Rise of Solar Powered Homes

The count of homes powered by photovoltaic (PV) systems is rising. And while solar-powered homes remain a small share of the total housing stock, that share is growing through a combination of policy incentives and homebuyer preferences.

Among the top features homebuyers are seeking in a home is energy-efficiency. In fact, in a 2012 NAHB study of homebuyer preferences, energy-efficiency elements ranked as top items sought in a home.

Helping to encourage such market preferences, state/local governments, along with the federal government, offer a number of tax and rebate incentives that reward investment in energy-related residential features. For example, in 2005 Congress established a 30% tax credit for power production property installed in a home, including solar panels. Also known as the section 25D tax credit, this program promoted a total of $1.5 billion in solar property in approximately 100,000 homes in 2010, according to IRS data.

And thanks to data from two studies from the Lawrence Berkeley National Laboratory (“Tracking the Sun VI” and “SEIA/GTM Research U.S. Solar Market Insight 2012 Year in Review”), we can examine the state-level counts of solar-powered single-family homes.


The map above charts the share of the single-family housing stock in each state that possessed PV systems as of 2012. States in white did not have a specific breakout, but in general these states represent small totals – no more than 3% of the national total of solar-powered homes.

The largest count of solar-power homes is in California, with a total of more than 143,000 houses. Arizona is second with almost 24,000, and both Hawaii and New Jersey have more than 15,000 homes with PV systems.

Clearly, homes in states located in the West are more likely to have installed PV systems. Interestingly, another concentration lies in the Northeast and Mid-Atlantic regions, where perhaps higher average incomes allow homebuyers to achieve the housing preferences identified above. Additionally, the state of New Jersey is worth noting as having higher share due to the combination of state renewable energy rules and monetary incentives.

Another factor determining regional patterns is the local cost of power. Areas of the nation with relatively higher power costs, such as the Northeast, make solar and other residential power production property a more attractive option.

The future of solar power for housing remains bright in the short-run. The section 25D credit is scheduled to remain in law until the end of 2016. And increasingly builders are selling homes with solar power features or the infrastructure required for future installation.

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