A recent report by Lawrence Berkeley National Laboratory in the US quantifies the increase in property values for US homes fitted with rooftop PV systems.
The study found that the average market premium across the entire sample of homes was US$4 per watt installed. This equates to a PV premium of US$15,000 for an average PV system capacity of 3.6 kW – a total of close to AU$18,000 at the current exchange rate.
Estimated Premiums Based on an Average-Sized 3.6 kW System. (Image Credit: Lawrence Berkeley National Laboratory)
The study was based on a sample size of 22,822 property sales across the US between 2002 and 2013, 3,951 of which had rooftop PV systems. The study compared new and old homes across all states for systems within the first 10 years of installation. The study was also restricted to host-owned PV systems, omitting leased and commercially-operated PV systems for a later study.
The report concludes that:
- Home buyers are willing to pay more for a property with rooftop PV, regardless of location and home type;
- The premium for California – a PV-friendly state – is on average US$1.10 per watt greater than the rest of the sample;
- PV premiums are robust to housing market conditions;
- There is a relatively small but non-statistically significant difference between PV premiums for new and existing homes (averages of US$12,700 and US$16,000, respectively) which might suggest either home builder or buyer discounting of new home PV systems;
- A ‘green cachet’ might exist for PV homes in that buyers might be willing to pay a certain amount for having any size of PV system on their homes and then some increment more depending on the size of the system; and
- The market appears to depreciate PV systems at a rate exceeding the rate of PV efficiency losses and of straight-line depreciation over the asset’s design life.
There has yet to be a similar study conducted on our shores to reflect the Australian housing market. Regardless, Australian homeowners considering installing a PV system should be confident of receiving a PV premium for their system. The figures extracted for the US market of $4 per watt installed correlate closely to US install costs and, if extrapolated accordingly, solar premiums for Australian homes are likely in the region of $2 per watt installed depending on the type, age, condition and location of the specific system.
The study highlights the fact that PV systems are an asset and real income generators for their owners. There is real value in used PV systems, especially when the hard work has been done and they are already installed onsite.
Top Image Credit: Lawrence Berkeley National Laboratory
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