Do Solar Panels Increase Home Value?

By Tamara Jude Updated February 5, 2024

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Solar panels reduce your carbon footprint and increase your energy savings, but did you know they can also increase your home’s market value? Our guide explains how, plus provides tips to maximize your added value with a quality system from a top solar company

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How Do Solar Panels Increase Home Value?

Most homeowners know that solar panels reduce energy costs and carbon emissions. Those long-term savings help boost your home’s property value. According to the National Renewable Energy Laboratory (NREL), your home value increases by $20 for every $1 you save on energy bills. For example, if your solar energy system saves you $700 per year, the value of your home increases by $14,000. 

Real estate agents and home appraisers have found that this also increases your market value when selling your home. A 2021 Zillow housing trends report found that 67% of homebuyers considered energy efficiency to be a “very to extremely important” inclusion for a potential home. Homebuyers are willing to pay $15,000 or more for a solar powered-home, according to a large-scale solar home study conducted by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab).

This push for energy-efficient homes translates to higher home sale prices for sellers. Prospective buyers will spend 4.1% more for a solar-powered home, or around $9,274. These boosted resale values are even higher in certain housing markets. In New York, for example, buyers will pay an additional $23,989 for a solar home versus comparable homes.



Factors That Impact the Added Value of Solar Homes

Installing a solar system doesn’t always guarantee increased home value. Several factors affect your property value, such as your location, electricity rates, and solar system. We’ll discuss these in more detail below.

Local Electricity Rates

Solar power is most impactful in areas with high electricity rates, where producing your own energy will lower your monthly electricity bills. The U.S. Energy Information Administration (EIA) found that the average residential utility bill is $117.46 per month. If your monthly electricity bill is significantly lower than this, you may not save money by switching to solar power. States such as California, Connecticut, Texas, and New York have higher-than-average electricity rates.

Solar Market

States with growing solar markets promote solar conversion with specific laws and incentives that benefit homeowners. These states are ideal for solar-powered homes and offer the best potential for higher property value. The Solar Energy Industries Association (SEIA) listed the following states as the 10 best solar markets:

  1. California 
  2. Texas
  3. Florida 
  4. North Carolina
  5. Arizona
  6. Nevada
  7. Georgia
  8. New Jersey
  9. Virginia 
  10. Massachusetts

Residents in states with little to no solar market growth might not benefit from the boosted market value of going solar.

Solar Panel Ownership

If you plan to sell your home after installing solar panels, it’s important to choose the right financing option. You must legally own your solar panel system to include it in your home sale. Ownership is also necessary to use available solar incentives and reduce your solar panel costs. Only homeowners who purchase their systems outright or take out a loan are the owners of their panels.

Other financing options make solar home sales more complicated. If you choose a solar lease, your solar provider will remain the system’s legal owner. You must buy out the lease or transfer it to the new owner to sell your home. Depending on how much time is left in the lease, this may require a substantial payment. Afterward, the buyer can start a new lease with the solar company

You may also be able to transfer the lease to the new owner, allowing them to take over the remaining time on your contract. This doesn’t require a significant payment from either party, but the new homeowner must meet the qualifications to become the new lease owner, including a credit check. A lease transfer could slow down the selling process if you can’t find a buyer that meets the solar company’s lease qualifications. 

Solar System Condition

Homes with up-to-date solar systems have higher values than houses with aging systems. Solar systems typically last 25 to 35 years, so a home with a 15-year-old system can only provide another 10 to 20 years of service. Keep this in mind if you plan on selling a home with a solar system older than 10 years old. 

Homeowners should have their systems serviced and maintained to maximize their potential home sale. High-quality solar panels typically have longer warranties than inexpensive panels

Manufacturers’ warranties cover any defects or issues with the panels, while workmanship warranties cover installation errors. Use these warranties to make any necessary repairs and upgrades to keep your system in top condition. Additional coverage, such as a power production guarantee, protects your panels’ power output and production through the length of your warranty

If you’re considering buying a home with a solar panel system, review all of the system’s documentation, including maintenance records and warranty coverage. These details should also include any replacements or upgrades completed during ownership. If you plan on selling your solar-powered home, keep it in peak condition.



How Do Solar Panels Influence My Property Tax?

Installing a solar system increases your property value, so your property taxes will also increase. However, 36 states have laws that exempt solar owners from paying increased property taxes. These laws vary from state to state and differ in amount. While some states offer 100% exemption, others limit the exemption to a certain number of years. Check your local state legislature for exemption laws in your area. 



Maximizing Your Solar Panel Investment

Choosing the best solar technology raises your property value and potential selling price. Consider investing in a high-quality system with maximally efficient solar panels. The following solar programs and upgrades can help decrease your up-front costs while bringing the highest return on investment

Solar Incentives, Credits, and Rebates

Solar incentives on the federal, state, and local level can lower your system costs. For example, the federal solar tax credit provides a tax reduction equal to 30% of your installation costs. Check for state and local incentives in your area on the Database of State Incentives for Renewables and Efficiency (DSIRE). You may also find city- and utility-specific rebates.


Most quality solar systems produce more energy than your home needs. Net-metering programs allow homeowners to sell this surplus energy back to the grid for credits on their utility bills or annual payouts. Net-metering programs vary throughout the country and may be enforced at the state level or by a specific utility company. Check the Database of State Incentives for Renewables & Efficiency (DSIRE) for programs in your area. 

Solar Batteries

If net-metering is unavailable in your location or you’d rather store excess energy for your own use, you can install a solar battery instead. You can use this energy during blackouts, low sunlight days, or at night. Homeowners looking to live off-grid without any ties to a utility company can use solar batteries to sustain their homes. If you choose to remain on the grid, solar batteries can offset periods of high electricity rates, increasing your energy savings.



Our Recommendation

Installing a solar panel system offers long-term clean energy and boosts your property value. How much your home value will increase depends on your location, local policies, and electricity rates, but most homeowners see a significant increase from going solar. Homeowners looking to sell a solar-powered home should keep the system up-to-date and in pristine condition. Home buyers interested in a solar home should ensure the system is in working condition and available for ownership transfer. 

If you’re considering adding a solar system to your home, we recommend getting quotes from at least three solar companies to find the best equipment and financing options.

Homeowners Save $20,000 to $97,000 with Solar Panels on Average Over Typical System Life Span
Get a Quote on Your Solar Installation in 30 Seconds



Solar Panels FAQ

Can solar panels increase a home’s property value?

Yes, solar panels will raise your home’s property value. Although the added value can vary by location, the National Renewable Energy Laboratory (NREL) found that home value increases by $20 for every $1 saved on your utility bills. This translates to a higher market value when selling your home. 

Is it hard to sell a house with solar panels?

No, selling a solar home in the right market is not hard. Homeowners will find it easier to sell a solar home in a state with a growing solar market and high electricity rates. Although homes will sell in less favorable conditions, fewer buyers may be interested in a solar-powered home if the benefits are minimal. 

Do solar panels increase the appraisal value of a house?

Yes, solar panels increase the appraisal value of a house by 4.1% on average, according to a study conducted by Zillow. These values vary based on your location and the strength of your local solar market. 

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