We are living in a time where everyone wants to be “green”. Fortunately for us being energy conscious can now increase the value of your home and leave extra funds for more home improvement projects!
A study by Lawrence Berkeley National Laboratory (LBNL), a research laboratory funded by the U.S. Department of Energy, analyzed sales of homes with solar panels with the goal of determining just how much value solar can add. The finding is that for a standard 6-kilowatt (kW) solar PV system at about at $15,000 means that solar can add $24,000 to the home’s resale value. Therefore, investing in solar power can have a great impact on the environment and your pocket. Before installing solar power, many homeowners delve deeper into the Solar Power System 101 just to make sure it’s the right choice for them but more often than not it’s a great investment.
Studies have also found that solar homes spend less time on the market and often sell for much more money than their equivalent non-solar counterparts. A 2010 National Renewable Energy Laboratory (NREL) study found that California homes with solar systems sold 20% faster, and for a 17% higher price than similar homes on the market.
Don’t forget the tax credit that can be taken advantage of by people who own their solar panel system. The federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value. According to the EnergySage, the ITC helped the average shopper save more than $5,000 on the cost of going solar in 2017.
The tax credit, however, is expected to last only until 2021. Additionally, the percentage saved is expected to decline after 2019 and won’t be available to residential homeowners at all in 2022.
- 2016 – 2019:The tax credit remains at 30 percent of the cost of the system.
- 2020:Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes.
- 2021:Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
- 2022 Onward: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
The law allows owners of new solar energy systems to claim their tax credit as soon as the construction of the system is complete, as long as it is operational by December 31, 2023.
An added bonus to spending remodeling dollars on solar is that the overall design and aesthetics doesn’t change every year. Remember Formica counter tops or the dreaded shag carpeting? Even better, most remodeling projects take a period of time to complete and are often disruptive to the household’s daily routine. Solar panels can often be installed in one day and can almost erase your entire electric bill adding more savings every month!
Other cost saving remodels include installing a smart thermostat, caulking and weather-stripping around doors and windows, updating insulation, smart plugs allowing for automatic timers to keep the energy drain down, and installing energy efficient light bulbs that can also be set to an automatic timer via wi-fi.