Do Solar Panels Increase Home Value?
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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.
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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.
- North Carolina
- New Jersey
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.
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.
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.
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.
How Does Solar Power Work on a House? Your Questions Answered
How does solar power work? A simple explanation is that solar panels convert sunlight into electricity that can be used immediately or stored in batteries.
The sun essentially provides an endless supply of energy. In fact, with the amount of sunlight that hits the earth in 90 minutes, we could supply the entire world with electricity for a year — all we have to do is catch it!
That’s where solar panels come in.
How solar panels power a home
Solar power has many applications, from powering calculators to cars to entire communities. It even powers space stations like the Webb Space Telescope.
But most people are concerned about how solar panels can power their house and reduce their electricity bill.
Here’s a step-by-step overview of how home solar power works:
- When sunlight hits a solar panel, an electric charge is created through the photovoltaic effect or PV effect (more on that below)
- The solar panel feeds this electric charge into inverters, which change it from direct current (DC) into alternate current (AC) electricity
- The AC electricity runs through your electrical panel and is distributed throughout your home — just like grid energy
- Excess solar energy is stored in batteries or pushed onto the grid to power local systems (like your neighbor’s house!)
- Through net metering, solar owners get credit for the excess energy they put on the grid to offset the grid energy they pull off the grid when their panels aren’t producing
- With battery storage, solar owners can store excess production to power their homes at night
Now that we’ve covered the basics, let’s break down how solar panels work in more detail.
How does solar power work? The photovoltaic effect explained
Solar panels turn sunlight into elctricity through the photovoltaic (PV) effect, which is why they’re often referred to as PV panels.
The photovoltaic effect occurs when photons from the sun’s rays hit the semiconductive material (typically silicon) in the cell of the solar module. The photons activate electrons, causing them to free themselves from the semiconductive material.
Photons hit the solar panel causing electrons to be freed during the photovoltaic effect.
The free electrons flow through the solar cells, down wires along the edge of the panel, and into a junction box as direct current (DC).
This current travels from the solar panel to an inverter, where it is changed into alternative current (AC) that can be used to power homes and buildings.
How is solar energy used to power your home?
Most home solar systems are “grid-tied” meaning that the solar system, home electrical system, and local utility grid are all interconnected, typically through the main electrical service panel.
Connecting these systems means you can power your home with solar electricity during the day and grid electricity at night. It also means your solar system can push excess electricity onto the local grid to power surrounding systems, like your neighbor’s house.
Through net metering, you earn credit for excess solar production that can be used to offset the grid electricity you use at night.
Home solar with battery storage
Home solar with battery storage works similarly to the process above, but intsead of pushing excess solar production onto the grid, it’s first stored in batteries in your home or garage.
Pairing solar and battery is especially handy for:
- Off-grid solar systems
- Backup electricity during power outages
- Areas without net metering policies
- Powering your home on 100% clean and renewable energy
What types of material are used in solar panels?
The most common residential solar panels contain monocrystalline or polycrystalline (also called multicrystalline) solar cells.
Both types of cells produce electricity when exposed to sunlight, however there are some key differences between the two:
|Monocrystalline solar cells
|Polycristalline solar cells
|Tend to appear darker in color, often black or dark grey
|Often appear a dark blue when exposed to light
|Performs better in high temperatures and shady conditions
|Less efficient at higher temperatures
|Tend to be more expensive
|Tend to be less expensive
If space is limited on your roof or project site, a higher-efficiency, monocrystalline panel may be preferred, and could result in a better return on investment. Alternatively, a lower-cost, slightly less efficient, polycrystalline panel may do the job just as well if you have ample roof space on your home.
Many panel manufacturers also build panels containing both mono and polycrystalline wafers to form solar cells, capable of harvesting energy from a wider spectrum of light.
Be sure to ask what type of cell (“mono or poly”) your home solar system design contains, This distinction may affect the aesthetics and economics of your project.
How does sun exposure affect solar panel efficiency?
It is important that your solar panels receive good insolation (sun exposure) throughout the day and are free from as much shading from trees or neighboring obstructions as possible.
There are a number of factors that influence solar panel efficiency. They include:
- Temperature — Solar panels operate best in temperatures between 59 and 95 degrees Fahrenheit
- Type of solar panel — Solar panels typically range from 15-20% efficient, with the best panels pushing 23%.
- Shading — Solar panels perform best in wide-open sun. Even partial shading can substantially reduce the efficiency of a panel
- Orientation and angle — Solar panels perform best when they are directly facing the sun and are often tilted to increase efficiency
Solar engineers use satellite imagery to determine which panels and placement will provide optimum solar panel efficiency for you home.
How does solar power work FAQs
How does home solar power work?
Solar power works by converting sunlight into electricity through the photovoltaic (PV) effect. The PV effect is when photons from the sun’s rays knock electrons from their atomic orbit and channel them into an electrical current.
Using PV solar panels, sunlight can be used to power everything from calculators to homes to space stations.
How does solar power work at night?
Solar panels require sunlight to generate electricity, so they do not generate electricity during the day.
However, home solar systems typically generate excess electricity during the day, which can be stored in batteries or sent to the local grid in exchange for net metering credits. This is how solar owners maintain power when the sun isn’t shining.
Do solar panels work on cloudy days?
Yes, solar panels still generate electricity on cloudy days, although not as effectively as sunny days. Solar panels can capture both direct and indirect light (light that shines through clouds), but perform at around 10-25% of their normal efficiency when it’s cloudy.
