Installing rooftop PV panels has been the most sustainable method to reduce our carbon footprint and save on energy bills. It is also said that solar panels could raise house value. But a recent study revealed that it can be up to 7.1%.
Scientists from Swansea University and the University of Birmingham, United Kingdom, using a range of machine learning (ML) techniques, discovered that solar panels could raise the value of houses by 7.1% in the UK. This analysis was based on the property data derived from Zoopla, a leading UK property listing provider. The government’s land registry from 2021-2018 provided data on the price paid for the property.
Overall, this information was collected to assess whether properties with solar systems have higher selling prices in the British real estate market or not. The meta-learner algorithm was run on around 5 million observations and property data by Zoopla.
Scientists categorized the house listings with or without solar production with keywords like PV panel and solar. Then this was matched with 80% of the listings with real PPD. With further analysis, differences across years, regions and prices were identified along with the declining trends in returns to solar panels over the years. It was observed that Humber, Wales, and Yorkshire offer the highest returns, followed by southwest and northwest regions.
The 5 meta-learner algorithms used were:
- DR-learner
- R-learner
- S-learner
- T-learner
- X-learner
Generally, meta-learners combine multiple models or base learners and improve predictive performance. According to the researchers. S and T-learners are simplistic as they use base learners. Whereas the other 3 are more sophisticated as they use additional information.
But UK households sitting on 880 million unused electrical items worth £1 billion.
Lastly, to check the credibility of the results, proposed model and traditional models were compared. They were hedonic pricing models and coarsened exact matching (CEM). The Hedonic model estimates the extent of each factor affecting the property’s market price. CEM uses observational data only. As after this research, it is concluded that solar panels could raise house value in UK by 7.1%. Moreover, the Hedonic model showed a premium of 5.6% and CEM of 3.5%.
Source: Returns to solar panels in the housing market: A meta learner approach
