Early 2011 has not been kind to the U.S. residential real estate market. The NY Times reiterated this week: Real Estate Remains in Distress as U.S. Home Prices Fall Again. Not good news if you’re hoping to sell.
Unless you’ve got solar on your roof or run an energy efficient home. Juxtaposing the grim news of home prices continuing to decline, Lawrence Berkeley National Laboratory released a report earlier this week using empirical market data that showed homeowners in California with solar systems on their roofs enjoyed a significant premium in home value. Quoting from the report:
The research finds strong evidence that homes with PV systems in California have sold for a premium over comparable homes without PV systems. More specifically, estimates for average PV premiums among a large number of different model specifications coalesced near $17,000 for a relatively new “average-sized” - based on the sample of homes studied - PV system of 3,100 watts (DC).
The study, titled, An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California, relied on common home valuation methodologies--”hedonic pricing” and “difference-in-difference”--that are common practice for real estate professionals to yield reliable and valid results.
The researchers said what is most likely in play here is a form of “cachet value,” whereby the easily distinguishable characteristic of solar on one’s roof and doing other home energy efficiency upgrades shows others that “this household is making a real commitment to being green and solving serious environmental problems.”
In an increasingly ecoconsious world, keeping up with the ‘Joneses’ is taking on a whole new meaning.
The question has now become, Can you afford not to go solar and make your home more efficient?