Does solar increase home value? In most cases, yes. Owned solar panels typically add about 4% to 10% to a home’s sale price, which works out to roughly $16,000 to $68,000 on homes priced between $400,000 and $1 million. The catch is that the premium depends on who owns the system, how old it is, and how well you document it. This guide covers what the research found, what the numbers look like for your home price, and how to protect the value you are building.
Quick answer
- Owned solar (cash or loan) usually adds value. Leased and PPA systems usually do not.
- Studies put the premium between about 4% and 10% of the sale price.
- Homes with solar also tend to sell faster, according to NREL research.
- Higher electricity rates, newer systems, and clear paperwork lead to a bigger premium.
Does Solar Increase Home Value? The Short Answer
Owned, roof-mounted solar tends to raise resale value because it transfers with the house as a permanent improvement that lowers the next owner’s energy costs. Buyers are purchasing years of reduced electric bills along with the property, and they will pay something for that. Ownership is the single biggest factor, as the table below shows.
| Ownership type | Adds appraised value? | What the buyer inherits |
|---|---|---|
| Owned with cash | Yes | The panels, production, and remaining warranty |
| Owned with a solar loan | Yes | Same as cash; the loan is settled from sale proceeds |
| Leased system | Rarely | A lease contract to assume or buy out |
| Power purchase agreement (PPA) | Rarely | A PPA contract to assume or buy out |
How Much Value Does Solar Add to a Home?
Several studies have tried to measure the premium. They use different methods and time periods, so the results vary, but they point in the same direction.
What the Major Studies Found
| Study | Finding | How to read it |
|---|---|---|
| Zillow (2019) | Solar homes sold for about 4.1% more | A widely cited national baseline. Results ranged from about 2.7% in Riverside, CA to 5.4% in New York City. |
| Lawrence Berkeley National Laboratory | About $4 per watt of installed capacity | Useful for sizing the premium by system size |
| NREL | Solar homes sold about 20% faster; about $20 of value per $1 of yearly bill savings | Older data, but still used as a directional rule of thumb |
| SolarReviews (2024) | About 6.8% more, with a median gain of just over $25,000 | A more recent national read |
| SolarInsure (2025) | Owned solar sold for 5% to 10% more across 5,000 California sales; third-party-owned systems showed no premium | The newest data, and the closest match for California homeowners |
These are averages from past sales, not a guarantee for your property.
Solar Value by Home Price
Because the premium is a percentage of the sale price, a higher-priced home sees a larger dollar gain.
| Home value | At 4.1% (Zillow) | At 6.8% (SolarReviews) |
|---|---|---|
| $400,000 | $16,400 | $27,200 |
| $600,000 | $24,600 | $40,800 |
| $800,000 | $32,800 | $54,400 |
| $1,000,000 | $41,000 | $68,000 |
Solar Value by System Size
Using the Berkeley Lab figure of about $4 per watt, a larger system adds more value. These are illustrative estimates, not appraisals.
| System size | Estimated value added |
|---|---|
| 4 kW | $16,000 |
| 6 kW | $24,000 |
| 8 kW | $32,000 |
| 10 kW | $40,000 |
Why Buyers Pay More for Homes With Solar
A buyer does not pay more because panels look impressive. They pay more because the panels lower the cost of owning the house. A home that comes with a hedge against rising utility rates is cheaper to operate, and informed buyers price that in.
- Lower monthly bills: Every kilowatt-hour the system produces is one the new owner does not buy from the utility.
- Protection from rate hikes: Fixed solar costs matter more each year that utility prices climb.
- Faster sales: NREL research found solar homes sold about 20% faster than comparable homes.
- Energy independence: Paired with a battery, solar can keep the lights on during outages.
- A move-in-ready upgrade: The buyer skips the cost and disruption of installing it themselves.
Owned vs Leased Solar: The Factor That Changes Everything
How you paid for the system matters as much as the system itself when it comes to resale.
When You Own the System
Owned solar, paid in cash or through a solar loan, is treated as part of the real property. It conveys with the sale, and appraisers can assign it a value. Closing is also simpler because no third party is involved.
When You Lease or Have a PPA
A lease or PPA keeps the equipment in a solar company’s name. To sell, the buyer typically has to assume the agreement and pass the provider’s credit check, or you have to buy out the remaining term before closing. Some buyers walk away rather than take on payments they did not choose, and appraisers generally cannot count leased equipment toward the home’s value.
Can You Buy Out a Lease Before Selling?
Often, yes. If you own the system outright by the time you list the home, it can be treated like owned solar. Before listing:
- Request a buyout quote from your solar provider.
- Compare the buyout cost against the value it may add.
- Complete the transfer of ownership before the appraisal.
- Keep the buyout paperwork with your other solar records.
