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Soak up the sun: Impact of solar energy systems on residential home values in Arizona

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  • Qiu, Yueming
  • Wang, Yi David
  • Wang, Jianfeng

Abstract

Recent increase of installations of solar energy systems on residential properties begs the question of whether such investments are being recognized by the market. Studies that estimate the impact of solar technologies on home values have been scarce. Using transaction and valuation data for a sample of residential properties in Arizona and matching methodology, results show that solar photovoltaics installation indeed has positive impacts on both house value and transaction prices. This is the first empirical study conducted in Arizona, a state of crucial importance for solar energy development with its abundant solar resources. In particular, properties with electricity-generating solar panels enjoy an average premium of approximately $45,000 (15% of medium home value) and transaction price premium of $28,000 (17% of medium home sales price). We do not find a statistically significant premium on homes with solar water heaters alone.

Suggested Citation

  • Qiu, Yueming & Wang, Yi David & Wang, Jianfeng, 2017. "Soak up the sun: Impact of solar energy systems on residential home values in Arizona," Energy Economics, Elsevier, vol. 66(C), pages 328-336.
    • Handle: RePEc:eee:eneeco:v:66:y:2017:i:c:p:328-336
    DOI: 10.1016/j.eneco.2017.07.001
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    15. Elias Asproudis & Cigdem Gedikli & Oleksandr Talavera & Okan Yilmaz, 2023. "Returns to Solar Panels in the Housing Market: A Meta Learner Approach," Discussion Papers 23-01, Department of Economics, University of Birmingham.
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    More about this item

    Keywords

    Solar photovoltaics; Solar water heater; Residential house price; Estimated market value;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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