Rooftop revolution: Housing markets leading in solar panel installations

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While more homeowners are adding solar panels to their homes in hopes of reducing their energy bills, adoption varies significantly across the country

To understand which housing markets are doing the most solar panel installation, ResiClub collaborated with the data experts at BatchService, a cutting-edge property intelligence and technology firm. Using their extensive database, BatchService’s team of data scientists analyzed over a decade of property data to pinpoint the states and counties with the most residential solar installation permits.

The epicenter of solar panel installation: California.

California’s position as No. 1 for residential solar installation permits isn’t surprising. The state has led the nation with renewable energy policies, including generous state and local incentives, tax credits, and mandates such as the 2020 building code requirement for all new California homes to include solar panels.

Located in the heart of Silicon Valley, Santa Clara County leads the entire nation in total residential solar installation permits that have been issued over the past decade, according to BatchService.

Santa Clara’s municipal utility, Silicon Valley Power, offers incentives for solar installations, further encouraging adoption.

How do solar panels impact home values?

ResiClub did some digging; however, most of the research we found is from a few years ago.

A 2015 study by the Lawrence Berkeley National Laboratory found that homes with solar panels sold for an average premium of $15,000 compared to similar homes without solar installations.

In 2019, Zillow economists found that homes that year with solar-energy systems sold for 4.1% more on average than comparable homes without solar panels. For the median-valued home, that translated to an additional $9,274.

However… not all solar is the same.

A 2023 study by Lawrence Berkeley National Laboratory found that homes within 0.5 miles of large-scale photovoltaic systems (see image below) sold for 1.5% less than comparable homes located 2 to 4 miles away. The researchers wrote that: “For the mean selling price in our sample of roughly $400,000, a 1.5% diminution equates to roughly $6,000.”

Freddie Mac: Housing market is ‘still undersupplied by millions of units’

According to a report published last week by Freddie Mac economists, the U.S. housing stock (147.0 million units) is 3.7 million units below the group’s estimate for how many housing units the market needs given demographics (150.7 million units).

While the current 3.7 million housing shortage is smaller than the 3.8 million unit shortfall estimated by Freddie Mac in Q4 2020, it remains significantly higher than their Q2 2018 estimate, which indicated a 2.5 million unit shortage.

“The root cause of decreased housing affordability is the fact that housing supply has not increased enough to match demand. Inadequate housing supply leads homeowners and renters to bid up the sale price and rent of available housing, which puts a squeeze on affordability,” wrote Freddie Mac economists in their report.

Here’s the conclusion provided by Freddie Mac economists in the report 👇

Compass goes shopping

On Monday, Compass reported to the SEC that it’s buying Christie’s International Real Estate. The deal is for $444 million.

If regulators don’t stop the deal, it’ll merge the nation's No. 1 brokerage by sales volume (Compass) with the No. 8 largest brokerage (@properties/Christie’s International Real Estate).

While the deal is BIG news, it isn’t necessarily a huge surprise: Compass has done several acquisitions over the past few years.

Back on their July 31 earnings call, Compass CEO Rob Reffkin made it clear they "continue to seek accretive strategic acquisitions as inbound inquiries from brokerages continue to be robust."