UMich study finds climate change will increase the value of residential solar panels by up to 19% by the end of the century

A recent University of Michigan study found that as global temperatures increase due to climate change, the value of rooftop solar panels in residential areas has the potential to increase by up to 19% by the end of the century. By analyzing electricity demand data from more than 2,000 U.S. households across 17 cities, researchers explored how changes in electricity demand will interact with residential solar photovoltaic systems.

The study defines the value of solar as the monetary benefits related to reduced electricity bills and sales of excess electricity to a city’s power grid. 

The study found that climate change could increase the energy used by U.S. households to cool homes by 40–100%, and households with solar panels can match these needs without sending power to the grid. If a home uses solar power to meet its needs, this lowers its electric bill by the greater retail cost of electricity, but if it sends excess power to the grid, that power is credited at a lower rate.

Mai Shi, the study’s lead author and former visiting Ph.D. student at the School for Environment and Sustainability explained the significance of the study’s findings for determining property value in an interview with The Michigan Daily. Shi said climate change impacts the potential for the power output of solar panels and household cooling demands, making solar panels more equipped to meet households’ needs as the climate continues to change. 

“When we think about the value of renewable energy, like the rooftop solar PV (photovoltaics) we discuss in our study, we need to think it is not only a fixed value but a moving value because renewable energy’s value will be influenced by climate,” Shi said. “So, we quantify how climate change would impact the value of rooftop solar PV for lots of users in our study, and we show that generally, climate change would increase their (home’s) value. And, it would encourage them to deploy more solar PV panels for their home to maximize its value.”

In an interview with The Daily, Michael Craig, senior author of the study and professor of energy systems and industrial and operations engineering, explained the forward-thinking nature of the research.

“To us, the important thing was for installers of solar panels to start thinking about ‘what is the value of my technology’ not just using, not just thinking retrospectively, but thinking into the future,” Craig said.

Rackham student Sarah Dieck Wells, whose research focuses on larger-scale solar installations, emphasized the importance of considering the study’s potential implications for environmental justice and equitably expanding access to solar technology in an email to The Daily.

“Clearly, there is a benefit to expanding deployment of residential PV from a home value perspective, as well as from a resilience perspective, being able to meet future electricity and cooling demands as we transition towards electrified communities and warmer climate conditions,” Dieck Wells said. “Ensuring that all communities are set up to take advantage of these technologies, especially those that have historically been left out of development efforts like this, should probably be prioritized when it comes to taking actions to actually get these decarbonization efforts off the ground.”

U-M alum Steven Driest, former policy chair for Students for Clean Energy, spoke with The Daily about concerns regarding the power grid’s capacity to support the expansion of solar power.

“I think that when other states are considering rapidly developing rooftop solar, we need to approach it in a really smart way,” Driest said. “(Then), we don’t run into the same problem that California is currently experiencing with rooftop solar’s value being consistently diminished with the absolute surge of supply in recent years.”

Craig said these findings will be essential in expanding clean energy adoption and combating the climate crisis.

“The fact that rooftop solar becomes more valuable in the future should mean more households want to adopt it,” Craig said. “And as more households adopt it, we reduce our carbon dioxide emissions. And so there’s this nice, you know, small negative feedback loop here that is, I think, good news in terms of our fight against climate change.”

Daily Staff Reporter Greta Fear can be reached at gcfear@umich.edu.

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