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  • Writer's pictureJesse Ledbetter

Solar increases value by 4.1%...Myth Debunked.

If you've followed this page, you know that if Zillow says something, the opposite is probably true. They admit that their Zestimate is off by 7% or more 50% of the time. They cheat off of real estate agents to wildly swing their estimate once a property comes to market. However, this information is widely quoted by solar sales people and its an outright lie - and one that a drive through any new neighborhood will make obvious.

Last summer I let an Ion Solar representative give me their pitch. They said that Zillow says solar increases values by 20%... I nearly laughed in his face. The idea that this would be a percentage relationship is comical on its face. Imagine one million dollar homes suddenly being worth 1.2 million because they installed one solar panel.

The easiest way to know when solar will add value to a home will be when new construction developments offer them and don't require you to pay out of pocket to cover the cost. Its a common tactic in new construction that elements that the builder knows will not increase the value of the home have to be covered in cash (think upgrades that are far above normal for the plan).

Home builders are in the business of making money (shocking, I know), and if an element won't add value, they don't offer to build it because they can't make money on it. This is why tract plans don't have private pools, many don't have anything more than a porch and deck or patio, and no new construction comes standard with solar - because the builder can't make money. These features all have low to negative ROI, and therefore don't make sense to build - not even at scale, much less one building at a time.

Your pool, likely lost 50% of its value the moment is was completed. Your single outdoor living area (a deck OR patio OR screen porch) may have faired slightly better. At best, your solar was a wash... or to look at it this way:

  1. The salesperson said your energy bill for the next 25 years would be $25,000

  2. You paid $25,000, plus interest to offset that near to zero

  3. You gamble that energy prices will go up faster than their estimate on paper - because they won't put that in writing... but they tell you it will be higher.

  4. You put new holes in your roof and add another major element that needs maintenance and has an economic life of no more than 25 years, by the most generous of estimates by manufacuterers.

So, you're gambling. You've put your money on energy prices rising VS a hail storm, hurricane, tornado, leaking roof, or electrical fire (like those that burnt 13% of Amazon's facilities) happening in the next 25 years.

May the odds be ever in your favor... but don't count on seeing a dime of value added from that bet.

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