Berkeley Lab study finds that photovoltaic systems boost the sales price of California homes

Apr 21, 2011

New research by the U.S. Department of Energy's Lawrence Berkeley National Laboratory finds strong evidence that homes with solar photovoltaic (PV) systems sell for a premium over homes without solar systems.

"We find compelling evidence that solar PV systems in California have boosted home sales prices," says the lead author Ben Hoen, a researcher at Berkeley Lab. "These average sales price premiums appear to be comparable with the average investment that homeowners have made to install PV systems in California, and of course homeowners also benefit from energy bill savings after PV system installation and prior to home sale."

The research finds that homes with PV in California have sold for a premium, expressed in dollars per watt of installed PV, of approximately $3.90 to $6.40/watt. This corresponds to an average home sales price premium of approximately $17,000 for a relatively new 3,100 watt PV system (the average size of PV systems in the Berkeley Lab dataset), and compares to an average investment that homeowners have made to install PV systems in California of approximately $5/W over the 2001-2009 period.

"This is a sizeable effect," says Ryan Wiser, a Berkeley Lab scientist and co-author. "This research might influence the decisions of homeowners considering installing a PV system and of home buyers considering buying a home with PV already installed. Even new home builders that are contemplating PV as a component of their homes can benefit from this research."

Approximately 2,100 (MW) of grid-connected solar PV have been installed in the U.S. California has been and continues to be the country's largest market for PV, with nearly 1,000 MW of installed capacity. California is also approaching 100,000 individual PV systems installed, more than 90% of which are residential. Though an increasing number of homes with PV systems have sold, relatively little research has been performed to estimate the impacts of those PV systems on home sales prices.

The Berkeley Lab research is the first to empirically explore the existence and magnitude of residential PV sales price impacts across a large number of homes and over a wide geographic area. The research analyzed a dataset of more than 72,000 California homes that sold from 2000 through mid-2009, approximately 2,000 of which had a PV system at the time of sale. "This is the most comprehensive and data-rich analysis to date of the potential influence of PV systems on home sales prices," says co-author and San Diego State University Economics Department Chair Mark Thayer.

The research controlled for a large number of factors that might influence results, such as housing market fluctuations, neighborhood effects, the age of the home, and the size of the home and the parcel on which it was located. The resulting premiums associated with PV systems were consistent across a large number of model specifications and robustness tests.

The research also shows that, as PV systems age, the premium enjoyed at the time of home sale decreases. Additionally, existing homes with PV systems are found to have commanded a larger sales price premium than new homes with similarly sized PV systems.

"One reason for the disparity between existing and new homes with PV might be that new home builders also gain value from PV as a market differentiator that speeds the home sales process, a factor not analyzed in the Berkeley Lab study," says Berkeley Lab researcher and co-author Peter Cappers. "More research is warranted to better understand these and related impacts."

Explore further: Panasonic, Tesla to build big US battery plant

More information: The report, "An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California," can be downloaded from eetd.lbl.gov/ea/emp/reports/lbnl-4476e.pdf
A 2-page summary of the report's key findings can be found at: eetd.lbl.gov/ea/emp/reports/lbnl-4476e-rs.pdf

Related Stories

More efficient devices on solar cells due to energy matching

Dec 07, 2006

Many wireless devices currently work on solar energy (photovoltaic = PV). Often the choice for PV cells seems merely to be based on the green image. Yet this technology can be used far more effectively if the elements from ...

Study finds cloudy outlook for solar panels

Feb 21, 2008

Despite increasing popular support for solar photovoltaic panels in the United States, their costs far outweigh the benefits, according to a new analysis by Severin Borenstein, a professor at the University of California, ...

Engineers find new way of utilizing solar farms at night

Aug 17, 2010

(PhysOrg.com) -- New technology from The University of Western Ontario utilizing photovoltaic (PV) solar farms at night will help in connecting more renewable energy sources like wind turbines to Ontario's grid, increasing ...

Recommended for you

Many tongues, one voice, one common ambition

20 hours ago

There is much need to develop energy efficient solutions for residential buildings in Europe. The EU-funded project, MeeFS, due to be completed by the end of 2015, is developing an innovative multifunctional and energy efficient ...

Panasonic, Tesla to build big US battery plant

21 hours ago

(AP)—American electric car maker Tesla Motors Inc. is teaming up with Japanese electronics company Panasonic Corp. to build a battery manufacturing plant in the U.S. expected to create 6,500 jobs.

Simulation models optimize water power

22 hours ago

The Columbia River basin in the Pacific Northwest offers great potential for water power; hydroelectric power stations there generate over 20 000 megawatts already. Now a simulation model will help optimize the operation ...

Charging electric cars efficiently inductive

22 hours ago

We already charge our toothbrushes and cellphones using contactless technology. Researchers have developed a particularly efficient and cost-effective method that means electric cars could soon follow suit.

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

Vendicar_Decarian
not rated yet Apr 21, 2011
I admire Calofornia. It is a shane that state Republicans have managed to manufacture such a fiscal crisis for their own constituents.

"We need to manufacture a 'fiscal' crisis in order to assure that there is no alternative to a smaller government" - Bush - Imprimus Magazine - 1995
AlexCoe
1 / 5 (6) Apr 25, 2011
Since the Democrats have controlled CA for a very long time, I fail to see how your statement that Republicans have ruined the state financially is valid. I can't remember when the R's controlled the state govt. and I have lived here for nearly all my 54 years. I'm sure there had to be sometime but I can't remember it. RHINO's have been complicit in the increases in govt size, no doubt about it, and I'm not happy with them either.