How Whole House Backup Generators Affect Home Value

Before making any home upgrade, it's essential to consider how it will impact your home's value and appeal to potential buyers when you are ready to sell. Below, we break down the pros and cons of whole-home backup generators and what you need to know if you are selling or buying a home with this upgrade installed.

Whole House Backup Generators

Whole-house generators are connected to the home's electrical system and a fuel source, like natural gas lines or propane tanks. In the event of a power outage, the generator is notified through the electrical system and automatically kicks on to power the furnace, lights, kitchen appliances, TV, etc. The generator will automatically turn itself off as soon as power is restored.

Whole-home generators, also called standby generators, differ from portable generators in that they cannot be moved. Therefore, they become fixtures and stay with the home when it is sold.

Benefits

The main benefit of whole-house backup generators is that they provide homeowners with instant power during outages, which can last for hours or even days as crews work to restore power in the area.

When power outages last for a short period, a generator can provide convenience and comfort and prevent hassles, like food spoiling in the fridge. When outages last longer or result from an extreme weather event, whole-house generators can provide safety, protection, and disaster prevention.

Generators can keep your furnace running in freezing cold temperatures during winter storms and your air conditioner running during heat waves that knock out electricity. In those situations, generators can be lifesaving for households.

Another benefit of a whole-house generator is that it can protect your home's electrical systems from the risks associated with sudden power loss and restoration, including damage to sensitive electronic devices and appliances.

Having a whole-house generator provides peace of mind that your home is equipped with a reliable backup power solution, which can make it more desirable to buyers and increase the home's value.

Cons

The only con to having a whole-house backup generator is that it is expensive. Therefore, it comes down to whether you can afford its upfront and ongoing maintenance costs and whether your household would benefit from it during short-term or long-term power outages.

For instance, a generator might be worth the investment for homes with small children, elderly, or other compromised individuals who depend on an oxygen tank, CPAP machine, etc. If you live in a hurricane-prone area, like the Texas Gulf Coast, that is another factor to consider. It depends on how at-risk you and your family might be without power for an extended period and if you can afford its associated costs.

Costs

The total cost of a whole-home backup generator depends on several factors, including the make, model, fuel source, capacity, and other features.

According to Centerpoint Energy, Houston's electric and gas utility company,a standby generator for a 2,000 square-foot home usually requires a 16-18 kW generator, which costs approximately $8,500 to $12,000 to install. That includes having a professional Houston generator installer running 6 feet of electric and gas lines, permits, and licensing. If you need more than 6 feet of lines run, the price will increase. You will also need to pay for fuel and maintenance after installation, increasing costs more.

Does it increase home value?

According to various sources, a whole-house generator can increase your home's value by up to 3% to 5% and provide up to a 150% return on the investment..

When you consider the damage your home can accumulate during a power outage, especially to appliances, devices, and equipment, a generator can save homeowners a lot of money on costly repairs or replacements. Therefore, a generator can also increase home value simply by protecting high-cost items in the home.

Selling a home with a whole-house backup generator

Having a backup generator can be a bonus when putting your property on the market, especially if the home is located in a severe weather-prone region, as it provides homebuyers with peace of mind.

If you install a whole-home generator and then immediately sell your home, you can expect the highest return on investment. But if you sell your property 10 years after installing the generator, the generator's value will depreciate, as it is close to the end of its lifespan.

To keep the value of your standby generator as high as possible, it's essential to schedule yearly maintenance for it. An annual tune-up ensures the generator will work properly when needed and helps retain more of its purchase value.

When selling your home, be sure to collect all documentation related to the purchase, installation, warranties, and maintenance of your whole-house generator so that you can share these records with the buyer.

Buying a home with a whole-house backup generator

Whole house generators provide seamless backup power during outages, ensuring uninterrupted operation of home appliances, electronics, and systems. This convenience, comfort, and enhanced safety and security appeal to buyers who prioritize a reliable power supply.

Whole-house generators, especially those running on alternative fuel sources like natural gas or propane, also provide a sense of energy independence, which is attractive to buyers who value self-sufficiency.

If you are considering buying a home with a standby generator, you will have to consider its related costs to determine whether it will fit within your budget.