A question that has frequently come up in our discussions with people interested in installing solar goes something like this: “How will the solar installation really affect my home value?”

Well, in probably the most comprehensive study to date, it has been shown that the addition of solar panels gives a significant boost to your home value. A study by Lawrence Berkeley National Laboratory shows one can expect to command a premium equal to about the net cost (total cost minus incentives) of the solar installation itself. This means you can expect to get the value out of a solar addition that is roughly equal to the net cost you sunk into your installation.

Geek out with me for a minute.

In solar terms, we characterize costs and benefits as a $/W (or kW) value. So for an average sized system of 3.8 kW, you can expect an average increase in home value — or premium — of about $3.78 per W totaling a $14,000 increase in home value!

But enough of numbers and calculation.

What does having solar on your roof actually mean for your home?

So if you are a home owner, you probably think of doing some improvements every once in a while, say putting in that new bathroom? And you have thought about how that might affect your home value, surely. With a bathroom or many other significant upgrades, you may not get that $20,000, $30,000 or $40,000 you sunk into the project out in your home value.

But, if you are looking into putting up a solar power system on your roof, it has been shown that your home value actually goes up by the net cost you put into the system — again, net is the total installed cost minus incentives. So if you paid $20,000 towards your rooftop solar and got back around $6,000 in rebates and incentives, you will get an increase of around $14,000 in your home value.

And on top of the increase in home value, you still save a lot on your energy bills — so there is a great return on this investment, along with “being green” bragging rights!

The fine print: This analysis only holds true for solar systems that are purchased through an upfront payment or a loan, and not for leased systems.