Solar power is beneficial for the environment. It doesn’t cause greenhouse gases to be released into the atmosphere, and no compounds become airborne that can harm humans, animals, and plants. When homeowners install solar systems, economic considerations such as return on investment come into play, as photovoltaic (PV) systems can generate more power than is used. Another economic factor that has gotten much attention is the price of real estate and, at least in California, it has been found that homes with PV systems have sold at higher prices than properties without them. This appreciation in value has significant implications on the real-estate market as home buyers and sellers consider the differences in pricing.
Various models are used to price homes. This can get a little technical, but basically hedonic pricing models assess value according what each characteristic of the home adds to the overall cost, while difference-in-difference modeling is used for homes sold for a second time with a different feature than was present during the first sale. (For example, a PV system that was installed in between the first sale and the second one.) Using these models, real estate experts found that prices were higher in California for homes with photovoltaic arrays installed. However, average price premiums for new homes with PV systems were lower than for existing houses. This could be because of variations in the cost of installing solar power in new construction and existing structures. However, home builders may also play on buyer motivation by including PV panels in the package at a lower premium.
In Hawaii, residents have a number of strong incentives for installing and utilizing solar power. They can hedge against a rise in electricity costs, and also take advantage of the return on investment such systems provide over time. An ordinance issued by the city of Honolulu, Hawaii bans adding the value of a solar system to the cost of the home. Also, properties cannot be re-assessed once they are fit with solar power, meaning your property taxes won’t go up from the solar installation and because the provision extends for 25 years, won’t go up due to normal appreciation either, a considerable savings. This, along with the offset in electricity costs, combined with inflation, can amount to a consistent monthly savings of hundreds or more for high-value properties. Combine this with the tax credits (both state and federal) for photovoltaic arrays and solar begins to seem like a real no-brainer.
Home owners still have return on investment to consider, but save even further on property taxes without the PV system added to the property value. Savings accrued by the long term investment value are still in play, but the additional savings go beyond this as well. This is a big bonus to home owners in Hawaii, since significant incentives for using solar power already exist. It is also a huge step toward being self-sufficient, as importing power has been a huge burden on the state’s economy. Now home owners can not only break even, they can see real profit by going solar.