Solar Systems as an Investment

The demand for more efficient homes with renewable energy systems will likely remain a healthy trend further increasing the future value of your solar home.

A 1998 “Appraisal Journal (Cited by Wells Fargo) sited that for every $1,000 saved in annual utility expenditures a home’s value increases by $20,000. For every dollar saved in utility costs becomes available to be spent on a higher mortgage payment without a net increase in living expenses.

The table below from an American Solar Energy Society (ASES) study shows the approximate cost for a 100% energy consumption system in comparison to the increased appraisal value.  This example compares a home with utility bills averaging $190 per month, or a total of $2,280 in annual utility costs.

Solar Panel
System Size
Final Net Cost After
30% Solar Tax Credit *
Appraisal Equity
Increase @ 20:1
% Cost Recovered
2.6 kW $14,560 $17,600 121%
5.2 kW $29,120 $44,200 152%
7.8 kW $43,680 $72,600 166%

* Net cost calculated at rate of $8/W less 30% =$5.6/W installed


The economics of purchasing a solar electric system have radically changed in recent years.  The 15 year old article that this post was originally based on is just a benchmark in time.  The installed costs of $10/W were updated from the original article's installed cost down to $8/W several years ago, but now the cost of solar is under $5/watt for small residential systems and is under $4/w for mid-sized commercial projects, with large commercial/community/utility projects being delivered at or under $3/W.  At $10/W 15 years ago it was a good business practice to purchase solar systems, now that the installed cost is less than half this price. it’s a much better investment.

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