In December 2018, Australia reached a milestone when over 2 million households had installed rooftop solar.
There’s no denying that solar panels are popular, or that they save you money on your electricity bills. But what about the future? Does solar add value to your property?
You could be wondering about this for a few reasons. Maybe you’re thinking of selling your home in the future – either to upgrade or downsize. Or perhaps you’re considering renting your house out at some stage – maybe while you take time out to do a ‘Big Lap’ of Australia or head off on an extended overseas adventure?
Whatever your future plans, you want to know whether installing solar panels or a solar battery will increase your property’s value? In other words, is solar a good long-term investment for you?
The short answer is “Yes!” But don’t take our word for it. Let’s delve into exactly how installing solar panels can increase your home’s value.
How does solar work?
Before we talk about how solar panels can affect property value, it can help to understand exactly how solar systems work.
Solar is an efficient, environmentally-conscious way of generating power for your home. In a very small nutshell, they work by collecting energy from the sun’s rays and turning it into usable electricity. To do that, each solar system needs a few parts:
- Solar panels: your solar panels are made up of photovoltaic (PV) cells, which collect light energy from the sun and turn it into Direct Current (DC) electricity. The number of panels you install is one piece in the puzzle of how much electricity you generate.
- Inverter: your inverter then turns the DC electricity into Alternating Current (AC) electricity so you can use it in your home.
- Battery (optional): If you generate more power than you need on some days, you can either feed the excess straight back into the electricity grid, or save it to use later in a solar battery. That means you can still use your own electricity on cloudy days, at night, or on days when you need more electricity than normal.
For a more detailed breakdown of exactly how solar power works, check out our previous article on the topic.
Does solar increase my home’s value?
Put simply… yes!
But, of course, there are a number of factors that go into it. Read on to find out more.
Whenever you spend money on your house, there’s generally one question in the back of your mind. “Will this actually add value to my property or not?”
And especially with an investment like solar, you don’t want to rush into any decision without first checking that it makes genuine financial sense. If you know you’ll be staying put for a while, you might want to get a sense of how long it will take to pay off your initial investment.
But if you’re looking at selling your home or renting it out sometime soon, you probably want to know whether solar panels will increase your property value NOW.
Public opinion says it definitely does.
A 2018 OriginEnergy survey found that 77% of those surveyed thought a house with solar panels was worth more than one without. In particular:
- Over half said they’d pay up to $10,000 more for a house with solar.
- That figure rose to 60% if the system also had a solar battery.
- Renters were also willing to pay extra for a house with solar – after all, it would save them a significant amount on their power bill.
In fact, every single homeowner or renter uses electricity – so a solar system that reduces their power bill has to be a selling point (unlike that giant mural of Elvis you commissioned for your living room wall – but we won’t judge!)
But can you calculate exactly ‘how’ much value solar will add to your property?
Factors that affect the ‘value add’ you’ll get from solar
You’ll need to consider a few factors to calculate the value that solar will add to your property.
1. How old is the system?
A solar system that’s still under warranty will be worth more than one that isn’t. Solar panel efficiency is also rising each year, so a newer, higher quality system will be worth more than an older one.
2. What size system will you install?
For solar systems, size matters. And generally, the bigger the system, the higher the value. Smaller systems simply aren’t as big a drawcard, since they’re unlikely to reduce power bills by as much.
Also, a system that the buyer can potentially expand is usually more appealing than one that’s at capacity.
3. What quality of system will you install?
Not all solar systems are created equal. Premium systems usually have a better warranty and work more efficiently for longer than cheaper systems. Choosing a higher quality system now means it’ll be more of a selling point later.
4. Does it have a battery?
The last decade has seen a big uptake in rooftop solar. Clean Energy Council Chief Executive Kane Thornton said that, in 2018, an average of six panels per minute were installed in Australia. And that only included small-scale rooftop solar systems.
Of course, if everyone’s doing something, it automatically becomes less of a selling point. So if you’re thinking about adding value to your home, consider standing out from the crowd with a solar battery.
Beyond solar adding value to your property, what if it could help you reduce your mortgage too?
Building a new home and keen to meet a minimum 7-star energy rating? You could enjoy a 0.4% discount in the interest you pay on your home loan for up to five years – all thanks to the Bank of Australia’s Clean Energy Home Loan.
For borrowers who can commit to investing in energy efficiency measures on their new homes, the discounted interest rate could equate to up to $30,000 reduction in the cost of your home loan. That financial benefit would be on top of the significant savings you’d also enjoy from the energy efficiency measures you put in place.
Solar: a clean, efficient way to power your home
So now you know how efficient solar panels are.
However, identifying the most efficient solar system for your circumstances involves doing your research. You need to choose a system that suits your location and meets your power needs, both now and in the future.
If you’re not sure of where to start, get in touch with our experts today. We’ll give you a fast, custom proposal based on your individual circumstances, property type and efficiency objectives.
Solar adds value to your home
So there you have it. Adding the right sized, high quality solar system – ideally with a battery – WILL add value to your property. The only question is ‘how much’?
Identifying the best solar system for your circumstances involves doing your research. You need to choose a system that suits your needs now and adds value to your home in future.
If you’re not sure where to start, get in touch with our experts today.