Does a Standby Generator Increase Home Value?

Thinking about buying a generator, but not sure what kind of return you’re likely to get on your investment? You aren’t alone, and a Google search will give you answers varying from “Not at all” to “You’ll double your house’s value!” No wonder you’re probably feeling confused.

Of course, like most questions, the answer to this one is, “It depends.” Here’s a breakdown of the factors that will determine whether a standby generator will increase the value of your home, and by how much.

In most cases, having a standby generator is a perk, so your home’s value will be increased at least a little bit. Whether resale value will increase substantially will depend on other factors that might not be under your control – namely, the frequency and severity of power outages where you live.

Providing power in case of an outage is the home standby generator’s sole purpose. When the power goes out, the generator kicks in, allowing you and your family to continue living your life normally (or almost normally) while the power company gets things sorted out.

So, the value that a standby generator adds to your home will depend on how useful it is. If the electricity where you live goes out frequently or for long periods of time, having a standby generator will be an invaluable advantage for the homeowner.

The likelihood of suffering from power outages depends on external factors, like the frequency of extreme weather events in your part of the country. In many places, severe and hazardous weather is becoming less unusual, and power outages more common.

The type of power lines where you live may also affect outage frequency. Overhead lines that are exposed to the elements are more likely to go down than those that are buried underground. If you live in an area with exposed power lines and frequent storms, power outages will likely be more frequent.

And if you live in a rural area with relatively few homes, restoring power there might be a secondary priority for the power company. These factors make having a standby generator more necessary and valuable. If the above statements accurately describe the place where you live, then it is probable that having a standby generator will substantially increase the value of your home. If you are rarely affected by power outages, then a standby generator will still be nice to have, but less likely to be perceived as a “need” by home buyers.

If you are looking for a number, then a 2018 report by Remodeling Magazine predicted that installing a standby generator would increase home value by 54% of the generator’s cost, on average. But keep in mind that coming up with an “average” return on investment is very difficult, given the various ways that a generator can save you money down the road and the intangible allure that it can give your house.

——

Another important factor regarding how a standby generator can increase value is whether the generator has been installed “legally.” Some municipalities have rules about generator installation, which may require you to fill out extra paperwork and get approval from the local authorities. An “illegally” installed generator could also nullify your home insurance policy if the insurance company determines that the generator played a part in causing damage.

A standby generator that complies with all local regulations can augment the resale value of your house by three to five percent, according to Consumer Reports. A different report by Remodeling Magazine, from 2014, suggested that installing a generator could provide up to a 150% return on investment, if done properly.

To ensure that you get the best value out of a generator, it’s best to have a professional electrician assess how much power your standby generator will need to provide and where it should be installed. They can advise you on what size and which model will be appropriate.

An alternative to the home standby generator is a portable generator. Portable generators are less expensive and less likely to require licensing than a standby generator, although they don’t provide nearly as much power nor switch on automatically. In the event of a power outage, you would need to set up the portable generator outside of your house, which would allow you to power a handful of appliances until power is restored.

And of course, a portable generator won’t increase your home’s value. If you’re looking for something that will allow you and your family to continue life as if the power hadn’t gone out and possibly increase the value of your home in the process, a standby generator is the only answer.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.