You may realize the major benefits of adding solar panels to your commercial property. This includes the lower electricity bills, the tax credits, and the renewable energy. However, it is also important to know the ways that solar panels can increase the value of your commercial property. You probably also want to know how much it increases the value of the property.
Will Solar Panels Increase the Value of the Commercial Property?
Not every commercial property has significant value fluctuation due to the addition of solar panels. Location has a lot to do with the increased value. For example, a place that receives little to no sunlight during the Winter will not hold the same amount of value for solar as a place that has significant sunlight year round. Net metering policies in an area can also affect the value.
Risks also need to be factored into the equation. Financial risk is fairly unlikely, but possible with solar system installations. Sometimes there are risks associated with construction. Other times, materials may be inadequate. These risks can affect the value that the solar system project brings to your commercial property. It is always a good idea to work with reputable, experienced, and insured solar panel system providers and installers. You should always make sure that they have a good warranty. This will reduce the amount of risk and help to ensure that your property’s value will go up.
How Do Solar Panels Increase Property Value?
When someone is interested in buying a commercial property, they want to know that it will be a wise investment. When a potential buyer sees that the building is powered by solar panels, they know that they can benefit from lower energy bills which raises the value of the property financially. In addition, they may see the energy independence and renewable energy aspects of solar energy systems as worthy of increased value as well.
One study found that buyers are more willing to pay a premium for a residential property that has a solar system. There is no reason to think that this would not be true with commercial properties as well. In fact, it may be worth more for commercial properties than residential ones because they are primarily for financial investment. Some lenders have even issued guidelines that require appraisers to analyze solar panel systems in order to determine any additional property value.
How Much will the Value Increase?
The amount of increase in the value of your commercial property is determined by a plethora of factors. There have not been very many studies into the changed value of commercial properties by the addition of solar. However, studies on residential solar system installations show that there can be a significant increase in the value.
One thing to look at to determine how much the property value will increase is the ownership of the system. The effect of a leased solar panel system on the value of a property has not been studied the way owned systems have. The greatest increase in value would come from ownership of both the property and the solar panels. Ownership of the solar panels and equipment will supply you with additional tax incentives and lower energy costs. In addition, you may be able to take advantage of green energy credits.
As a commercial property owner, you may also be able to charge your tenants more when you add on solar panels. Their energy costs will decrease and they will be able to benefit from the reputation that comes with solar panels and renewable energy. This may be enough to increase their rent, especially if they are paying so much less in energy that their total costs have decreased. You may even attract additional future tenants because so many companies are trying to enact sustainable actions into the business plan.
A solar PV system will last up to 30 years and during that time the utility rates are likely to increase substantially while the property owners will be supplying much of the energy themselves. These monthly savings on energy will add up and often pay for more than the initial cost of the solar panel system.
Studies show that a building with solar technology may even sell faster than one with traditional energy sources. This is likely due to the many incentives that encourage buyers. Many of the incentives for the owner to add on solar panels are the same for the buyer. The buyer would save money on electricity bills and have increased property value without having to pay the initial cost of the solar energy system.
All of these factors added together means that your return could be 200 percent or even more when you install a solar system to a commercial property.
Conclusion
If you are on the fence about buying a solar panel system for your commercial property, then think of it solely as a financial investment. As soon as the system is up and running you can reap the reward of decreased energy costs while having an increased property value. Over time, you will make more than the return on investment through energy savings, reputation, and increased property value.