What Determines How Much Value Solar Adds
Ownership decides whether there is a premium at all. The factors below decide how large it is.
Local Electricity Rates
Solar adds the most value where electricity is expensive and rising, because the inherited bill savings are largest. In low-rate markets, the same system offsets fewer dollars each year. Our solar savings calculator estimates the bill offset that drives resale value.
System Age and Remaining Warranty
Newer systems with most of their warranty intact are worth more. SolarInsure found newer systems earned about 7% to 9%, while systems older than five years still earned about 5% to 6%. Age matters, but it does not erase the premium.
Battery Storage
A battery lets a buyer use stored solar power at night and during outages. That backup capability can make a listing stand out, especially in areas with frequent grid disruptions.
Documentation and Appraiser Awareness
Value only shows up in a sale if the appraiser accounts for it. An undocumented system can be quietly left out of the comparison.
How Appraisers Put a Number on Solar
Appraisers do not guess. Many estimate the present value of the system’s future energy production using a purpose-built tool, then compare that figure with recent sales of similar solar homes. Many also use the Appraisal Institute’s Residential Green and Energy Efficient Addendum to record the features. To help the appraiser credit your system, gather this paperwork:
- Proof of ownership (purchase contract or loan documents)
- Installation date and permit or permission-to-operate records
- System size in kW, plus panel and inverter models
- Warranty documents
- 12 months of production or monitoring data
- Electric bills from before and after installation
Does Solar Increase Property Taxes?
It can raise your assessed value, but many states shield you from the tax effect. According to the Solar Energy Industries Association, the added value of a solar system is exempt from property taxes in 36 states. Rules differ by state and county, and some exemptions expire, so confirm the current rule with your local assessor before you install or sell.
Solar vs Other Home Upgrades
Most renovations return only part of their cost at resale. EnergySage, using National Association of Realtors remodeling data, compares solar like this:
| Upgrade | Typical cost recovered at resale | Ongoing financial benefit |
|---|---|---|
| Kitchen remodel | About 60% | None |
| Bathroom remodel | About 50% | None |
| Owned solar | Up to 100%, in favorable markets | Lower electric bills |
Does Solar Increase Home Value in California?
California homeowners face some of the highest electricity rates in the country, which is why the premium tends to be strong there. SolarInsure’s California sales data showed a 5% to 10% premium for owned systems, while Zillow’s older metro figures showed gains from about 2.7% in Riverside to 5.4% in New York City. Export rules also affect how buyers value a system, so see how performance changes under NEM 3.0, and compare solar savings by state if you are weighing other markets. Homeowners who choose the best solar panels in Los Angeles also tend to benefit, since buyers respond to equipment they recognize as reliable.
How to Estimate the Value of Your Own System
- Find your yearly savings. Use our guide to how much you can save with solar.
- Apply the NREL rule of thumb. Multiply annual bill savings by about 20. For example, $1,500 in yearly savings suggests roughly $30,000 in value.
- Cross-check with a percentage. Apply 4% to 7% to your home’s current value.
- Compare against net cost. Review your payback period and current solar incentives, since the federal residential credit ended in 2025.
The NREL multiplier comes from older research. Treat it as a rough guide, not an appraisal.
The Bottom Line on Solar and Home Value
Solar can raise your home’s resale value, but the premium is earned, not automatic. Owned systems add value because they hand the next owner years of lower energy costs. Leased systems rarely deliver the same lift. System age, local rates, and documentation determine the size of the gain. If you want a personalized number, get a solar estimate for your home.
Frequently Asked Questions
Does solar increase home value if I financed the panels with a loan?
Yes. A system bought with a solar loan is still owned by you and transfers with the home like a cash purchase. Any remaining loan balance is settled from the sale proceeds, so the loan and the home value are handled separately at closing.
Will leased solar panels hurt my home sale?
Not necessarily, but they add complexity. The buyer usually has to qualify for and assume the lease or PPA, or you may need to buy out the remaining term first. Leased systems generally do not add appraised value.
How much does solar increase home value?
Studies point to about 4% to 10% of the sale price for owned systems. On a $600,000 home, that is roughly $24,600 to $60,000. Your actual figure depends on system size, age, local rates, and buyer awareness.
Is it harder to sell a house with solar panels?
Usually not. NREL research found solar homes sold about 20% faster than comparable homes. The exception is a leased system, where the buyer must assume the contract or you must buy it out.
Will solar increase my property taxes?
Not in many states. The added value is exempt from property taxes in 36 states, according to SEIA. Check your state and county rules, since exemptions vary and some expire.
Do I need to tell the appraiser about my solar system?
Yes, and provide documentation. Share the system size, installation date, ownership proof, and production records. Appraisers can only credit what they can verify.