Buying a solar photovoltaic energy system is an investment in the future. Although buying a solar photovoltaic energy system may require an upfront payment, it can deliver significant energy cost savings for years to come. In addition, while most homeowners know that solar panels reduce energy costs and carbon emissions. Those long-term savings help boost your home’s property value. In fact, according to the National Renewable Energy Laboratory (NREL), your home value increases by $20 for every $1 you save on energy bills. For example, if your solar energy system saves you $700 per year, the value of your home increases by $14,000.
Real estate agents and home appraisers have found that this also increases your market value when selling your home. A 2021 Zillow housing trends report found that 67% of homebuyers considered energy efficiency to be a “very to extremely important” inclusion for a potential home. Homebuyers are willing to pay $15,000 or more for a solar powered-home, according to a large-scale solar home study conducted by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab).
This push for energy-efficient homes translates to higher home sale prices for sellers. Prospective buyers will spend 4.1% more for a solar-powered home, or around $9,274. These boosted resale values are even higher in certain housing markets. In New York, for example, buyers will pay an additional $23,989 for a solar home versus comparable homes.
In addition to increasing the value of the home, there are a couple of good solar incentives available to Washington State residents that help offset the upfront cost and make going solar more appealing. Below are the current solar incentives:
- Federal Tax Credit of 30%. The current bill extends the 30% Solar Investment Tax Credits for both residential and commercial projects placed in service after 12/31/2021 and before 01/01/2033. 26% for systems placed in service after 12/31/2032 and before 01/01/2034. 22% for systems placed in service after 12/31/2033 and before 01/01/2035. There is no maximum credit for systems placed in service after 2008. Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034. The home served by the system does not have to be the taxpayer’s principal residence. See, https://programs.dsireusa.org/system/program/detail/1235
Note: Section 13302 of The Inflation Reduction Act of 2022 (H.R. 5376) extended the expiration date and modified the phase down of this tax credit. It also made stand-alone energy storage systems (battery backup) eligible for the 30% tax credit.
- No Sales Tax. The 100% Clean Electricity Act passed in 2019 by the Washington State Legislature eliminates sales tax for most residential solar energy systems. In most cases, this is about a 10% savings depending upon the tax rate in your area. Effective date, From July 1st, 2019, through Dec 31st, 2029, as long as you generate at least 1 kilowatt (kW), and no more than 100kW, AC of electricity using solar energy. Installation must commence no earlier than July 1st, 2019, and be completed by Dec 31st, 2029 to qualify. See, https://dor.wa.gov/taxes-rates/tax-incentives/incentive-programs#program_list-block-51
- Net-Metering. Send excess energy generated by your solar system back to the grid and receive credit on your bill at the full retail rate from your utility company. (Currently, there is no expiration, however, all good things do come to an end, eventually)