Solar at High Noon: Solar Home Premiums in a Rapidly Maturing Market
The residential solar market is growing rapidly, with increasing solar installations and solar home resales. In this paper, we explore how current premiums have changed over time, particularly in relation to changes in solar replacement costs and energy savings. We find clear evidence that solar systems are correlated with higher selling prices if those systems are owned by the homeowner. Alternatively, we find no value or slightly lower values associated with non-owned panels. Our estimates show premiums for homeowner-owned systems have dropped significantly over our study period in the four states we analyze, which is correlated with decreasing replacement costs for similarly sized systems and the overall maturation of the solar market. Notably, as energy costs increase, calculations of projected savings from solar panels now surpass our replacement cost and estimated value premium calculations. Finally, we find that appraisals are more regularly noting solar on homes today but rarely do they provide information on panel ownership structure.