations.

    Off-grid systems rely on batteries to store power to keep the house running at night or on cloudy days. Off-grid systems will likely need more panels to run the house and store up excess energy. On-grid or off-grid systems can affect the overall cost of your solar power system.

    Figuring out how much solar battery capacity you need is a task unto itself. Not enough capacity and you’ll run out of power in the middle of the night, but too much and you’ll add unnecessary complexity and maintenance costs. The number of batteries you need will also depend on the type of battery you choose. Lead acid batteries are more cost-effective, but lithium-ion batteries have better capacity, efficiency, and lifespan.

    Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

    The type of solar panel will affect its efficiency.

    There are three types of solar panels available: monocrystalline, polycrystalline, and thin film. Monocrystalline and polycrystalline panels are both composed of cells made out of silicon. The silicon pieces are assembled to form a rectangle and covered with a glass sheet. Monocrystalline solar cells are cut from a single silicon crystal, while polycrystalline cells are composed of fragments of silicon crystals. This difference in construction affects the efficiency and price. Monocrystalline panels are more efficient and perform better, but they’re also more expensive. Polycrystalline solar panel are more affordable, but you’ll compromise a bit on efficiency and performance.

    There are also thin-film solar panels. Like the name suggests, the cells are thinner than monocrystalline or polycrystalline. However, the actual panel itself may not be significantly thinner than other styles of panels. Thin-film panels are more portable and flexible than either monocrystalline or polycrystalline, but they’re less efficient. Different panels will have different pros and cons depending on your home, geographic location, and more, and your solar installer will be able to give you advice on what’s best suited for you.

    While this guide can give you general information about the number of panels, solar panel sizes, and types of systems you might consider, remember that a qualified solar power installer will be able to give you more information that’s specific to your home. Many variables play into how efficient solar systems are, and it can be difficult to take all of those into consideration when you’re not experienced.

    The Dark Side of Solar Power

    Solar energy is a rapidly growing market, which should be good news for the environment. Unfortunately there’s a catch. The replacement rate of solar panels is faster than expected and given the current very high recycling costs, there’s a real danger that all used panels will go straight to landfill (along with equally hard-to-recycle wind turbines). Regulators and industry players need to start improving the economics and scale of recycling capabilities before the avalanche of solar panels hits.

    It’s sunny times for solar power. In the U.S., home installations of solar panels have fully rebounded from the Covid slump, with analysts predicting more than 19 gigawatts of total capacity installed, compared to 13 gigawatts at the close of 2019. Over the next 10 years, that number may quadruple, according to industry research data. And that’s not even taking into consideration the further impact of possible new regulations and incentives launched by the green-friendly Biden administration.

    Solar’s pandemic-proof performance is due in large part to the Solar Investment Tax Credit, which defrays 26% of solar-related expenses for all residential and commercial customers (just down from 30% during 2006–2019). After 2023, the tax credit will step down to a permanent 10% for commercial installers and will disappear entirely for home buyers. Therefore, sales of solar will probably burn even hotter in the coming months, as buyers race to cash in while they still can.

    Tax subsidies are not the only reason for the solar explosion. The conversion efficiency of panels has improved by as much as 0.5% each year for the last 10 years, even as production costs (and thus prices) have sharply declined, thanks to several waves of manufacturing innovation mostly driven by industry-dominant Chinese panel producers. For the end consumer, this amounts to far lower up-front costs per kilowatt of energy generated.

    This is all great news, not just for the industry but also for anyone who acknowledges the need to transition from fossil fuels to renewable energy for the sake of our planet’s future. But there’s a massive caveat that very few are talking about.

    Panels, Panels Everywhere

    Economic incentives are rapidly aligning to encourage customers to trade their existing panels for newer, cheaper, more efficient models. In an industry where circularity solutions such as recycling remain woefully inadequate, the sheer volume of discarded panels will soon pose a risk of existentially damaging proportions.

    To be sure, this is not the story one gets from official industry and government sources. The International Renewable Energy Agency (IRENA)’s official projections assert that “large amounts of annual waste are anticipated by the early 2030s” and could total 78 million tonnes by the year 2050. That’s a staggering amount, undoubtedly. But with so many years to prepare, it describes a billion-dollar opportunity for recapture of valuable materials rather than a dire threat. The threat is hidden by the fact that IRENA’s predictions are premised upon customers keeping their panels in place for the entirety of their 30-year life cycle. They do not account for the possibility of widespread early replacement.

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    Our research does. Using real U.S. data, we modeled the incentives affecting consumers’ decisions whether to replace under various scenarios. We surmised that three variables were particularly salient in determining replacement decisions: installation price, compensation rate (i.e., the going rate for solar energy sold to the grid), and module efficiency. If the cost of trading up is low enough, and the efficiency and compensation rate are high enough, we posit that rational consumers will make the switch, regardless of whether their existing panels have lived out a full 30 years.

