San Diego Solar Homes Carry a Premium

There have been a number of studies recently to help consumers understand whether solar panels increase home values with the conclusion that solar homes carry a premium to non-solar homes and the premium is approximately equal to the net cost (after incentives) of the system.  The most recent study, Selling into the Sun conducted by the Berkeley Lab evaluated a data set of 3,951 homes spanning 12 years and 8 states.

Solar Home Paired Sales Analysis

A related study, Appraising in to the Sun conducted by the an appraiser group evaluated a smaller set of the transactions from Selling into the Sun and applied the paired sales analysis on 43 homes.  A paired sales analysis is a real estate methodology that basically looks at homes with similar characteristics that have sold recently.  The conclusions from the study were very similar to Selling into the Sun.

Sunvago’s San Diego Home Valuation Check

At Sunvago, we leverage public research studies, but also like to supplement with our own research – we want to “do our own homework” to ensure we get the right conclusions. To that end, we conducted an abbreviated paired sales analysis in San Diego.  San Diego is an optimal location for the study, as many of the other studies have focused on California markets and certain zip codes in San Diego have solar penetration rates of greater than 20% (also see solar penetration by state). We chose transactions in Chula Vista, an area in south San Diego that has high solar penetration and large housing developments that were built in the early 2000’s, so it is easier to find homes that have very similar characteristics.  We used permits from the city of Chula Vista and real estate transactions from Zillow.

Conclusions

Although our sample size was small (only 4 transactions), the homes we nearly identical and had been sold within the same year.  On average, we found that solar homes carried a $37,250 premium to non-solar homes or 6.7% of the the home value. If you remove the two outliers, the remaining two had a premium of $26,500. Assuming a 6 kilowatt system between $4.00 a watt and $5.00 a watt the gross cost of a system is between $24,000 and $30,000 or $17,000 and $21,000 after the 30% ITC credit. This gives us confidence that the market is valuing solar systems at or above their net cost.  For further information, please read our detailed analysis on how solar panels increase home values.

Address
Date SoldPriceSolar Premium $/%Sq. FtYear BuiltSolar Permit #Date InstalledZillow Listing
1101 Morgan Hill Dr
12/4/2015
$623,000$23,000 (3.8%)2,6012000
B13-214802/24/2014
Zillow Link
1153 Ferndale St
9/26/2016
$600,000
2,4472000Zillow Link
1520 Cordelia St
11/4/2015$540,000$30,000 (5.9%)1,9522000B14-022603/12/2014Zillow Link
1516 Cordelia St4/14/2016$510,000 1,9532000Zillow Link
1529 Hunters Glen Ave7/17/2015$506,000$6,000 (1.2%)2,2742005B14-26631/2/2015Zillow Link
1538 Hunters Pointe Ave3/14/2016$500,0002,2742005Zillow Link
1278 Blue Sage Way05/22/15
$650,000$90,000 (16.1%)2,9092005B14-257012/5/2014Zillow Link
1289 Blue Sage Way9/23/2015$560,0002,9232005Zillow Link

 

 

Casey is a Research Analyst at Sunvago and leads the company’s collection and analysis of residential solar data. Sunvago’s mission is to be the most consumer-centric source of independent information for homeowners interested in purchasing solar.

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(2) Comments

  1. John

    on   said 

    Any idea how the solar home sales prices compared to appraised value? I am simply wondering how much of the price differences between comparable sales might be related to other factors, for example a more modern or efficient HVAC configuration, more preferable architectural detail, etc.

    Reply
  2. OhmHome

    on   said 

    John, thank you for the question! Although we were not able to look at appraised values for the homes in San Diego, the research from Berkeley, Appraising into the Sun (http://bit.ly/2olugr2), was conducted by professional appraisers and resulted in similar value increases as market values. Fannie Mae has also provided guidelines that appraisals should reflect the value of solar systems (http://bit.ly/2oT2ODT). Here is our summary of the research (http://bit.ly/2olN37f).

    Reply

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