You have seen the advertisements all over town.
You know the ones where solar panel companies claim that adding panels increases your home’s value?
While this is true, somewhat, it is important to understand how the “value” factor works with eco-friendly upgrades.
It is all about balancing the return on your investment (ROI), as well as the desirability of solar panels on a home.
Also, it is important that you note you will never receive a 100 percent return on your solar panels; no matter what a company’s advertisement might tell you.
When Do Solar Panels Add Value?
Economists took solar panel data out in California to determine how much value these panels add to a home. California, however, is home to some of the costlier utility costs; therefore, there is a higher demand for sustainability.
In their report, Understanding the Solar Home Price Premium: Electricity Generation and ‘Green’ Social Status, they found that the average solar panel installation added over $20,000 to the home’s sale price.
However, they also noted that the average cost to install solar panels was over $35,000. After subsidies and tax incentives, the price lowers to about $20,000. So, in this instance, the panels truly paid for themselves.
Are Solar Panels Worth the Investment?
Solar panels come with a fee, but typically a homeowner will finance that purchase and pay the monthly finance fee instead of paying their local utility company. Most homeowners, according to The Boston Globe, report that their finance fee is similar to their utility bills prior to installation.
Once the financing is paid off, however, the homeowner no longer pays electricity bills to the city. Therefore, the savings start to accumulate.
This is where you would need to do some math – and the math depends on your home size and where in CO you live.
You would first need to look at how much you pay in utility costs each month. Then, contact a few companies who sell and install solar panels to receive quotes. Take the financing monthly payment estimate given to you, then compare it to your current electricity costs.
Also, how long will it take to pay off the panels?
If you can pay off the panels quickly (which is typically in five years), and the savings adds up quickly without utility bills in the future, then solar panels could be worth the investment.