Introduction: Do Solar Panels Increase Home Value?
Do solar panels increase home value? This is one of the most common questions among homeowners considering a switch to solar energy. According to a highly-cited Zillow study, homes with solar panels sell for 4.1% more on average—meaning a $500,000 home could fetch a $20,500 premium simply by going solar. In today’s real estate market, energy-efficient features are in high demand: over 80% of buyers now say that energy savings and green upgrades are top priorities when choosing a home.
This comprehensive guide explores the question, “do solar panels increase home value,” by breaking down the data, explaining the variables that matter, and sharing expert and homeowner perspectives. You’ll learn about the impact of solar panels on appraisals, the factors that influence your return on investment (ROI), and the best ways to maximize both your home’s market value and long-term savings. By the end, you’ll understand why solar panels can be a smart way to boost your home’s worth—especially if you make the right decisions about ownership, location, and system quality.
How Solar Panels Boost Property Value
Solar Panels and Appraised Home Value
Multiple studies show that solar panels have a direct positive impact on property value. When appraisers evaluate homes, they factor in the presence of owned solar systems—often treating them as a significant home upgrade, similar to a renovated kitchen or a new roof. In states like California, owned solar panels can add up to 5-10% to a home’s value, with increases as high as $79,000 for high-end properties.
What the Studies Say: Solar Home Value Increase
Let’s look at recent research and national averages:
| Study/Source | Value Increase | Example on $500k Home | Year |
|---|---|---|---|
| Zillow | 4.1% | $20,500 | 2019 |
| SolarReviews | 6.9% | $34,500 | 2025 |
| California Study | 5-10% | $25k-$50k | 2025 |
- Zillow (2019): Homes with solar panels sell for a 4.1% premium nationwide.
- SolarReviews (2025): The average premium is 6.9% for homes with solar, based on the most recent MLS data and real estate agent surveys.
- California-Specific Study: In solar-forward states, values climb even higher, with some homes seeing a 5-10% boost.
Why Buyers Want Solar Homes
Solar panels are attractive to buyers for several reasons:
- Lower utility bills: Homes with solar panels can save owners $1,000 or more per year on energy.
- Eco-friendly credentials: Solar panels signal a commitment to sustainability, which appeals to today’s environmentally conscious buyers.
- Faster sales: Homes with solar panels sell 13.3% faster on average, according to SolarReviews.
- Future-proofing: With energy costs on the rise, buyers want homes that offer long-term savings.
In short, the answer to “do solar panels increase home value” is a clear yes—especially when you own your system outright and live in a solar-friendly area.
Key Factors Influencing Value Increase
System Ownership: Owned vs. Leased Panels
Ownership is the most important factor in maximizing your solar panel home value increase. If you own your solar system (paid upfront or through a loan), you’ll see the largest value boost when selling your home. Leased systems, however, can be a turn-off for buyers. Leases are often tied to the homeowner, not the property, and may require new owners to assume the contract, which can complicate or even jeopardize a sale.
Location and Electricity Rates
Where you live makes a big difference in how much value solar panels add:
- High electricity cost states: Places like California, New Jersey, and Massachusetts see increases of 9.9% or more, thanks to high utility rates and strong solar incentives.
- Sun-rich regions: Areas with more sunshine generate more energy savings, speeding up ROI and making solar homes more attractive.
- Local solar adoption: If solar is common in your area, buyers are likely to expect and value these systems. In emerging markets, solar panels can set your listing apart.
System Size and Age
- System size: Larger solar installations (in kW) generally add more value, as they generate more savings.
- Newer panels: Newer systems with longer warranties are more attractive to buyers. Panels installed within the past 5-10 years have the greatest impact.
Local Real Estate Market Trends
The local real estate market also plays a role:
- Green home incentives: Many states offer property tax exemptions for solar, which can make homes even more desirable.
- Net metering: In areas with strong net metering policies, buyers know they can sell excess electricity back to the grid, enhancing the appeal.
Pros and Cons of Solar Panels for Home Value
Pros:
- Tax exemptions for solar in 29+ states
- Net metering policies increase buyer savings
- Reduces utility costs, raises home value
Cons:
- Leased systems may lower buyer interest
- Some regions see property tax increases, though this is often offset by exemptions
ROI Example: Calculate Your Payback
Suppose you install a $30,000 solar system. If your home value rises by $20,000 (4.1% of $500,000) and you save $1,000 per year on electricity, your investment is recouped within 6-10 years. After that, you continue to benefit from both higher resale value and ongoing savings.
Real Estate Agent and Appraiser Perspectives
What Realtors and Appraisers Say About Solar Homes
Real estate professionals agree that solar panels, when owned, can be a strong selling point. Agents report that solar-equipped homes in their markets often sell for $680,000 or more, compared to similar properties without solar.
