What do solar panels do for your home's resale value?

A newly released paper looks at the capitalization values of solar panels.

Michael Goulding / The Orange County Register / Newscom / File
Eric Overton from SolarCity brings solar panels onto the roof of a home in Westminster, Calif., in this 2008 photo. What return on investment do solar panels bring, in terms of home resale value?

Who said that I've stopped doing research? Samuel Dastrup, Joshua Graff-Zivin, Dora L. Costa and Matthew E. Kahn have just released this residential real estate and solar panels working paper.


This study uses a large sample of homes in the San Diego area to provide some of the first capitalization estimates of the resale value of homes with solar panels as compared to comparable homes without solar panels. While the residential solar home market continues to grow, there is surprisingly little direct evidence on the market capitalization effect. We find evidence using both hedonics and a repeat sales index approach that solar panels are capitalized at roughly a 3% premium. This premium is larger in communities with more registered Prius hybrid vehicles and in communities featuring a larger share of college graduates.


The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on greeneconomics.blogspot.com.

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