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Home Appraisal Benefits of Solar Power

by Monica Dillon, studioD

What home buyers want most is energy efficiency, according to a 2012 National Association of Home Builders study. Homeowners who invest in energy efficiency and renewable energy stand to benefit in several ways including reduced energy bills and improved building efficiency. Reduced energy costs can factor greatly in the home buying process, so the importance of a knowledgeable green appraiser is critical if a seller wants to recoup his investment and the buyer wants an accurate picture of the green features of the home.

Green Building Appraisers

Appraisers trained in valuing green buildings undergo an approved course of study mandated by the Appraisal Institute including an introduction to green building technology and valuation standards for residential and commercial solar. The Appraisal Institute requires appraisers to use the Residential Green and Energy Efficient Addendum when performing a routine appraisal of homes equipped with energy efficient features or renewable energy technologies. Appraisers attach this form to the standard appraisal documents used in a conventional home appraisal. The form highlights the solar system's age, design, energy production, any remaining warranty and annual utility costs.

Changing Perceptions

Green appraisals give homeowners a standardized way to highlight the reduced cost of home ownership by presenting reduced energy costs during the appraisal process. Some home buyers will perceive value in a solar equipped home, while others may believe it is unnecessary, unaffordable or even unattractive. A trained appraiser can effectively evaluate the solar system's worth based on the potential utility cost savings and the system's remaining value. With an average life span and factory warranty of 25 to 30 years, a solar system continues to save the homeowner money even after it's paid off.


In general, appraisers seek to compare apples to apples. Finding comparable properties with similar features for each appraisal makes property valuation consistent and fair. In lieu of similar homes, appraisers must use industry standards to value home improvements that may be uncommon to a neighborhood. This includes solar installations. Standards for solar valuation are still evolving. Ultimately, there is no guarantee that a homeowner's solar panels will generate a substantial home value increase.

Increasing Values

Researchers at Lawrence Berkeley National Laboratory found a definite home value increase of homes in California with solar installations sold between 2000 and 2009. The study concluded that homes with solar panel installations did, in fact, see a premium sales price over homes without it. With a 3,000 watt system, the average size studied in the report, homes increased in value on average by approximately $17,000.

About the Author

Monica Dillon has more than 10 years experience in real estate sales, marketing, investing and appraising. She specializes in energy efficiency building practices and renewable energy. Dillon has been syndicated by the National Newspaper Publisher's Association. Her work has also appeared in the "Journal Of Progressive Human Services."

Photo Credits

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