Do Solar Roof Panels add Value to a Home?
Harnessing Energy from the Sun
Did you know that the Orlando area receives 5.5-5.0 KW of natural sun light? Instead of having a roof reflect the sunlight to keep your home cool, solar panels harness the suns energy through Photovoltaic (PV) systems. These solar roof panels convert direct sunlight to energy for your home. Your home can use this energy, store this energy, or sell this energy back to the electric company.
Cost of Solar
Solar panels can be an expensive purchase of $20,000-30,000 depending on the size, roof configuration, type and condition. Solar panels are decreasing in price and have decreased by 60% since the last decade.
Before you consider adding solar panels, you need to figure out your break-even point.
Additional costs to consider are the access charges to connect to the electric company and possibly even a separate electric meter if you are selling your energy back to the electric company. It might not make sense to get this new system if you are going to sell your home in 5 to 10 years. Most break-even points are around 20 years. Analyze the solar calculations for your particular home with your home address on Google’s Sun Roof project.
Compared to electric costs up north, Florida’s electric costs are more affordable. For example, my Duke energy bill charges $.0763 KW, where Massachusetts charges 3X that rate. Consequently, solar is not very popular in Florida compared to other regions in the U.S.
What is the demand for Solar Roof Panels?
Solar panels have been slow to take off because the cost of energy in Florida is inexpensive. Only 1.54% of Florida energy comes from solar. That is a low number considering Florida is the “Sunshine State.” Despite these figures, demand is growing slowly. Just this year, two of my former buyers were considering adding solar roof panels to their home.
Florida overall ranks #5 in the U.S. for solar.
During the last 12 months in Seminole and Orange County, only 150 homes out of over 5,000+ homes sold have solar which is roughly less than 3%. Studies show that buyers will pay more for a home that has energy-efficient features. Out of these 150 homes, most of them sold for 99% of list price. It is evident efficient homes are getting top dollar for their homes. In addition, according to a California study these homes sell 20% faster.
Solar Roof Incentives
To help fuel demand, there is a Federal tax credit of 30% until the end of 2019. Then the tax credit decrease by 3% each year up to the expiration of 2022. So in 2020, the tax credit will be 26%, then 22% then 10%.
There are other incentives being offered through the State, County, City level, and your electric company. In addition, you can consult online resources such as Database of State Incentives for Renewable’ s and Efficiency.
How to Buy a Solar Roof
You can purchase or lease the solar roof. There will be pros and cons to buy vs. lease along with costs and maintenance. The types of leases are a solar lease, solar power purchase agreement, and prepaid lease.
In addition to buying or leasing, these solar roofs or other energy-efficient features can be financed or refinanced for new or existing homes.
— Fannie Mae and Freddie Mac financing: Home Style Energy allows 15% of the appraised amount to be financed for energy upgrades.
— VA: Energy Efficient Mortgage allows up to $3000, or up to $6000, or $6000+ depending on the documented monthly savings. The total loan amount with improvement costs cannot exceed the VA loan limit.
— FHA: Energy Efficient Mortgage, Energy Improvement Mortgage, 203K, 203K Streamlined are all available. The main difference between these types of FHA loans is that the first two deal with energy-efficient upgrades and the last deals with adding energy-efficient upgrades plus home improvement too.
— PACE Program: This is a national initiative to provide financing for energy-efficient improvements. The principal and interest for energy improvement is added to the owner’s tax payment and repaid over 20 years. Sellers are required to disclose to buyers if they participate in the PACE program. The is a specific Florida addendum for this disclosure.
Value to a home
Heating and cooling costs are the biggest concern when evaluating a home and studies show that buyers are willing to pay a premium for energy-saving features.
A study from Lawrence Berkeley National Lab (LBL) shows some key items about value. For areas outside of California, each watt of solar provides about $3 in value. So if you have a 5KW or 5,000-watt system that is an added $15,000 value. With the Federal Tax Credits, that brings the cost of the system close to the value it brings. They conclude that you should not be concerned about a payback period and solar systems are a sound investment.
Zillow conducted its own solar analysis across the U.S. and found that solar boosted home values in Orlando by 4.6% or $10,994.
Searching for Energy Efficient Orlando Homes
Searching for energy-efficient homes on the resale market is not so easy. Our MLS offers a lot of categories for adding energy-efficient fields and certification. These fields can be confusing and not well known so they usually are not completed to the extent they could be. So filtering down on specific energy-efficient features needs improvement.
The easiest way to identify communities with energy efficiency is to consider new construction. Many builders offer certifications such as HERS or Energy Star rating. So you know the home is already built with efficiency in mind. Regardless of the certifications, the building code requires them to be more energy-efficient anyway.
Some common energy-efficient items seen in new construction homes:
- Double Pane Windows
- 14-16 SEER HVAC System
- R38 Roof Insulation, Radiant Barrier Roof, or Spray Foam in Roof
- Hybrid or Tankless Water Heater
- Low flow toilets and plumbing fixtures
- Energy Star Appliances
- LED lighting
- Low VOC paint and products
- Optional Solar Roof Panels and Spray foam in concrete walls
Buyers Broker of Florida can help you find an energy-efficient homes. Contact Us at 407-539-1053
New Type of Solar Roofs
Tesla announced in the last two weeks they are beginning to sell the third revision of new and improved Solar Roof Tiles. These titles come in different shapes Tuscan, Slate, Textured, and Smooth. No gaudier thick roof panels. These titles resemble a normal-looking uniform roof. These tiles come in active and non-active for solar, to offer just enough solar power that you need. These solar tiles will be more costly than regular solar panels. Tesla is offering a 25-year warranty, but it is too early to tell if the upfront cost and longevity of this type of system will be worth the cost.
Each year demand will increase as costs come down and acceptance goes up with consumers, local governments, utility companies. Building toward “Green” with energy-efficient homes is the wave of the future. Buyers Broker of Florida has represented Florida home buyers for over 25+ years. Contact us if you need assisting in purchasing a home 407-539-1053.
Related: Orlando Solar Power Communities
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