Published on October 23rd, 2010 | by Susan Kraemer18
Solar Homes Sold 20% Faster, and for 17% More, NREL Study Finds
October 23rd, 2010 by Susan Kraemer
In by far the most exhaustive and detailed study to date, the National Renewable Energy Laboratory (NREL) found that solar homes sold 20% faster, for 17% more than the equivalent non-solar homes, across several subdivisions built by different California builders.
When Shea Homes put solar PV and solar thermal systems on half the homes in a development, all 257 of them sold within a year, two years faster than expected. And while these new houses were priced at $380,000 to $500,000, they sold for as much as $600,000.
This was well before the housing crash, so it represents the buoyant market of that time, in 2003. Still, it found that compared with non-solar homes, the houses that had solar on them sold for more. While the average price increase related was 55% for the solar homes, the non solar homes appreciated only 33% (pg 49.) This represents a 20% higher sales price for solar homes.
The Clarum Homes’ solar homes in the study also sold faster than their “control” homes. The solar homes sold in 23 months, the non-solar, in 28 months. This is a 17% faster home sale for a solar home.
The solar homes appreciated 20% more, and sold 17% faster than the non-solar homes.
After extensive interviews with the home buyers in the development, the (413 page pdf) NREL study made some other interesting findings.
If solar was already on the house, and factored into the price already, buyers were more likely to pick a house with solar. But if it was just one more decision to be made at the point of purchase, the decision got shelved.
This was found to happen because the salespeople were more likely to neglect to bring up the option altogether, for fear of losing a sale to indecisiveness. After all, they can’t even sell the house till the buyer has decided on either the Neon orange Corian or the Tuscan granite for the counter tops. They can sell the house without solar, but not without the counter tops.
Why builders should make solar standard:
By contrast, instead of leaving the decision to the salesperson, simply building the house with the solar system as standard was found to be behind the successful widespread adoption of the solar powered homes. Some of the homes were built with solar on them already, so there was no decision needed. The sales comparison between them and the non-solar homes formed the basis of the discovery of the 20% higher prices, and 17% faster sales.
Solar as the standard was also more profitable for builders themselves, the study found. In one California development, all 306 homes included solar hot water systems and 120 also included PV systems. That builder found that it was more profitable to build in the solar systems as the standard feature rather than wait for homeowners to request an upgrade and to add the solar in those instances later.
Even modest reductions appreciated:
Also, interestingly, the homes are not nearly as solar powered as they could be, with relatively modest reductions in their electricity bill. But the buyers were very satisfied with their energy bill reductions. Homes had small 2.4 KW PV systems (as well as solar hot water systems) that reduced their energy bills by only 54% compared with comparison homes.
Of course, it depends on how many plasma TVs are inside, but the average home like this needs about a 6 KW system to supply all of its electricity.
And were these just crunchy granola-chomping lefty hippies buying the solar homes? Absolutely not. The study found no differences between the solar home buyers and the average buyers for these sorts of homes. But the buyers were thrilled with their savings.
As the NREL study concludes, these results suggest:
“…a conceptually fresh alternative paradigm for the building and marketing of new Zero Energy Homes. When this paradigm is used, builders, new home buyers, and utility companies will benefit. When appropriately applied to business practice and public policy, this new paradigm will help builders create the sustainable communities so necessary for our well-being and that of future generations”.
More: Watch this video on Solar Home Value.