Understanding the Solar Home Price Premium: Electricity Generation and "Green" Social Status
This study uses a large sample of homes in the San Diego area and Sacramento, California area to provide some of the first capitalization estimates of the sales value of homes with solar panels relative to comparable homes without solar panels. Although the residential solar home market continues to grow, there is little direct evidence on the market capitalization effect. Using both hedonics and a repeat sales index approach we find that solar panels are capitalized at roughly a 3.5% premium. This premium is larger in communities with a greater share of college graduates and of registered Prius hybrid vehicles.
We thank participants at the March 2011 Green Buildings Conference at Maastricht University for useful comments. We thank the UCLA Ziman Center for Real Estate for generous funding. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Dastrup, Samuel R. & Graff Zivin, Joshua & Costa, Dora L. & Kahn, Matthew E., 2012. "Understanding the Solar Home price premium: Electricity generation and âGreenâ social status," European Economic Review, Elsevier, vol. 56(5), pages 961-973. citation courtesy of