Rooftop solar is a vital home asset. Photo: Huglo Solar.
The installation of a home solar power system can increase the value of an ACT property by 2.1 per cent or $23,285, according to a new report from property data company Cotality.
The findings, from Watt’s it Worth: Quantifying the value of solar and energy efficiency ratings in real estate, highlight how energy performance is becoming a key factor in how properties are appraised, financed and sold.
They probably come as no surprise to homeowners and real estate agents in the ACT, which is the only jurisdiction in the country with mandatory energy rating disclosure at the point of sale or lease.
But this ability to consistently measure and quantify energy performance data marks a national turning point, says Cotality, and others are following the ACT’s lead.
The NSW Government has announced a phased rollout of Home Energy Ratings, and the National House Energy Ratings Scheme (NatHERS) is expanding to cover existing homes.
Nationally, rooftop solar can add 2.7 per cent or $23,107 to a home’s value compared with those without, says the report, which analysed more than six million homes and reveals a clear link between energy-efficient upgrades and property value.
For regional NSW, the rate was 3.2 per cent, or $23,567.
The estimated energy efficiency rating, a metric that has been historically absent from valuation models, is also boosting home values.
The analysis showed that each additional estimated NatHERS star rating was linked to a median uplift of 1.3 per cent in estimated home value nationally, or about $10,560.
In the ACT, this amounted to 1.4 per cent, or $12,270, and in regional NSW, 1.2 per cent or $7909.
With almost 70 per cent of Australia’s housing stock sitting below four stars, these underperforming homes represent both an upgrade opportunity and a growing source of exposure for owners and investors.
Cotality Senior Director, Banking and Finance, Tom Coad, says the findings show that energy and efficiency upgrades have their own inherent value and are seen as a buyer attraction in the market.
“They are delivering not only long-term energy bill savings and comfort, but also measurable price premiums at a time when cost-of-living concerns are top of mind for Australians,” he said.
Mr Coad says energy efficiency ratings are now becoming a significant factor in the national market.
“As the housing market continues to gain value and expectations for comfort, ongoing affordability, and sustainability evolve, the findings from this report highlight a broader shift in how value is perceived, and signal a future where performance is priced as prominently as postcode,” he said.
The report also quantifies solar coverage, with the national figure sitting at 29 per cent.
The percentage of ACT homes with rooftop solar is 29 per cent, according to the Geoscape data, but other estimates are higher.
The ACT Government calculated in 2023 that 30 per cent of Canberra households had rooftop solar systems, while the Australian Photovoltaic Institute pegs the figure at 31.1 per cent, ranking it fourth among Australia’s states and territories.
Cotality says coverage is 23 per cent in regional NSW but exceeds 40 per cent in cities like Perth, Adelaide and Brisbane, while Hobart, regional Victoria and regional Tasmania fall below 20 per cent.
In many new developments, rooftop solar is now included as part of the standard building package – further embedding energy performance into the housing market, it says.
The report states that these findings provide a clearer benchmark for owners to assess the value of upgrades that reduce energy use and improve comfort.
For lenders, performance data may become increasingly relevant to environmental, social and governance reporting and sustainability-focused products.
The report states that developers and real estate agents are starting to respond to buyer preferences, incorporating energy-efficient features into their design and marketing strategies.
It argues that the evidence builds a stronger case for the government for mandatory disclosure of energy ratings, upgrade incentives, and a more consistent national approach.
The report concludes that energy performance should be a core part of how homes are built, bought and valued.
“The ACT’s long-standing disclosure rules prove that trusted ratings influence buyer behaviour and pricing,” it says.
