Energy-Efficient Home Upgrades That Can Affect Your Home Value

As electric rates continue to increase, prospective homebuyers are seeking out properties with energy-efficient features that will keep their future electric bills low. A study by the National Renewable Energy Laboratory (NREL) stated that reduced utility bills can increase property value. 

From installing solar panels to upgrading insulation, there are a few energy-efficient home upgrades that can help you make your home stand out in a competitive market. In this article, we’ll discuss 9 ways you can upgrade your home to be more energy efficient that positively impact your home’s value. 

9 home energy upgrades that increase home value

1. Solar panels

Adding solar panels to your home brings in a plethora of benefits, including a reduced carbon footprint, energy independence, and, best of all – huge savings on your electricity bills. However, not many homeowners know that adding solar panels can also increase your home’s value.

A 2024 Zillow study conducted by experts at SolarReviews found that homes with solar panels were selling for 6.8% more on average than homes without solar panels. To put that into perspective, a home listed at $300,000 could sell for $320,400 with the addition of a solar system. 

Not only does selling a home with solar panels increase your property value, but, in some cases, it can also make your home sell faster!

2. Solar battery storage

Much like solar panels, a battery storage setup installed in your home could be a desirable feature for buyers. A solar battery stores excess solar energy that can then be used when the solar system isn’t producing energy or during a power outage to keep essential appliances running. 

If you live in an area that experiences frequent power outages, a solar battery could make your home more attractive to people looking for a new home. Depending on the net metering policy in your area, energy storage can even save extra money on utility bills, another feature that could interest more potential buyers. 

Adding the details of your solar battery setup into your real estate listing, such as a Tesla Powerwall or Enphase battery, can attract potential buyers who are looking for these specific amenities

3. Electric vehicle charging port

The electric vehicle industry has taken the world by storm in the last decade, with more drivers opting for all-electric vehicles. According to data from the Department of Energy (DOE), over 3.5 million electric vehicles are registered in the U.S.

Prospective home buyers who own electric cars could be willing to pay extra money for a home with existing charging equipment, as they won’t have to deal with the headache of installing an EV charger on top of the stress of moving. 

4. Home backup generators

Depending on where you live, grid reliability could be a big concern for those buying a home. It can be a big draw if your home has a backup generator. While gas-powered generators come with their downsides, like having to source fuel and air and noise pollution, they do keep appliances running during power outages. 

5. Energy-efficient appliances

Energy-efficient appliances in the form of refrigerators, dishwashers, washers, dryers, or stoves have started to become the norm. Not only are there plenty of incentives offered for installing energy-efficient appliances, but it’s less of a commitment than bigger energy projects. 

According to Energy Star, households that use Energy Star-certified products can save $450 each year on energy bills – all while still enjoying quality, high-performing appliances. As electric bills continue to go up, home buyers are more likely to invest in energy-efficient appliances. 

6. Smart electrical panel

A smart electrical panel, such as a Lumin Smart Panel or the SPAN Panel, is essentially a circuit breaker that you can control and monitor through a smartphone app. Having a smart panel helps you to take more control over your appliances and your home’s energy usage. Some smart panels on the market can be integrated with solar or energy storage systems for ultimate flexibility and control over your energy usage. 

They’re especially worth it if you are serviced by a utility on a time-of-use (TOU) rate plan because it can be used to deactivate appliances that draw a lot of power during “peak” hours when electricity is most expensive, effectively saving the homeowner more money on electric bills. If you live in an area that offers this type of rate plan, having a smart panel will be seen as a plus to buyers. 

7. Updated insulation

Not only can good insulation help to control the temperature in your home, increase comfort, and help you save money on your electric bills, but it can come in handy when you sell your home too! If your home has weak or old insulation, a buyer could use that as leverage when asking for a price adjustment or turn away from the deal altogether. 

Insulation standards for buildings have become stricter over time. So, when a home has updated insulation, it can be seen as more modern and move-in ready. Not to mention, quality insulation is a long-term home improvement that makes a home more appealing to buyers looking for a low-maintenance property.

8. Smart thermostats

Smart thermostats are becoming more common in homes. These thermostats connect to the HVAC system in your home to give you the ability to change and monitor room temperature for ultimate comfort. Other smart thermostat features can include Google or Apple compatibility, timer settings, and more. 

Smart thermostats are very relatively cheap, normally costing only a few hundred to purchase and install, and can save you between 10% and 15% on heating and cooling costs, which is a huge bonus as electric rates rise. The convenience, modernity, and electricity bill savings of these devices will be very appealing to buyers. 

9. Energy-efficient windows

Having updated energy-efficient windows may seem like a small detail – but it’s a huge deal for those searching for a home. A surprising amount of money can be wasted on outdated, drafty windows. According to the U.S. Department of Energy (DOE), heat gain and heat loss through windows are responsible for 25% to 30% of residential heating and cooling energy use. 

There are two ways you can go about getting energy-efficient windows. You can update existing windows through caulking, weatherstripping, or another sealing method, or you can replace the windows altogether. Replacing the windows could appeal more to prospective buyers, but it is the pricier option. 

Are energy-efficient homes worth more money?

Energy-efficient homes are generally worth more money, but not in every scenario. The value the energy upgrade adds can depend on the upgrade, where you’re located, the quality of the installation, and more. 

The 2024 REALTORS & Sustainability Report found that 57% of respondents said energy efficiency promotion in listings was very or somewhat valuable, and 45% found clients were at least somewhat interested in sustainability. The report also revealed that 13% of respondents said that a high-performance home (defined as a systematic building science approach to home improvements) had an increase of 1% to 5% of the dollar value offered compared to other similar homes.

We also foresee this trend to only grow stronger as the years progress. According to the SolarReviews Gen Z and Sustainability Survey, which surveyed 400 Gen Z’s and early Millennials, 94.5% of respondents expressed at least somewhat of a level of concern for climate change and environmental issues, with over 44% reporting high levels of concern. As the newer generations begin to enter the home-buying age,  concern for the environment could become a major influence, making energy-efficient homes all the more valuable. 

Incentives can make home energy upgrades a better investment

There are a number of incentives that you can take advantage of if you want to turn your house into an energy-efficient home. 

According to data from the IRS, over 2 million 2023 tax returns claimed the Energy Efficient Home Improvement Credit, which provides a federal tax credit of up to $3,200 for qualified projects, like upgrading doors and windows, insulation projects, or getting a home energy audit done. 

Those opting for the installation of solar panels or battery storage can claim the federal solar tax credit, which is equal to 30% of installation costs. Heat pump costs can also be reduced by the Residential Clean Energy Credit. 

Aside from federal incentives, many local governments provide incentives and rebates or energy-efficient projects, making them more affordable while still adding value to your home. 

But these incentives might not be around for long! The history of energy tax credits shows that legislators won’t always renew these types of incentives, and with the new presidential administration, it seems these incentives could be under threat. If you’re considering making energy improvements to your home or installing solar panels, it’s best to start planning sooner rather than later.