(Photo courtesy of E2 Solar)
As more people prioritize sustainable living and green workspaces, properties with solar energy systems are becoming the gold standard — and for good reason. Installing solar panels benefits the environment and can maximize the value of residential and commercial real estate.
Whether you’re a homeowner looking to sell or a business hoping to attract tenants, solar energy systems can provide an edge in today’s competitive real estate market. If you’re a homebuyer or looking to lease commercial space, solar offers the potential for long-term energy savings and a lower carbon footprint.
Considerations for Homeowners Looking to Sell
The residential solar market is projected to more than triple over the next decade, according to the Solar Energy Industries Association (SEIA). And more homes with solar can be good news for buyers and sellers — as long as they’re smart about this investment. “I’m a huge advocate for [solar],” says Kip Lohr, owner of Lohr Real Estate and the current owner of a solar system. “For the people it’s right for, it’s absolutely a good decision.”
If a homeowner has installed solar panels, these can increase a home’s value and appeal. In many markets, buyers may be willing to pay more for homes that promise lower energy costs and a reduced carbon footprint. However, there are some caveats. Lohr cautions, “The additional value is not equal to the original acquisition cost. [Spending] $80,000 on a system isn’t going to mean you can sell your house for $80,000 more. Best case scenario, we might get $20,000 more than other homes like yours that have sold without solar systems.” Additionally, in low-inventory areas like Central Oregon, Lohr says solar panels don’t play as much of a role in driving interest.
Homeowners should also understand that installing solar can be pricey upfront (averaging around $15,000), and it often takes five to seven years to recoup their investment. “People need to ask themselves when they’re thinking about putting a system on their roof: Are you even going to live there seven to nine years?” says Lohr. “The average turnaround time for somebody in their house is about five years. Unless a seller is in the home long enough to at least break even, they’re leaving money on the table.”
When getting solar estimates, it’s also important to research the credibility and history of the companies you’re considering. “Other than the money and how long you’re going to stay in your home, the biggest consideration in choosing solar should be: Is this company that you’re hiring actually going to be around to service this system?” says Lohr. “I’d rather pay more money and know a company is going to be around in 15 or 20 years than somebody who’s going to give me a cheaper deal and then be gone in two years.”
Benefits for Homebuyers
Homebuyers often find solar appealing due to the prospect of a minimal or non-existent electricity bill — along with the ability to protect oneself from rising costs in the future. “Under the right circumstances, solar is a huge win for the buyer,” says Lohr. “They may be inheriting a $40,000 system, and there was only an allowance of maybe $20,000 of additional value on the appraisal side. So if you think about it that way, you’re getting the system for half price. Obviously, it depends on the size of the system and a lot of other factors, but it’s the buyers who are benefiting the most — as long as they’re not having to roll a chunk of the system into their purchase price through a bigger loan.”
The Long-Term Value for Commercial Properties
In Oregon, state law requires public entities (e.g., state agencies, community colleges, school districts, and local governments) to spend 1.5 percent of public building construction costs on green energy technology, such as solar.
Even in the non-public sector, green initiatives reflect a business’s commitment to sustainability. This means that commercial properties with energy systems often stand out in crowded markets and attract tenants who value eco-friendly practices. According to the SEIA’s Solar Market Insight Report 2024 Year in Review, last year saw a record-breaking number of solar installations on commercial properties.
The financial benefits for businesses that install solar are significant. According to the U.S. Energy Information Administration (EIA), the average commercial building spent $7800 on electricity in 2021 (likely on par with most small-to-mid-sized businesses). This equates to about $156,000 over 20 years. If this same business were to install a solar system that offsets 90 percent of its electricity consumption, it could save over $100,000 in electricity costs over 20 years. The business also protects itself against electricity price volatility and inflation, making it easier to budget and plan for the future.
Weighing the Pros and Cons
Beyond the short-term expense, a solar system is often a solid investment for property owners. High-quality solar panels have a lifespan of 20 to 30 years and require minimal maintenance. For both homeowners and business owners in Oregon, federal and state tax incentives can help offset installation costs, whether you’re looking to install solar panels or a solar plus battery storage system.
In addition to the financial benefits, solar panels have a positive environmental and social impact. By generating solar power, property owners can reduce their reliance on fossil fuels and lower greenhouse gas emissions. Properties that embrace green technologies often enhance the reputation of their neighborhoods and communities, too — making solar a win-win in many cases.
To find out if this form of renewable energy is a good fit for your property, we recommend talking to your real estate agent — and to a reputable, long-standing solar company willing to discuss the pros and cons of this technology.
