The Market Price Premium for Residential PV Plants

Real estate literature investigates how housing attributes are capitalized into home prices. In this respect, photovoltaic (PV) plants installation can be viewed as a quality improvement in the home. Domestic PV plants are in fact usually meant to improve buildings energy efficiency and increase savings on energy bills thanks to self-consumption of PV energy. Regardless the continuous growth of the residential solar home market, there is little direct evidence on the capitalization effect of PV systems on real estate assets. Specifically, there is a lack in the Italian literature on the market price premium for solar homes. The aim of the paper is contributing to fill this gap. In detail, we implemented a contingent valuation approach to determine the market price premium for solar homes. Our results show that individuals are willing to pay an additional price for a solar home, and the average market price premium is equal to 2.69% for monocrystalline PV plants and equal to 3.08% for polycrystalline PV plants respectively.