Could solar panels help your property value?

There’s a rising trend in homes listed for sale with features designed to cut the price of your energy bill. Could the growing popularity of homes with solar panels for buyers be a sign installing solar could boost your property’s value?

Recent Ray White data shows that over 101,000 properties with solar panels were listed for sale in Australia in the past 12 months to May. This is an increase from 79,860 in the same period in 2020, indicating a shift in public awareness and interest in energy-efficient home infrastructure.

This shift is supported by the Australian Academy of Technological Sciences and Engineering (AATSE), which recently reported renewable energy adoption was increasing as wind and solar power became more affordable. The AATSE noted that renewable energy was tracking towards 50% of Australia’s electricity generation in 2025, and 69% by 2030.

There are obvious environmental benefits to installing renewable energy infrastructure and moving away from traditional energy providers. But in a time of rising energy prices, there’s serious financial benefits for tenants and home buyers to consider.

If this trend continues, it may be safe to suggest that homeowners are not only prioritising renewable energy but may be willing to pay more for a home that already has said infrastructure in place.

How much could solar boost your property’s value?

A recent report by Domain found that energy-efficient homes are attracting more buyer interest, as well as selling faster and nabbing higher sale prices.

The premium paid for a median priced energy-efficient house in 2022, compared to non-efficient houses, was $125,000, or 17.1% more. And for energy-efficient units, the premium paid was $72,750, or 12.7% more.

Premium paid for median priced energy-efficient home vs. non-efficient home

Source: Domain Sustainability in property report

The Domain report found that the greatest difference in premiums paid were in Queensland and Victoria, with energy efficient homes nabbing 28.9% and 24% more respectively.

Domain chief of research and economics, Nicola Powell, did note that energy-efficient homes are generally newer, which also influences the premium paid.

“Sustainable homes come at a price premium, but there are many benefits,” said Ms Powell.

“You can sell for a price premium, sell quicker, get more [buyer demand] and save money in the long run on the running costs of a home,” she said.

And in good news for both owner-occupiers and investors, installing solar power may boost the value of your short- and long-term property goals.

A survey by Origin Energy shows that not only could installing solar help to increase a property’s value, but tenants may be willing to pay more to rent a home with solar as well.

Through a survey of over 1,000 Australians, Origin Energy research found that:

• 77% of Australians see a house with solar as more valuable than those relying on traditional energy sources
• 57% plan to have a solar battery installed within the next 5 years.

In terms of dollar values, over half of tenants (55%) said they would be willing to pay up to $10 a week more to rent a home with solar power.

Cost of installing solar panels

A key barrier to homeowners installing solar power are the upfront costs associated. According to SolarQuotes, the approximate cost of quality solar system installation with Tier 1 solar panels (fully installed) as of June 2022 is anywhere from $2,500 – 13,000, depending on the system size:

Cost rage of solar panels

Source: SolarQuotes.com.au

It’s worth doing the calculations on your existing property value and energy bills to see if, and when, you may break even. For example, if your energy bills are around $1,500 - $2,000 each year, the cost of solar installation is around $6,500, and you generated enough power to run solely on solar, it could take three to four years to break even for the cost of installation.

But, if your property increases in value by $50,000 due to solar installation, and the cost of installation was around $6,500, that’s a serious savings to keep in mind, especially if you intend to sell soon.

‘Solar rebates’ and available incentives

Solar systems are still supported by several federal government schemes. Many Australians will not need to pay for the full cost of installation themselves, so it’s worth researching which may apply to you.

• Feed-in tariff rates – this is a payment for excess electricity generated by solar panels or wind power systems. The amount paid will depend on the retailer.
• Solar for low-income households: If you currently receive the Low Income Household Rebate in NSW, you may be eligible for free 3-kilowatt solar system installation on your home.
• Home Energy Support: In the ACT, apply for rebates of up to $5,000.
• Solar panel (pv) rebates in VIC, up to $1,400 may be available in rebates, with the option of an interest free loan.
• Small-scale Renewable Energy Scheme – creates a financial incentive to install solar through the creation of small-scale technology certificates (STC). STCs are equal to 1 megawatt hour of renewable electricity. These can be sold (typically by the installer) to the energy retailers and used to offset the upfront cost of solar system purchases. The price of STCs fluctuates with the market.

In terms of real-world value, pricing on a typical 6.6kW system, including installation and the STC incentive, would equa

Source: SolarQuotes.com.au

The upfront costs of solar panel installation can be intimidating for Australian homeowners. One option to consider when financing your solar panel installation is a green personal loan. Green loans for solar installation generally come with lower interest rates than standard personal loans, as lenders are incentivising homeowners to make more sustainable choices.

Compare personal loans