Home Improvements: Do renewables in the home increase its value?
1st May 2014
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This question is rarely asked, but should play a much larger role when looking at possible renewable energy solutions for the home.  The reason it isn’t asked more frequently?  Generally because we can’t see ourselves moving when making decisions of this nature, but also when investing in renewable energy for the home, it is understood to be a long term investment. 

There is one simple question that needs considering when installing new renewable technology or indeed buying a home that already has it in place.  This question should be asked by both:

How much will it save/pay per year over an identical home without the technology?

For example, a simple solar PV system of average size (3kw) could save you in the region of £200 per year (for life) on your electric bill.  In fact, as energy prices continue to rise, this saving too increases, and as long as the energy rise is larger than inflation, you will become better off over time.

So how much is that worth on the cost of a house?

What if the home is also benefiting for the Feed-in-Tariff (FiT) incentive from the government, and there is a 22 year quarterly payment (Index linked no less)also made to the homeowner of around £1000 per year.  What value does that add?

What extra value would you be prepared to pay for a home that gave you a guaranteed £100 per month cash-back for the next 22 years?  In ‘real’ terms, over 22 years it’s worth over £25,000 but would you pay that?  If you wouldn’t you can’t expect any potential purchaser to.

The above example is a very real example and plausible.  Unfortunately, empirical evidence is in short supply, mainly as the home renewables market has only seen major headway in the last three years, and with the average person living in a home for (on average) seven years, then this question is rarely raised by buyers.  And, with no buyer feedback, how can a home owner looking to install a renewable energy solution possibly make an informed decision on perceived future value?

What we do know is this – renewable energy technology has a value, but that value is very much in the eye of the future buyer, and I wouldn’t advise you to second guess.  But do have confidence that in the short to medium term for certain, fossil fuel costs are increasing, and anything to mitigate that can only increase in perceived value.

Cost analysing renewable technologies requires a good degree of understanding in government incentive rules and renewable technology performances.  Speak to a local expert  before investing in a renewable technology for the home to ensure you understand the financial benefits and don’t think too hard about the extra value this may or may not add to your home.

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Nelly B

Member since: 12th November 2008

I am the owner and director of a Digital Marketing Agency, Art Division and have over 13 years experience in working with SMEs on promoting their businesses online, including research, planning and implementation...

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