Do Large-Scale Photovoltaic Projects Impact Sales Prices of Close-By Homes?
New Berkeley Lab study finds evidence of relative decreases in home sale prices within 0.5 miles of large-scale photovoltaic projects in three of six states studied.
The construction of large-scale photovoltaic projects (LSPVPs), defined here as ground-mounted photovoltaic generation facilities with at least 1 megawatt (MW) of direct current generation capacity, can be linked to a number of possible local economic impacts, including job creation, tax revenue, local landowner income, and changes to home sale prices to name a few. Many of these economic impacts remain understudied and/or undiscovered; in this study, we partly fill that gap by evaluating the impact of LSPVP development on home sale prices.
The new Lawrence Berkeley National Lab analysis “Shedding light on large-scale solar impacts: an analysis of property values and proximity to photovoltaics across six U.S. states” compiles a unique dataset that includes home transactions and LSPVP footprints in California (CA), Connecticut (CT), Massachusetts (MA), Minnesota (MN), New Jersey (NJ), and North Carolina (NC), which together account for over 50% of the installed MW capacity of LSPVP in the U.S. Our analysis includes over 1,500 LSPVPs and over 1.8 million home sale transactions.
The study, published in Energy Policy in open-access format, is available here: https://emp.lbl.gov/publications/shedding-light-large-scale-solar. The authors will host a webinar covering the results of the study on March 22nd at 12 PM Eastern / 9 AM Pacific. Register here: https://lbnl.zoom.us/webinar/register/WN_7c4j1nGnRuKnvbYYmJrXyw (link is external)
Our analysis finds that the effects of large-scale solar projects on home sale prices depend on many factors that are not uniform across all solar developments or across all states.
For homes within 0.5 miles of a LSPVP compared to homes 2-4 miles away, we found a reduction in home sale prices in MN (4% reduction), NC (5.8%), and NJ (5.6%) and no statistically significant effects in the other three states (CA, CT, and MA). Using data from all six states, we identified a home sale price reduction of 1.5% for homes within 0.5 miles of a LSPVP compared to homes 2-4 miles away. For the mean selling price in our sample of roughly $400,000, a 1.5% diminution equates to roughly $6,000.
Certain cohorts of LSPVP projects were found to have either higher or lower sale price effects within 0.5 miles than the sample-wide average, or no statistically significant effects at all within that distance. Those heterogeneous impacts and their implications are summarized in Figure 1 and discussed briefly below.
Only LSPVPs developed on previously agricultural land, LSPVPs near homes in rural areas, and larger LSPVPs were found to be linked to adverse home sale price impacts within 0.5 mile.
When we account for the prior land use of LSPVPs, the population density in the area of the sold homes, and the size of LSPVPs, we find that adverse home sale price impacts are only found to be statistically significant for LSPVPs on previously agricultural land, homes in rural areas (low population density), and near LSPVPs with an area larger than the median area of LSPVPs in our dataset (roughly 12 acres, equating to between four and seven megawatts).
We did not find evidence of statistically significant effects on home sale prices near LSPVP developed on greenfield, brownfield, and mixed land use developments. Further, homes in urban (high population density) or urban cluster (medium population density) regions are not found to be impacted significantly. Finally, we do not find effects on sale prices for homes near LSPVPs with an area smaller than the median area of LSPVPs in our dataset (12 acres).
A fuller understanding of the economic impacts of LSPVPs, and the cause of the impacts detected in this study, will require a variety of research methods, sites, and scales.
This study contributes to a growing body of evidence on the impacts of LSPVPs on residential home sale prices, using a unique dataset of LSPVP footprints and extending the analysis to geographies that have not, to our knowledge, been studied before. Although the analysis provides fairly precise measurements of correlations likely with little bias, determining the causation of these impacts is beyond the scope of this work. The analysis did not include consideration of site features or site design, for example setbacks or landscaping features, which could play a role in nearby property valuation. Further, the study does not examine the attitudes or sentiment of the neighboring communities, or of home sellers and buyers, toward the LSPVPs, which could influence property valuations near LSPVPs. Finally, the study did not examine broader economic impacts or benefits to host communities from large-scale solar projects, which might positively impact home sale prices.
The heterogeneity of our results also indicates the importance of place and project-specific assessments of LSPVP development and policy practices. This heterogeneity may point to the importance of studying new siting strategies for rural, large, or agricultural installations – for instance, the co-location of agricultural land uses and solar development.
We thank the U.S. Department of Energy’s Solar Energy Technologies Office (link is external) for their support of this work, as well as the numerous individuals and organizations who generously provided data, information and reviewed our study.
Article and Graphs Courtesy of the Berkeley Labs, Electricity Markets & Policy,
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