Top Benefits of Solar for Real Estate Developers in 2023

Eco-friendly buildings are becoming a lot more popular these days. The market for green buildings in the United States alone was worth $83 billion in 2021 and it is growing exponentially.

We have talked about the ways that construction companies are becoming eco-friendlier. However, it is clear that larger real estate developers are looking for ways to reduce their carbon footprint at a larger level.

One of the ways that many real estate developers are going green is through investing in solar energy. This is going to have a huge impact on the future of the industry.

How Real Estate Developers Are Turning to Solar Energy to Lower their Carbon Footprint

When it comes to real estate investing and developing, there are a number of steps that you can take to improve your return on investment. One of the most important, however, is also among the easiest: investing in solar energy. This is one of the ways that real estate developers and construction companies are going green.

There are a number of key reasons why, if you haven’t already started to consider solar energy for your real estate investments in 2023, now would be an excellent time to start. 

Why Solar Matters for Real Estate Investors

Over the last few decades, the real estate industry has been moving towards sustainable building for a variety of different reasons. Even when you’re not talking about rehabbing an older building to be more environmentally friendly, sustainability almost always leads to lower overall operating costs, improved resale values (sometimes dramatically so), and higher occupancy rates across the board.

Taking advantage of solar power is one of the biggest ways they are going green. The global market for solar was over $167 billion in 2021 and it is growing year after year.

Lower operating costs are important as they go a long way towards reducing the amount of time it would take to see an adequate return on one’s initial investment. This is in addition to perks like the Solar Investment Tax Credit, which currently sits at 26% (although it will eventually be phased out for residential solar projects). 

Improved resale value is also always a priority for investors. According to the NY Times, it has been estimated that for a residential home outfitted with a standard solar panel system, you can potentially get up to $15,000 more on average when it comes time to sell. This is in addition to any other modifications that you make with an eye towards increasing the resale value of the property. The same concept extends into the world of commercial real estate, too.

Even if you’re not planning on selling and want to continue to rent out a residential or commercial unit with an eye towards creating a long-term revenue stream, solar panels offer a major boost. Because of the savings that tenants will enjoy on their utility bills, your property instantly becomes more attractive. It’s also a viable way to separate yours from every other similar piece of property on the market. It becomes a legitimate competitive advantage in every sense of the term.

Lastly, new construction policies in places like California are changing the landscape for solar energy. 

“New construction policy and consumer demand are pushing for solar to be integrated into new projects – particularly for all multi-family housing,” explains James Rector , Director of Solar Lending at Sunwest Bank. 

Overall, solar energy brings with it a wide array of benefits that cannot be ignored for real estate investors. Going above and beyond the fact that you get to do your part to help preserve the environment, you make your properties more attractive to tenants and more profitable at the same time. It truly is a perfect storm in the best possible way and it’s one that will only continue to get more important as time goes on, and as policies continue to evolve.