Understanding the Solar Home Price Premium: Electricity Generation and "Green" Social Status

30 Pages Posted: 11 Jul 2011 Last revised: 29 Apr 2015

See all articles by Samuel R. Dastrup

Samuel R. Dastrup

Abt Associates, Inc.

Joshua Graff Zivin

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Dora L. Costa

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Matthew E. Kahn

University of Southern California; National Bureau of Economic Research (NBER)

Date Written: July 2011

Abstract

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.

Suggested Citation

Dastrup, Samuel R. and Graff Zivin, Joshua and Costa, Dora L. and Kahn, Matthew E., Understanding the Solar Home Price Premium: Electricity Generation and "Green" Social Status (July 2011). NBER Working Paper No. w17200. Available at SSRN: https://ssrn.com/abstract=1882168

Samuel R. Dastrup (Contact Author)

Abt Associates, Inc. ( email )

55 Wheeler Street
Cambridge, MA 02138-1168
United States

Joshua Graff Zivin

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dora L. Costa

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matthew E. Kahn

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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