Updated: Mar 14
In the last decade, hundreds of thousands of solar panels have popped up across the country as an increasing number of Americans choose to power their homes with the sun’s energy. As the solar industry continues to expand, home builders are becoming increasingly aware of the vast benefits that come with it. Never before, has adopting solar energy been a pivotal step in home construction. In this article, we have outlined the unique incentives and benefits to be gained by home builders and developers alike.
1. Homes Equipped with a Solar Power System Have Added Value.
Research has found that homes that are solar ready, have increased value AND sell faster.
In 2011, the United States Department of Energy launched the SunShot Initiative. Its goal was to “reduce the total costs of solar energy by 75 percent, making it cost competitive at large scale with other forms of energy without subsidies” by 2020. The SunShot Initiative partners with Lawrence Berkley National Laboratory to fund a research study titled “Appraising into the Sun: Six-State Solar Home Paired-Sale Analysis.” The study examined 600,000 homes with solar panels (a “photovoltaic” Solar PV system). It employed seven licensed appraisers that cross-referenced data from the MLS.
· On Average, a Solar Panel System adds $15,000 to a home’s appraisal value.
· Homes equipped with a solar panel system sell up to 2x faster.
2. Installation Costs for Solar Energy Are at Historical Lows.
The Solar Energy Industries Association (SEIA) tracks trends and trajectories in the solar industry that demonstrate the diverse and sustained growth of solar across the country. Their latest report titled “Growth in Solar is led by Falling Prices” notes:
“The cost to install solar has dropped by more than 70% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. Prices as of Q4 2018 are at their lowest historical level across all market segments. An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $18,000 today, while recent utility-scale prices range from $28/MWh - $45/MWh, competitive with all other forms of generation.”
Simply put, with energy costs rising with increased market volatility, the value of solar energy will continue to increase.
3. Home Builders Adopting Solar Energy Respond to Consumer Demand.
The solar energy industry is booming. The Solar Energy Industries Association (SEIA) notes:
· There are currently more than 1.5 million residential solar systems in the U.S.
· Every 90 seconds, a new customer is going solar somewhere in the U.S.
In 2019, consumers are increasingly looking to the sun for energy production. Consumers are becoming increasingly aware and demanding alternative energy that is both fiscally and environmentally responsible.
4. The Residential Market is Conforming to Solar Energy.
The Solar Energy Industries Association (SEIA) issued a report titled “Guide to Valuing Residential Solar Energy Systems.” The report was developed for homeowners, real estate brokers, mortgage brokers, and other stakeholders in the residential housing market across the country, to understand the value of a solar system on a residential property. The report provides valuable resources for stakeholders to incorporate the emerging trends in the solar energy industry into their business practices.
This integration supports properties currently powered by solar energy and provides industry support for new solar installations.
5. Lucrative Incentives for Solar Energy are Expiring Soon.
Federal and State Incentives can offset the cost of installing a solar panel system. This benefits the home builder. A solar panel system can eliminate a monthly utility bill. This benefits the homeowner.
Federal Incentives available for Residential Solar Energy include:
· Investment Tax Credit (ITC) Or, The Solar Tax Credit provides a tax deduction equal to 30% of the cost of the solar panel system (less any cash rebates). Time is limited for this benefit, as it is projected to end in 2022.
State Incentives available for Residential Solar Energy include:
· Solar Renewable Energy Certificates (SRECs) In some States, State legislation requires Utility Companies to generate a percentage of their electricity from solar power. SRECs can be purchased by such Utility Companies so that they can comply with state-issued legislation. Selling SRECs can result in an additional source of income for homeowners in eligible markets.
State-Specific Solar Incentive Programs include:
· New Jersey: NJ Clean Energy Residential New Construction Program—Incentive rebates that range up to $24,250 for the construction of new homes that meet high energy-efficiency standards.
· Delaware: Delmarva Power Green Energy Program Incentives—Incentive grant of $0.50 per watt up to 50 kW, with a limit of $3,000 total.
Want to learn more about solar energy for residential property development? Contact us today for a complimentary consultation!
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