Residential photovoltaic (PV) installations are considered a major home upgrade. Households that invest in solar can instantly save money by reducing utility costs. Eventually, homeowners will save enough money where it covers the cost of the solar installation. This is referred to as the return of investment, or ROI. We will look at the expected ROI for solar systems installed in 2021. Not only do solar consumers save money, but their solar investment will increase the value of their homes. Their home appreciates just for having solar panels installed. We will also analyze the increased property value expected with installing a solar system in Florida.
The Average ROI
The exact price of a solar installation is not fixed. The price may fluctuate depending on the size, equipment, and layout of a home. However, based on the data, we can conclude that the average cost of a residential PV solar installation is between $16,000 and $21,000. This is significantly less than the average solar installation a decade ago. Ten years ago, the average was closer to $50,000. This cost reduction is because of the demand, new technology, and incentives such as the federal tax credit (ITC). Now, $20,000 is still a good chunk of change, but it’s genuinely a steal when looking at the return of investment. Solar has over a 100% return of investment. Depending on the source, you may see different averages for the ROI. However, the consensus is that you could expect to see a 100% ROI between five and ten years. Every year after that is simply free electricity.
Increase in Property Value
Not only do solar systems pay for themselves in a relatively short period, but they also increase the value of a home. Saving money is excellent! It’s even better to know that your property value is also appreciating. Homes that add solar systems boost their property value. According to CNBC’s Valentina Sanchez:
“Installing solar panels in a home not only helps to reduce current monthly utility bills; it can potentially increase the home’s value by up to 4.1% more than comparable homes with no solar panels, according to recent solar research done by Zillow — or an additional $9,274 for the median-valued home in the U.S.”
Some states have differing values. Florida mirrors the national average with a 4% increase in property value. Many states have passed a tax credit, exemption, or abatement to offset potential gains in property taxes. For example, Florida offers a 100% tax exemption that would cover the inevitable increase in property taxes caused by the new solar technology. States have been actively pushing and advocating for more programs and incentives. America is turning towards renewable energy, and States are doing what they can to entice potential customers.
Choose Solar, Choose Region Solar
Renewable energy is a crucial issue for many, including President-elect Biden. It has received bipartisan support across the board. The long term effects of renewable energy can help the environment, our wallets, and our future. Solar energy, specifically, has emerged as the leading renewable energy for residential households. It continues to become more cost-effective and environmentally beneficial. If you are interested in learning more about solar, check out our blog. If you live in or near Sarasota, you can get a free quote for solar installations here. RegionSolar has been serving Sarasota since 2007. We look forward to hearing from you.