The future looks bright for solar energy. And that’s good news for real estate.
Once viewed as nothing more than a pricey plaything for well off environmentalists, solar power is going mainstream, achieving “grid parity” with the giants of conventionally energy in several states, with more to come.
Though it still accounts for only a small percentage of the overall US energy consumption, solar power industry is surging, thanks to innovations that make solar power more accessible and an aggressive information campaign.
In the past decade, solar power use has jumped by 62 percent, thanks to cheaper solar technology that makes solar energy available to middle and lower income households as well as the more affluent. As worries about the environment increase, solar power representatives have stepped up their campaign to push the message: solar energy is clean, renewable, and sustainable.
Homeowners are listening. According to a recent Bloomberg business report, by 2016. Solar energy savings are expected to run on par with conventional utility power in 47 of the 50 states.
In states that lead the country in solar production, including the obvious powerhouse California as well as Eastern states like New Jersey and Maryland, that figure is higher. As solar technology continues to advance, homeowners are increasingly opting for the solar panels over the utility hookup. And their numbers are only expected to increase.
Industry watchers point out that a large part of the appeal of solar power has to do with the fact that it[s a technology, not a resource like fossil fuels. As the technology that supports solar energy collection and utilization continues to evolve, it should become less expensive and more accessible rather than the opposite. Sunlight isn’t a depletable resource of the earth. Fossil fuels are. And the technology for extracting them is limited too.
The growth and accessibility of solar power is boosting a number of other sectors of the economy. The demand for solar collectors is boosting construction and manufacturing. It’s making its mark on the real estate market too.
A recent report by EnergySage notes that property values for homes with solar panel systems are at least 3 to 4 percent higher than for comparable homes with conventional utility hookups. What’s more, solar powered homes sell faster than homes without – almost twice as fast in some markets.
Obviously, the higher end of those statistics is being observed in markets where costs of conventional electric power are the highest and solar power incentive programs are strongest. But the uptick in property values and demand in other markets as well sends a clear message: solar sells.
That’s good news for sellers who can expect to recover their investments in solar power, and then some. And for buyers, who get a money-saving and environmentally friendly feature that makes the property more attractive.
What’s more, owners of solar powered hems get an additional tax break on top of the many other tax benefits afforded to owners of residential property. Currently the tax credit for solar power stands at 30 percent. That credit is set to expire n 2015, but isn’t expected to vanish completely. Even if cut back, the tax credit still stand as a reward for owners of solar power systems.
Solar power suppliers also offer their own incentives in the form of rebates, financing packages and free installation. All these features make solar not only a desirable feature for the homeowner but a valuable bargaining chip when the house goes up for sale.
Utility companies aren’t happy with all this. As solar continues to nibble into the profits of utility providers large and small are fighting back. They claim that as solar energy users go off the mainstream grid, costs go up – and those costs are passed on to other non-solar consumers. And, the say, if enough consumers jump ship, the stability of the grid itself could be in jeopardy.
In some states, especially those with high solar consumption like California and Arizona, measures taken by utility suppliers have even gone political. They’ve sponsored ballot measures to change zoning and property tax laws to make it harder for homeowners to install solar panels. And they’ve launched publicity campaigns aimed at scaring consumers away from going solar.
Those measures have become so aggressive in some places that grassroots groups have sprung up to challenge them. California’s CAUSE (Californians Against Utilities Stopping Solar Energy) Coalition is one of these – a partnership of solar energy providers, environmentalists and doctors committed to clean air and sustainability.
It’s a battle that isn’t likely to end any time soon. And as the technology of renewable solar energy outstrips the limitations of the fossil fuel industries, residential real estate – and the investors who use it, as Jason Hartman recommends, to build wealth – may be the winners. (Featured image:Flickr/danburton)
Sources:
Randall, Tom. “While You Were Getting Worked Up About Oil Prices, This Just Happened to Solar.” The Grid. Bloomberg Business. bloomberg.com. 29 Oct 2014
“Solar Panel Systems Increases [sic] Your Property Value.” EnergySage Solar Marketplace. Energysage.com 12 Nov 2014
“The Utility vs Solar Fight: Why? What’s At Stake?” Clean Technica. cleantechnica.com. 22 Aug 2013
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