Researchers led by the Lawrence Berkeley Laboratory say that home purchasers are willing to pay more for a house that come with a photovoltaic (PV) system.
In what was billed as the most comprehensive study to date, the report, Selling Into the Sun, found that buyers would pay an average of $4 per installed watt, or $15,000, for an average-sized system of about 3.6 kilowatts in capacity.
There have been similar studies in the past, and the earlier studies found similar results. A report released in December 2013 on California sales, for example, covered nearly a decade of sales in California and said each kilowatt of capacity added nearly $6,000 in value.
But this study covered more ground. A team that included the Berkeley Lab, the Sandia National Laboratories, universities, and appraisers studied sales of 22,000 houses in eight states between 1999 and 2013. Of those, nearly 4,000 had PV systems.
Researchers also found only a small difference between premiums buyers would pay for new PV-equipped houses and existing houses with PV.
“Previous studies on PV home premiums have been limited in size and scope,” lead author Ben Hoen said in a report on the study posted at Phys.org. “We more than doubled the number of PV home sales analyzed, examined a number of states outside of California, and captured the market during the recent housing boom, bust and recovery.”
Green features can befuddle appraisers
The study comes at a time when the real estate industry is trying to come to grips with the added complexity of putting value on houses with renewable energy systems and other green features.
As of the second quarter of last year, PV systems had been installed on more than a half-million homes in the U.S., 42,000 systems in the second quarter of the year alone, the report’s introduction says. As the number of PV-equipped homes rises, so does the number of real estate transactions involving them.
“Because of this,” the report continues, “the real estate sales and valuation communities have been working to enable a better understanding of the valuation of PV systems and green features more generally.”
The Appraisal Institute and the National Association of Realtors offer courses on marketing and estimating value for PV and green features, and a number of organizations have developed tools to help. Even so, the report says, little research has been done to document the premiums these homes command, and appraisers in the field may see houses with PV systems rarely if at all.
“In most local markets, few PV home sales occur, thus appraisers and other real estate professionals… often cannot compare similar PV and non-PV home sales to derive a PV premium,” the report says.
Co-author Sandra Adomatis, an appraiser who helped the Appraisal Institute develop its “Green Addendum,” said the study should give the industry greater confidence in quantifying the value of PV, but the authors say more research is needed, including a look at how leased systems affect home values.