    As an example, consider a hypothetical consumer (call her “Ms. Brown”) living in California who installed solar panels on her home in 2011. Theoretically, she could keep the panels in place for 30 years, i.e., until 2041. At the time of installation, the total cost was 40,800, 30% of which was tax deductible thanks to the Solar Investment Tax Credit. In 2011, Ms. Brown could expect to generate 12,000 kilowatts of energy through her solar panels, or roughly 2,100 worth of electricity. In each following year, the efficiency of her panel decreases by approximately one percent due to module degradation.

    Now imagine that in the year 2026, halfway through the life cycle of her equipment, Ms. Brown starts to look at her solar options again. She’s heard the latest generation of panels are cheaper and more efficient — and when she does her homework, she finds that that is very much the case. Going by actual current projections, the Ms. Brown of 2026 will find that costs associated with buying and installing solar panels have fallen by 70% from where they were in 2011. over, the new-generation panels will yield 2,800 in annual revenue, 700 more than her existing setup when it was new. All told, upgrading her panels now rather than waiting another 15 years will increase the net present value (NPV) of her solar rig by more than 3,000 in 2011 dollars. If Ms. Brown is a rational actor, she will opt for early replacement. And if she were especially shrewd in money matters, she would have come to that decision even sooner — our calculations for the Ms. Brown scenario show the replacement NPV overtaking that of panel retention starting in 2021.

    See more HBR charts in Data Visuals

    If early replacements occur as predicted by our statistical model, they can produce 50 times more waste in just four years than IRENA anticipates. That figure translates to around 315,000 metric tonnes of waste, based on an estimate of 90 tonnes per MW weight-to-power ratio.

    Alarming as they are, these stats may not do full justice to the crisis, as our analysis is restricted to residential installations. With commercial and industrial panels added to the picture, the scale of replacements could be much, much larger.

    The High Cost of Solar Trash

    The industry’s current circular capacity is woefully unprepared for the deluge of waste that is likely to come. The financial incentive to invest in recycling has never been very strong in solar. While panels contain small amounts of valuable materials such as silver, they are mostly made of glass, an extremely low-value material. The long life span of solar panels also serves to disincentivize innovation in this area.

    As a result, solar’s production boom has left its recycling infrastructure in the dust. To give you some indication, First Solar is the sole U.S. panel manufacturer we know of with an up-and-running recycling initiative, which only applies to the company’s own products at a global capacity of two million panels per year. With the current capacity, it costs an estimated 20–30 to recycle one panel. Sending that same panel to a landfill would cost a mere 1–2.

    The direct cost of recycling is only part of the end-of-life burden, however. Panels are delicate, bulky pieces of equipment usually installed on rooftops in the residential context. Specialized labor is required to detach and remove them, lest they shatter to smithereens before they make it onto the truck. In addition, some governments may classify solar panels as hazardous waste, due to the small amounts of heavy metals (cadmium, lead, etc.) they contain. This classification carries with it a string of expensive restrictions — hazardous waste can only be transported at designated times and via select routes, etc.

    The totality of these unforeseen costs could crush industry competitiveness. If we plot future installations according to a logistic growth curve capped at 700 GW by 2050 (NREL’s estimated ceiling for the U.S. residential market) alongside the early-replacement curve, we see the volume of waste surpassing that of new installations by the year 2031. By 2035, discarded panels would outweigh new units sold by 2.56 times. In turn, this would catapult the LCOE (levelized cost of energy, a measure of the overall cost of an energy-producing asset over its lifetime) to four times the current projection. The economics of solar — so bright-seeming from the vantage point of 2021 — would darken quickly as the industry sinks under the weight of its own trash.

    Who Pays the Bill?

    It will almost certainly fall to regulators to decide who will bear the cleanup costs. As waste from the first wave of early replacements piles up in the next few years, the U.S. government — starting with the states, but surely escalating to the federal level — will introduce solar panel recycling legislation. Conceivably, future regulations in the U.S. will follow the model of the European Union’s WEEE Directive, a legal framework for the recycling and disposal of electronic waste throughout EU member states. The U.S. states that have enacted electronics-recycling legislation have mostly cleaved to the WEEE model. (The Directive was amended in 2014 to include solar panels.) In the EU, recycling responsibilities for past (historic) waste have been apportioned to manufacturers based on current market share.

    A first step to forestalling disaster may be for solar panel producers to start lobbying for similar legislation in the United States immediately, instead of waiting for solar panels to start clogging landfills. In our experience drafting and implementing the revision of the original WEEE Directive in the late 2000s, we found one of the biggest challenges in those early years was assigning responsibility for the vast amount of accumulated waste generated by companies no longer in the electronics business (so-called orphan waste).

    In the case of solar, the problem is made even thornier by new rules out of Beijing that shave subsidies for solar panel producers while increasing mandatory competitive bidding for new solar projects. In an industry dominated by Chinese players, this ramps up the uncertainty factor. With reduced support from the central government, it’s possible that some Chinese producers may fall out of the market. One of the reasons to push legislation now rather than later is to ensure that the responsibility for recycling the imminent first wave of waste is shared fairly by makers of the equipment concerned. If legislation comes too late, the remaining players may be forced to deal with the expensive mess that erstwhile Chinese producers left behind.

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