A question we’re hearing more and more is do wind and solar projects impact the value of nearby properties and, if so, by how much? The answer depends on many factors, and the research on this topic is limited and provides mixed results.
What Makes Wind Different Than Solar?
The differences between wind and solar projects are obvious. Wind farms are much more visible than solar projects and can generally be heard from farther away. A earlier this year found that wind turbines have a visibility radius of 8.7 miles. It seems logical that land use of surrounding properties also matters, whether it be residential, recreational, agricultural, or industrial.
What Does the Research Show?
Research findings are mixed and it’s difficult to say exactly how much these projects impact property values, if at all. Proximity matters, but visibility matters even more. Current studies group properties (usually houses) by distance from utility-scale wind or solar projects.
Solar projects seem to have little to no impact on the value of nearby properties. However, “nearby” could mean within three miles, as is the case in a study published by Real Property Analytics in 2023 . In that study, the researchers found no evidence of negative market impacts for nearby residential properties. I am not aware of any studies that examine the impact on neighboring properties (within view of such projects).
Wind projects have been found to negatively impact nearby properties. The aforementioned AgriLife report examined two scientific studies on this matter. The studies found an increasing negative impact based on proximity, with the closest grouping being within 1.24 miles. They summarized the findings as follows:
- Distance Matters: The closer a property is to a wind farm, the greater the potential for a value decrease.
- Visibility is Crucial: Properties with direct views of wind turbines experience more significant value reductions.
- Turbine Size and Number: The number and size of turbines can also influence the impact on property values.
What Are Landowners and Brokers Saying?
I have spoken to dozens of landowners (primarily rural land and rural homesteads), and the theme is consistent: visibility matters; it matters a lot. This sentiment is in agreement with the research findings. The explanations given by landowners are also consistent with the long-established appraisal principle of externalities. As stated in The Appraisal of Real Estate, 15th edition, “the principle of externalities states that factors external to a property can have either a positive or negative effect on its value.” Additionally, “externalities may refer to the use or physical attributes of properties located near the subject property.” Changes in the views from properties because of nearby wind or solar projects certainly have the potential to impact the value of such properties.
Beauty is in the eye of the beholder. A real estate market is composed of multiple “beholders.” Brokers indicate that the robustness of a market matters. This includes the inventory of available properties and the quantity of potential buyers. While some potential buyers may be entirely turned off by the view of one or more wind turbines, for example, there may be other buyers who are undeterred. So it stands to reason that in slow markets, when the pool of prospective buyers shrinks, such considerations may become more impactful.
What Are The Implications?
It’s difficult to estimate the impact on value as a rule of thumb. Every property is different, and the proximity and view from each project is different. Also, as stated above, market conditions matter. However, licensed appraisers with relevant experience can provide a reliable opinion of value, including an estimate of the impact of externalities or external obsolescence. About what qualifies as “relevant experience,” I would include land use. For example, crop land is likely to be impacted differently than residential or homestead properties. Impacts on recreational land, including hunting and wildlife management properties, may also differ.
More Research Needed
Although the questions often lump wind and solar together, they must be considered separately due to significant differences in visibility, noise, and other factors. Wind turbines have much more widespread potential to negatively impact nearby property values. However, as one landowner told me, when the view from your porch changes dramatically from natural beauty to acres of solar panels you have a big problem.
More research is needed to better understand the relevant factors that influence values and the degree to which these factors impact values. One challenge, of course, is finding a large enough group of properties within view of a utility-scale wind or solar project and a nearby control group that is outside of the view area. Nonetheless, it is reasonable to conclude that such utility-scale projects can negatively impact the value of nearby properties. Determining the specific impact on your property will likely require the expertise of a qualified appraiser.
Views expressed on The 338 are those of the authors and do not imply endorsement by the Texas Real Estate Research Center, Division of Research, or Texas A&M University.
- Study of Residential Market Trends surrounding six utility-scale solar projects in Texas. Erin M. Kiella, PhD; Jennifer N. Pitts, MAI, CRE; & Chris Yost-Bremm, PhD. June 29, 2023 [↩]
- The Appraisal of Real Estate, Fifteenth Edition. Page 28. Appraisal Institute. 2020. [↩]
