Effect of Solar Panels on

Home Prices

Alannah Ito, Christian Herr, Justin

Toguchi

Our research question examines the housing market in Orange, CA and asks:

How does having solar panels affects a home’s sold

price?

Through this, we can determine how much the home-buyer was willing to pay during the time of his purchase for a house with solar panels

already installed compared to a house without solar panels.

ABOUT OUR TOPIC…

Collected from Zillow.com for homes in Orange, CA.

111 observations: 51 solar and 60 non-solar homes

Dependent variable: last sale price of house

Independent variables: age of house, number of bedrooms and bathrooms, square footage of house, lot size, if the house has solar panels, pool, other green technology, and average rating of nearby schools

Data

DATA

REGRESSION RESULTS

After the regression, we found that having solar panels does not increase prices of homes in Orange, CA.

Having solar panels actually decreased the value of the home by $17,615.40. Additionally, being assigned good schools decreased the price by $9,411.83.

The only significant variables that positively affected the price were the square footage of the house and the lot size.

Adjusted R-square is 78%, which means it is a pretty good fit for the model.

There are plenty of ways to improve, such as increasing the number of observations to the total number of homes in Orange.

Orange, CA is also a conservative city, thus the need or demand for green energy is not as appealing, thus brining the price down.

CONCLUSION