If you remodel your kitchen or put in a custom library, chances are that money is lost; when buyers look at the comparable sales for homes in the area, they want to pay based on similar square footage. 

Not so for solar installations, in six markets, according to a recent analysis. Researchers engaged a team of seven appraisers from across the six states to determine the value that solar photovoltaic (PV) systems added to single-family homes using the industry-standard paired-sales valuation technique, which compares recent sales of comparable homes to estimate the premium buyers would pay for PV. 

The appraised premiums also confirmed statistical modeling results from a large Berkeley Lab study conducted in 2013, which found that buyers were willing to pay $15,000 more for a home with the average-size solar photovoltaic system (3.6 kilowatts), or about four additional dollars per watt of solar power. That is about fair value, since the cost will have factored in generous rebates, and good news for the 500,000 homes that took advantage of the solar subsidies from taxpayers to bring their own costs down. 

For each of the 43 pairs of comparable PV and non-PV homes, appraisers found premiums were highly dependent on the underlying system and market characteristics. These include the size of the system, the available incentives and installed prices at the time of sale, and the underlying retail electricity rates. The appraisers therefore recommend not using a one-size-fits all approach, but rather one that considers these factors. They found both the replacement cost, specifically one that takes into account federal state and utility incentives, and the present value of energy savings are likely good predictors of premiums found in individual markets. 

The study also found that price per watt was the appropriate metric for valuing PV systems and that there was no consistent difference in days on the market between PV and non-PV homes.