In the real estate market, many homeowners are looking for ways to increase their property’s value, and solar energy is often marketed as a solution. In Colorado Springs, where the sun is abundant, installing solar panels seems like a natural choice for those looking to reduce energy bills and promote sustainable living. But does going solar truly increase a home’s value when it’s time to sell? I decided to dig into the numbers to find out. I would caveat this by saying there are many reasons to get these panels; this article is intended only to answer the question of whether or not they add value for the purpose of home sales.
Solar Homes in Colorado Springs
In the past year, a total of 12,682 homes were sold in the Colorado Springs area (source: PPMLS extrapolated data, 8 Oct 2024). Out of these, 140 homes were equipped with solar panels. This represents just over 1% of all home sales—a relatively small segment of the market. With increasing awareness of renewable energy, we expect this number to continue rising in the coming years.
Do Homes with Solar Panels Sell for More?
From an initial look, the answer seems to be yes—but with some important caveats.
- Average Sale Price for Solar Homes: $548,639
- Average Sale Price for Non-Solar Homes: $524,515
On average, homes with solar panels sold for about $24,000 more than homes without solar. This number suggests that solar does add value to a home, which is in line with national trends showing a slight premium for solar properties.
However, It’s Not That Simple
When we dig deeper and control for factors like square footage, number of bedrooms, location, and year built, the picture becomes more nuanced. After adjusting for these variables, we found that the presence of solar panels alone does not significantly impact home sale prices. This suggests that other characteristics of the home, such as size and location, are more influential in determining its market value.
For example, a larger home in a prime location will naturally command a higher price, regardless of whether it has solar panels. Conversely, a smaller or older home might not see much of a price boost, even with solar installed.
Digging Even Deeper: The Technical Details of Our Solar vs. Non-Solar Comparison
To ensure an accurate comparison between homes with and without solar panels, I applied a linear regression model that accounted for several key variables affecting home prices. These variables included square footage, number of bedrooms, bathrooms, garage spaces, year built, and postal code to control for location-based pricing differences. By using this model, we isolated the effect of solar panels on home prices, removing the influence of other factors that typically drive real estate values.
In technical terms, we used the home’s final sale price as the dependent variable and included these other factors as independent variables. The presence of solar panels was incorporated as a binary variable (1 for homes with solar and 0 for homes without). Our model showed that while homes with solar initially appeared to sell for more, the coefficient for solar presence was not statistically significant when controlling for other variables, meaning that the solar panels themselves did not have a meaningful direct impact on sale price when compared to other features.
Additionally, the model produced an R-squared value of 70.8%, indicating that our regression explained about 71% of the variance in home prices across the dataset—suggesting a relatively strong fit. However, it was clear that factors like square footage and location played a far more significant role in determining the sale price than the presence of solar panels.
Days on Market: Are Solar Homes Selling Faster?
One of the more interesting insights from our analysis is that solar-equipped homes don’t necessarily sell faster. Solar homes spent an average of 31.8 days on the market, which is very comparable to non-solar homes. This suggests that while solar panels may attract a niche group of environmentally conscious buyers, they don’t significantly speed up the overall sale process in this area.
What Does This Mean for Homeowners?
If you’re considering installing solar panels in hopes of increasing your home’s value, it’s essential to think long-term. In Colorado Springs, solar energy can indeed provide savings through reduced utility bills, especially with the state’s sunny climate and local net metering policies. However, if you’re banking on solar to substantially boost your home’s sale price, the impact may not be as significant as you’d expect—at least not yet.
That said, as energy prices continue to rise and as solar technology improves, we could see this change in the future. For now, installing solar should be seen primarily as a lifestyle investment and an opportunity to save on energy costs rather than a guaranteed way to increase your home’s resale value.
The Future of Solar in Colorado Springs Real Estate
Solar adoption in Colorado Springs is still in its early stages, but the potential for growth is clear. As more homeowners recognize the environmental and financial benefits of solar energy, we expect to see an increase in solar installations and possibly, a greater premium for solar homes. Additionally, with continued advancements in solar technology and more attractive incentives at both the state and federal levels, solar will likely become an even more appealing option for homeowners.
Final Thoughts
For now, the data tells us that solar panels in Colorado Springs may add some value to a home, but their impact on price isn’t as strong as other factors like location, size, and home features. If you’re planning to stay in your home for a while, solar is still a great investment for energy savings. However, if you’re preparing to sell, know that solar is just one of many elements that buyers will consider.
If you’re looking to buy or sell a home in Colorado Springs, please give me – Rob Thompson – a call at 719-440-6626.