If you live in Ontario, you’ve probably heard a lot about solar powered homes in these past couple of years. There have been many discussions, and even some controversy around these small, energy generating cells, and most people I speak to are still unsure whether or not they’re worth the investment.
I’m not going to get into the nitty gritty behind the ethics, practicality and efficiency of solar energy – I will leave that for someone more qualified in that background. What I really want to look into is whether or not solar energy has an affect on the market value of homes in Ontario. Will solar panels scare away buyers? Will it increase the value more than it costs to install?
How Much Do Solar Panels Cost?
According to Ontario-based solar experts Flanagan and Sun, the average Ontarian homeowner will spend between $25,000-$30,000 on equipping their home with solar panel system. The most common case for solar energy is that it over the system’s lifetime, you will have saved much more on energy costs than you will have spent on the initial installation and maintenance.
Selling Solar Energy
On top of saving in Hydro costs, by applying for Ontario’s solar feed-in tariff, or FIT program, homeowners with approved solar systems installed on their property can sell electricity and receive income based on a guaranteed price per kilowatt hour. Homeowners operating in ideal conditions can expect to earn approximately $3,100 per year, breaking even on their installation costs in around 9 years. (Full list of FIT pricing can be found herehttp://www.ieso.ca/sector-participants/feed-in-tariff-program/overview)
Solar Panels Increasing Your Home’s Value
But what about people who are thinking about selling their home? We know there is money to be made for long-term homeowners, but what if you don’t want to live in the same home for over 9 years?
A study by the Lawrence Berkeley National Laboratory has concluded that solar panels will increase a home’s value by $18,543 on average. This study was conducted in our neighbouring, coal-loving country, the United States of America, but the numbers are still relevant. Across 6 states, homebuyers were willing to pay up to almost $20,000 more for homes powered by solar energy – the similar lifestyles between our two countries show that there is at least a demand for solar powered homes.
Solar Systems HARMING Your Listing?
Unfortunately not everyone will be wanting a solar powered system – they may not be interested in forking out the additional $20,000 for a house with solar capabilities, or might not like the aesthetics of the prominent solar panels plastered throughout their property. This creates a more niche buyer looking for homes with solar energy systems, which could lead to a longer sale. The same study from Lawrence Berkeley had found that solar homes had actually spent an extra 8 days on the market before they sell on average. This extra time spent stagnant on the market can be critical when trying to sell a home for its maximum potential worth.
Is It Worth The Investment?
To conclude, it seems like with the current technology and costs involved with today’s solar energy, the investment is really in the long term. There is money to be made, but by installing a brand new solar system in your house as a last-ditch attempt to raise your home’s sale value, you may be wasting your money at best, and hurting your listing at worst!