House price premium associated with residential solar photovoltaics and the effect from feed-in tariffs: A case study of Southport in Queensland, Australia

Haifeng Lan, Zhonghua Gou and Linchuan Yang

Renewable Energy, 2020, vol. 161, issue C, 907-916

Abstract: This study aims to contribute a regional experience of establishing a credible estimation of the house price premium associated with solar photovoltaics (PV) and to reveal the change of the premium in response to the changing feed-in tariffs (FiTs). This paper used Python to crawl records of sold residential properties in Southport, Queensland from 2008 to 2018. An experimental group of 316 solar PV houses and a control group of 228 non-solar PV houses were extracted for analysis. Using the hedonic approach, the study found that the gross premium was 4.3% of the average house price; the average net premium (exclusive of the PV installation cost) was 21,403 AUD when the FiT was at 44 cents/kWh; when the FiT dropped to 8 cents/kWh, the gross premium fell to 2.4%, and the average net premium dropped to 5600 AUD. The study shows that a solar PV house does enjoy a premium in terms of property value and indicates that a higher solar rebate and subsidy leads to a higher premium. It is commendable to provide some financial incentives to keep the premium within a reasonable range to encourage solar PV adoption.

Keywords: Price premium; Solar photovoltaics; Real estate market; House price; Feed-in tariff (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:161:y:2020:i:c:p:907-916

DOI: 10.1016/j.renene.2020.07.085

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