Proximity to Large-Scale PV Projects Can Adversely Affect Home Prices
BERKELEY, Calif. — An analysis of the impact of construction of large-scale solar energy projects on nearby residential home values found the decline in property values varied significantly by state, but averaged out to a home sale price reduction of about 1.5% for homes within 0.5 miles of such facilities.
The study, entitled “Shedding Light on Large-Scale Solar Impacts: An Analysis of Property Values and Proximity to Photovoltaics Across Six U.S. States,” was conducted by the Lawrence Berkeley National Lab.
The lab’s findings were then published in the journal Energy Policy.
For the purpose of their analysis, the researchers looked at home transactions and the large-scale solar project footprints in six states: California, Connecticut, Massachusetts, Minnesota, New Jersey and North Carolina.
Together these states account for over 505 of the installed megawatt capacity of large-scale solar in the United States.
In all, the researchers analyzed over 1,500 solar projects and over 1.8 million home sale transactions, and like the respective home markets themselves, the results varied.
Comparing the sales transactions for homes within 0.5 miles of a large-scale solar project as opposed to being 2 to 4 miles away, the team found a 4% reduction in the sale price in Minnesota, a 5.6% reduction in New Jersey, and a 5.8% reduction in sale price in North Carolina.
However, in the remaining three states, California, Connecticut and Massachusetts, they found no statistically significant effects on the home sales price.
Using data from all six states, Berkeley Lab identified a home sale price reduction of 1.5% for homes within 0.5 miles of a large solar array compared to homes 2 to 4 miles away.
For the mean selling price in the sample of roughly $400,000, a 1.5% diminution equates roughly $6,000.
When the Berkeley Lab researchers accounted for the prior land use, the population density in the area of the sold homes and the size of the solar project, the group found adverse home sale price impacts only found to be statistically significant for projects on previously agricultural land, projects near homes in rural areas (low population density) and homes near the largest solar projects in the data set (roughly 12 acres, equating to between 4 and 7 MW).
Berkeley Lab did not find evidence of statistically significant effects on home sale prices near large solar projects developed on greenfield, brownfield and mixed land use developments.
Further, homes in urban (high population density) or urban cluster (medium population density) regions were not found to be impacted significantly.
Finally, Berkeley Lab determined there were no effects on sale prices for homes near large solar projects with an area smaller than 12 acres.
The researchers note that their analysis did not take into consideration such factors as setbacks or landscaping features that could play a role in nearby property valuation.
In addition, they said, the study does not examine the attitudes or sentiment of the neighboring communities, or of home sellers and buyers, toward the solar projects, which could influence property valuations near solar projects.
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.
As a result, the Berkeley Lab researchers recommend that future researchers look into these issues.