Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes

Adomatis, Sandra; Jackson, Thomas; Graff-Zivin, Joshua; Thayer, Mark; Klise, Geoffrey; Wiser, Ryan; Hoen, Ben

doi:10.2172/1172644

Title: Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes

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Abstract

Capturing the value that solar photovoltaic (PV) systems may add to home sales transactions is increasingly important. Our study enhances the PV-home-valuation literature by more than doubling the number of PV home sales analyzed (22,822 homes in total, 3,951 of which are PV) and examining transactions in eight states that span the years 2002–2013. We find that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system. Only a small and non-statistically significant difference exists between PV premiums for new and existing homes, though some evidence exists of new home PV system discounting. A PV green cachet might exist, i.e., home buyers might pay a certain amount for any size of PV system and some increment more depending on system size. The market appears to depreciate the value of PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses and the rate of straightline depreciation over the asset’s useful life. Net cost estimates—which account for government and utility PV incentives—may be the best proxy formore »« less

Authors:

Adomatis, Sandra ^[1]; Jackson, Thomas ^[2]; Graff-Zivin, Joshua ^[3]; Thayer, Mark ^[4]; Klise, Geoffrey ^[5]; Wiser, Ryan ^[6]; Hoen, Ben ^[6]

Adomatis Appraisal Services, Punta Gorda, FL (United States)
Texas A & M Univ. and Real Property Analytics Inc., College Station, TX (United States)
Univ. of California, San Diego, CA (United States)
San Diego State Univ., CA (United States)
Sandia National Lab. (SNL-NM), Albuquerque, NM (United States)
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)

Publication Date:: Thu Jan 01 00:00:00 EST 2015

Research Org.:: Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)

Sponsoring Org.:: USDOE Office of Science (SC)

OSTI Identifier:: 1172644

Report Number(s):: LBNL-6942E

DOE Contract Number:: AC02-05CH11231

Resource Type:: Technical Report

Country of Publication:: United States

Language:: English

Subject:: 14 SOLAR ENERGY; photovoltaic; PV; solar; homes; residential; property value; selling price; premium; hedonic; California; news homes; existing homes; host-owned

Citation Formats


                    Adomatis, Sandra, Jackson, Thomas, Graff-Zivin, Joshua, Thayer, Mark, Klise, Geoffrey, Wiser, Ryan, and Hoen, Ben. Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes.  United States: N. p., 2015. 
        Web.  doi:10.2172/1172644.

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                    Adomatis, Sandra, Jackson, Thomas, Graff-Zivin, Joshua, Thayer, Mark, Klise, Geoffrey, Wiser, Ryan, & Hoen, Ben. Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes.  United States.  https://doi.org/10.2172/1172644

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                    Adomatis, Sandra, Jackson, Thomas, Graff-Zivin, Joshua, Thayer, Mark, Klise, Geoffrey, Wiser, Ryan, and Hoen, Ben. 2015.  
        "Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes".  United States.  https://doi.org/10.2172/1172644.  https://www.osti.gov/servlets/purl/1172644.

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@article{osti_1172644,

  title        = {Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes},

  author       = {Adomatis, Sandra and Jackson, Thomas and Graff-Zivin, Joshua and Thayer, Mark and Klise, Geoffrey and Wiser, Ryan and Hoen, Ben},

  abstractNote = {Capturing the value that solar photovoltaic (PV) systems may add to home sales transactions is increasingly important. Our study enhances the PV-home-valuation literature by more than doubling the number of PV home sales analyzed (22,822 homes in total, 3,951 of which are PV) and examining transactions in eight states that span the years 2002–2013. We find that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system. Only a small and non-statistically significant difference exists between PV premiums for new and existing homes, though some evidence exists of new home PV system discounting. A PV green cachet might exist, i.e., home buyers might pay a certain amount for any size of PV system and some increment more depending on system size. The market appears to depreciate the value of PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses and the rate of straightline depreciation over the asset’s useful life. Net cost estimates—which account for government and utility PV incentives—may be the best proxy for market premiums, but income-based estimates may perform equally well if they accurately account for the complicated retail rate structures that exist in some states. Although this study focuses only on host-owned PV systems, future analysis should focus on homes with third-party-owned PV systems.},

  doi          = {10.2172/1172644},

  url          = {https://www.osti.gov/biblio/1172644},
  journal      = {},
number       = ,

  volume       = ,

  place        = {United States},

  year         = {Thu Jan 01 00:00:00 EST 2015},

  month        = {Thu Jan 01 00:00:00 EST 2015}

}

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