A new report out from Redfin and Sun Number found that in at least 10 large Midwestern cities solar adds more than enough value to homes to pay for itself in resale value. For instance, in Chicago the median sale price for a home with solar was $303,500 compared to a median sale price of $195,000 for a home without solar power in the city.
“Just because you don’t live in the sunniest region of the U.S. doesn’t mean you can’t benefit from solar power. There is actually a lot of solar potential in several areas of the U.S., including the Midwest,” wrote Redfin’s Alana Finn in a post about the report. “While the initial cost of solar panels can seem costly (ranging anywhere between $15,000 and $40,000), the panels will eventually pay for themselves over time since the use of solar energy can greatly reduce the cost of utility bills.”
Chicago was a standout in terms of overall added value, but even the lowest-ranked city on the list, Minneapolis/St. Paul, MN, saw added value from solar installations. The report said that the median sale price for a home with solar in the Tin Cities was $230,000 compared to the median sale price of $208,000 for a home without solar power in the cities.
While the most value was added to homes in Chicago—just over $100,000—it was second in the rankings with a SunNumber score of 80. Columbus, Ohio, was first with a SunNumber score of 82—the Twin Cities had a Sun Number score of 73.
Sun Number ranks cities on a scale of 1 to 100, with a higher number representing a better set of conditions for solar on homes. “Sun Number scores make it easy for homeowners and homebuyers to understand the solar potential of their current or future home, and Sun Number is committed to working with real estate companies like Redfin to make the scores widely available,” says Sun Number Co-Founder David Herrmann.
The other cities on the list, and their Sun Numbers were Cincinnati and Dayton, Ohio, as Madison, WI, with scores of 78; Milwaukee, WI and Indianapolis, IN, with scores of 77; Cleveland, Ohio, with a score of 76 and Detroit, with a score of 74.
To create the report, Sun Number looked at the 10 largest cities in the midwest and assigned it its Sun Number. Redfin looked at those areas to determine the median price of homes that mention solar panels in the listing. It compared that with the median price of homes that didn’t list solar panels. Redfin did a similar ranking for cities in the Northeast earlier this year.
While the strategy is reasonable it should be noted that only a small number of homes in each city actually have solar panels. As such the median value of homes with and without solar may not be reflective of the average cost of a home in one of the cities that were in the list.
Still, more and more evidence is showing that solar power increases the value of homes as solar panels are considered upgrades. The Department of Energy’s Lawrence Berkeley Lab, for instance, has found that homebuyers across the country are willing to pay a premium of about $15,000 for a home with an average-sized solar array. It also suggested that homes with solar panels sell faster than those without.Tweet