Renewable energy rising: Property prices and insurance

As a sun-drenched and wind-swept land, Australia is uniquely placed to take advantage of the global shift towards clean energy.

Understandably, like any new development, communities are asking what this means for property prices and insurance. These are important questions.

Do large-scale renewable energy projects negatively affect nearby property values? 

International studies show that negative impacts of large-scale renewable energy projects are typically small, temporary and localised to properties within 1-2kms of the project. Negative effects typically peak within three years of construction and recover within the next seven years¹. Where there are differences in impact sizes across different studies, research has found that it tends to be due to differences in landscape, view, property types, local sentiment, and size of the project².

Local data suggests that the Australian experience is not significantly different. It’s useful to note that the types of locations typically chosen in Australia for large scale renewable energy farms tends to be rural or regional in nature, compared to the northern hemisphere where projects are more likely to be built near urban centres. Research in New South Wales suggests that there are no negative impacts to property values in rural areas near wind farms³.

Can renewable energy projects increase property values? 

Large-scale projects can actually boost local economies, through increased jobs, improved infrastructure and community facilities. This in turn impacts local property and land values, with many regional and rural areas experiencing increased demand for local properties. 

A 2022 market report found that median property prices in six New South Wales and Victorian local government areas with major renewable projects actually rose significantly – between 35-51% over five years. These results show how renewable energy projects can lead to population growth, wage price growth, lower local unemployment and higher rental yields, all of which is good news for local property values⁴.

During the operational period, the land hosting renewable energy often recovers from grazing and cropping, leading to increases in soil and biodiversity values, which can increase property values. Landholders who host renewable energy projects have also spoken about it eliminating the need to sub-divide their land in retirement as it provides ongoing non-farming income.