Solar Panels and Appraisals
Appraisers follow guidelines from the Appraisal Institute and Fannie Mae, which instruct them to account for solar panels as a significant home improvement—provided the homeowner owns the system. The value is determined by factors like system size, age, and local energy costs.
Addressing Common Myths
Myth: “Solar homes are harder to sell.”
Reality: National sales data shows that homes with solar panels actually sell faster and for more money than their non-solar counterparts.
Real-World Example
A recent Arizona listing with an owned solar system saw its online views triple and sold above asking price, thanks in part to targeted marketing that highlighted the home’s solar savings and eco-friendly appeal.
Costs vs. Long-Term ROI
The True Cost of Going Solar
A typical solar installation costs between $20,000 and $40,000 before incentives. The federal solar tax credit (worth 30%) is scheduled to phase out after 2025, so acting soon can maximize your savings.
What’s the ROI?
Between higher home value and lower electric bills, the ROI can be substantial. Here’s a table to illustrate:
| Home Value | System Cost | Value Added | Net Gain (After 10 Yrs) |
|---|---|---|---|
| $400,000 | $25,000 | $27,000 | $50,000+ in savings |
| $600,000 | $35,000 | $41,000 | $75,000+ in savings |
- Value added: 4.1-6.9% premium on sale price
- Annual savings: $1,000+ per year in electricity costs
- Payback period: 6-10 years, after which savings accrue directly to the homeowner
Maintenance and Warranties
Solar panels are low-maintenance, with annual maintenance costs typically just 1-2% of system price. Most systems include 25-year warranties, ensuring long-term performance and peace of mind.
Potential Drawbacks and Risks
Leasing vs. Owning
Leased solar systems can actually decrease home value or make selling more complicated. Buyers may not want to take over a lease, or may see less benefit if they do.
Quality and Installation
Poor installation or outdated panels can lower your home’s appeal. Always choose reputable, certified installers, and select Tier-1 panels for best results.
Solar Saturation
In neighborhoods where nearly every home has solar, the relative advantage of having panels may diminish. Still, solar-equipped homes almost never lose value compared to non-solar homes.
Mitigating Risks
- Choose a professional installer with strong reviews
- Opt for high-quality, warrantied panels
- Own your system whenever possible
Case Studies and Examples
California: The Leader in Solar Home Value
A California study of 5,000 homes found that solar panels added an average of 10% to home value, especially in markets like Los Angeles and San Diego where electricity rates are high.
New Jersey: Zillow’s 9.9% Bump
Homes in New Jersey with solar panels sell for a 9.9% premium, according to Zillow. This is due to high utility rates, generous state incentives, and widespread solar adoption.
Local Insights
In sun-drenched regions—from Arizona to Texas—homes with solar can stand out in the market, fetch higher prices, and sell more quickly than their non-solar peers.
Key Takeaways: Solar Panels and Home Value
- Solar panels increase home value by 4-7% on average, and up to 10% in high-demand regions.
- Ownership matters: Owned systems add more value than leased systems.
- Location is key: High electricity costs and solar incentives drive value higher.
- ROI is strong: Between bill savings and resale premiums, many homeowners recoup their investment within a decade.
- Quality counts: Choose reputable installers and modern panels for maximum impact.
- Solar homes sell faster: Listings with solar draw more interest and move quickly.
Conclusion and Action Steps
In conclusion, the answer to “do solar panels increase home value” is a clear and well-documented yes. Whether you’re motivated by higher resale value, lower energy bills, or a more sustainable lifestyle, installing solar panels is a smart investment for most U.S. homeowners. If you want to see how much value solar could add to your property, get a free quote from a reputable installer and start your journey toward a brighter, more valuable home.
FAQs: Do Solar Panels Increase Home Value?
Do solar panels increase appraisal value?
Yes, if you own your solar panels, they’re typically added to your home’s appraisal value.
By how much do solar panels increase home value?
On average, solar panels add 4-7% to your home’s value, with higher gains in certain states.
Should I lease or buy my solar panels for maximum value?
Buying is best. Owned systems add value, while leased systems can complicate sales and deter buyers.
Will my property taxes go up if I install solar panels?
In most states, solar is exempt from property tax increases, but always check your local regulations.
How long does it take to recoup the investment in solar?
Most homeowners recover their costs in 6-10 years, thanks to energy savings and higher resale value.
Do solar panels increase home value in every state?
Yes, but the amount varies based on electricity rates, incentives, and solar adoption in your area.
Are solar panels a good investment if I plan to sell soon?
If you own the system, solar panels can help your home sell faster and for more money, even within a few years.
What about maintenance and warranties?
Solar panels require little maintenance and typically come with 25-year warranties for peace of mind.
Do solar panels really help homes sell faster?
Yes, studies show solar homes sell 13.3% faster than comparable properties without solar.