Cloudy days can be beneficial, however, as rain washes the panels and increases their overall efficiency.
What Are Solar Panels Made Of?
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Do Solar Panels Work At Night?
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How Much Energy Does a Solar Panel Produce?
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Monocrystalline Solar Panels vs Polycrystalline Solar Panels
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How Do Solar Panels Produce Electricity?
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Portable Solar Energy Systems for Home on the Go
Solar panels aren’t just found on rooftops and solar farms anymore — there are now numerous portable solar modules on the market for camping, RVs, and emergency preparedness. You can buy solar chargers with a small solar panel and battery to charge devices, larger DIY kits that can power an RV, and solar generators for backup power during outages.
Portable solar systems are ideal when it is difficult or impossible to access the power grid. They can fulfill a similar purpose to a backup generator, but without consuming fossil fuels or making noise. Let’s examine the different categories of portable solar systems and how they compare to rooftop arrays.
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Types of Portable Solar Systems
You have several different kinds of portable solar systems to choose from; each serves a different purpose.
Solar-Powered Portable Battery Charger
These units contain solar cells and a battery. They often have a flashlight and perhaps a compass and can also charge using a power cable. There are USB ports on these solar chargers for powering cell phones and other electronic devices. Some solar power banks are capable of just charging a cell phone a couple of times and start at around 30, while others have a larger capacity and are more costly.
Portable Solar Panel Kits
These setups contain one or more portable solar panels, a battery bank, and a charge controller that regulates how the batteries charge. In addition, many portable solar panels include a kickstand or frame to prop up the PV panel at an ideal angle. Typically, the solar panels have high-efficiency monocrystalline solar cells to generate more electricity in a limited space when compared to polycrystalline solar panels.
Like fossil fuel-powered generators, solar panel generators supply emergency power during grid outages. In recent years, many different models have hit the market, giving shoppers more options for having some power during blackouts. Sometimes, solar generators are sold in kits that include the solar panels, and other times the panels are sold separately.
It’s a good idea to figure out what loads you will want to power so you can size the solar generator accordingly. For example, you might want to be able to plug in the refrigerator sometimes to prevent food from spoiling. Unfortunately, the batteries start to degrade a bit over time and cannot hold as much of their original capacity, so plan accordingly. Some solar generators are relatively light, making them more portable.
Here’s a helpful video guide to help you find the right solar-powered generator for you.
Advantages of Portable Solar Systems
Let’s explore the positive aspects of solar panels for mobile applications.
Smaller Upfront Cost
Numerous DIY solar kits and camping solar panels are available on the market. Although they range in price from under 30 to thousands, they usually cost significantly less than a rooftop solar system. Therefore, it’s an excellent way for people to start using solar energy without investing 15,000 or more for solar panels, an inverter, and labor. In addition, because the solar panels aren’t attached to the roof or connected to the electric panel, you will not need professional solar installers.
In some cases, financing is available through the retailer. This helps make these products available to more people, including people that don’t own their homes, but there are likely interest charges.
Portable Solar Power
These solar products often contain batteries that can charge with solar or sometimes a wall outlet as well. This means you would have electricity while on a boat, camping trip, or even during power outages. Portable solar products are also excellent for disaster preparedness because they do not rely on the electrical grid.
In other cases, grid power is available but might be very expensive. For example, some campgrounds charge a lot for electricity, and RVers might be able to save money by using a portable solar setup instead, or they might have greater flexibility on where to park if they don’t need to be parked near electrical outlets.
Disadvantages of Portable Solar Systems
Although they are great for power on the go, these systems do not provide all the benefits of a rooftop solar system.
Solar System Durability
Rooftop solar systems are designed to last 25 or more years, and they commonly include long-lasting warranties. The solar panels usually have frames and a mounting system that securely attaches them to the roof. By contrast, portable solar panels are commonly propped up using a kickstand and are often water resistant but can run into problems in heavy rains. Likewise, because they aren’t attached, heavy winds can damage the system.
Because they are less durable, portable solar modules usually have shorter warranties than roof-mounted solar systems. For example, the Bluetti PV350 Solar Panel includes a 2-year warranty, but the Renogy 100W Foldable Solar Suitcase with Voyager has a 10-year warranty.
May Not Qualify for Solar Tax Credit
There is a federal solar tax credit available for residential and commercial solar energy systems. However, portable solar systems qualify for the solar tax credit only occasionally. So, if you have an RV that is a primary or secondary residence and purchase a portable solar system for it, there’s a good chance you can apply the tax credit.
Even though there are many portable solar power options available, they might not be the ideal approach for everyone, and they serve a different purpose than a home solar panel system. A rooftop solar system or community solar subscription is a better option if you want to lower your home electric bill significantly. If you want emergency power or solar electricity on the go, a portable system is ideal.
Before purchasing a system, consider your energy needs and the pros and cons of each option. Figure out what electric loads you will have and make sure the solar battery can power them for the desired length of time. If you will use the portable solar system for camping or hiking trips, make sure it is light enough to be convenient.
Feature image: MarekPhotoDesign.com – stock.adobe.com. This article was originally published on August 25, 2022.
By Sarah Lozanova
Sarah Lozanova is an environmental journalist and copywriter and has worked as a consultant to help large corporations become more sustainable. She is the author of Humane Home: Easy Steps for Sustainable Green Living, and her renewable energy experience includes residential and commercial solar energy installations. She teaches green business classes to graduate students at Unity College and holds an MBA in sustainable management from the Presidio Graduate School.
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