About a month ago I conducted an informal lunch and learn at a local real estate office in one of the most highly valued real estate markets in the country. (Bon Jovi lives there)
I arrived early, with a fantastic animated presentation to talk about tax credits, SRECs. electricity production and all things solar. The real estate team had many questions:
- How much do solar panels cost?
- Do solar panels really work?
- What are SRECs and how do I explain them to my clients?
But the biggest question was "do solar panels make a home more valuable?"
According to the University of California's Report "Selling into the Sun" the answer is, YES!
Why do solar panels make a home more valuable? Take a lesson from the commercial property crowd.
I'll cover some commercial real estate info in another post, and stick with residential methodologies.
The fact is, people buy residential homes because:
- They like the house
- They like the community
- Quality of school system
So in general the value of the property is a function of market forces, supply and demand, as well as monetary policy (interest rates and affordability)
Where real estate professionals can really earn their keep is to highlight not only the quality of the construction, upgrades, and low property taxes, but the actual cost of maintaining a home. Many new families who have moved from apartments or townhomes to single-family residences are astounded by how much heating and cooling, as well as electrical costs. Many are resigned to accept that costs go up over time and there is nothing to do about it. Other's are savvy and realize that sustainability can come from both behavioral changes, and technology.
Core Benefits of Solar Panels
In New Jersey solar panel systems provide three core benefits:
- Current reduction or elimination of an electric bill.
- Current income in the form of Solar Renewable Energy Certificates
- Protection against future increases in electricity.
Imagine that your monthly mortgage payment is $1700. But, your solar system kicks off enough electricity to eliminate a $200/month electric bill. Now, your actual monthly nut is $1500 (thats almost 12% less month)
Now on top of that you get SREC income...lets call that $200/month. The $1500 now becomes $1300 a total reduction in your monthly expenditures of almost 25%. This is significant.
But don't stop there, home ownership costs can come in many form to bite you. Heating and Cooling represent a massive drain on resources, both in fuel costs and losses.
These secondary monthly costs can also be diminished through
- More efficient furnace's and boilers
- Insulation upgrades (particularly in the attic)
- Finding air leaks through a blower door test.
We encourage all homeowners to educate themselves of local and state programs that provide monetary incentives and support to these technologies. For New Jersey see the Office of Clean Energy here.
In 2016 energy independence, sustainability, and resource management is a real talking point that is entering the conversation. I hope that the available resources for accounting, financial, and property professionals continues to expand so we have an informed populace.