Homes with solar panels often sell for roughly 4.1% more than comparable homes without them — and research consistently shows buyers are willing to pay a premium for lower long-term energy costs. But solar’s impact on resale value isn’t automatic. It depends on whether the system is owned or leased, how large and modern the installation is, and where the home is located.
This guide explains what the data actually shows, how appraisers evaluate solar homes, and what homeowners should understand before buying or selling a property with solar.
What the Research Shows
Two of the most widely cited studies paint a consistent picture. Lawrence Berkeley National Laboratory analyzed nearly 22,000 home sales across eight states — including close to 4,000 homes with solar — and found that buyers regularly paid more for homes with solar energy systems installed. On average, solar added approximately $4 per watt of installed capacity, translating to around $15,000 in additional home value for a typical residential system.
A separate Zillow housing market analysis found that solar homes sold for about 4.1% more on average than comparable non-solar homes. More recent market data continues to support these findings, even as solar has become more common and system costs have declined.
The underlying reason is straightforward: buyers are paying for future energy savings. A home with a well-sized solar system may come with years of reduced utility bills built in — and in high-electricity-cost states like California, Hawaii, and parts of the Northeast, that financial advantage can be substantial.
Ownership Structure: The Single Biggest Factor
Whether the system is owned outright or under a lease or PPA (Power Purchase Agreement) has more impact on resale value than almost any other variable.
- Owned systems (cash purchase or solar loan): These transfer with the property as a permanent improvement and are most likely to add measurable value. Financing through a solar loan is increasingly common and doesn’t complicate the sale — the loan can often be paid off at closing.
- Leased systems and PPAs: Buyers must assume the existing contract, which some view as a complication. Others are comfortable with it — especially if the monthly payments are lower than what they’d pay the utility. The key is transparency: disclosing terms clearly early in the sale process avoids surprises.
In short, owned systems are simpler to transfer and are more likely to command a sale price premium. Leased systems can still provide value, but the transaction requires more buyer education.
Size, Age, and System Condition
Not all solar systems add equal value. Buyers and appraisers consider several factors:
- System size: A larger system that offsets most or all of a home’s electricity usage provides greater long-term savings — and typically commands more value.
- Age and remaining lifespan: Solar panels typically last 25–30 years. A system installed 5 years ago with 20+ years of remaining useful life is more attractive than one nearing end-of-warranty.
- Equipment quality: Modern panels and inverters from reputable manufacturers carry stronger warranties and may be viewed more favorably by buyers familiar with solar.
- Poor installation or undersizing: This is worth acknowledging honestly. A system that was sized too small to meaningfully offset bills, or one with a history of performance issues, can raise buyer concerns rather than add value. The quality of the original installation matters.
How Appraisers Evaluate Solar Homes
Solar valuation has evolved as the industry has matured. Appraisers increasingly use the income approach — estimating the value of a solar system based on projected energy savings over its remaining useful life. If a system saves a homeowner $1,200 per year in electricity costs, that recurring benefit translates into quantifiable home value.
One practical tool worth knowing: the PV Value tool, developed in partnership with Sandia National Laboratories and recognized by Fannie Mae and FHA-approved appraisers. Homeowners selling a solar home can specifically request that their appraiser use this methodology. Not all appraisers are familiar with solar valuation, so being proactive about this can make a meaningful difference in how your system is assessed.
That said, solar valuation practices still vary by local market and appraiser experience. In high-solar-adoption markets like California and Arizona, appraisers tend to be more comfortable with the methodology. In markets where solar is less common, there may be more variability.
Markets Where Solar Adds the Most Value
Solar’s resale impact is most pronounced in markets where electricity prices are high and solar adoption is already established. California, Hawaii, Massachusetts, and New York consistently show the strongest solar value premiums. In these states, buyers understand solar, electricity savings are meaningful, and appraisers are experienced with solar valuation.
In lower-electricity-cost states, the savings math is less compelling, and the resale premium may be smaller. That doesn’t mean solar doesn’t make sense in those markets — it may still provide value during your time in the home — but expectations around resale impact should be calibrated to local conditions.
Frequently Asked Questions
Frequently Asked Questions
Not automatically. Research shows solar homes often sell for more than comparable non-solar homes, but the impact depends on ownership structure, system quality, electricity prices in your area, and local market familiarity with solar. An owned, well-sized system in a high-rate state is most likely to add clear resale value.
Research suggests solar may add around $15,000 on average, or roughly 4.1% of home value. The actual figure varies based on system size, age, and local market conditions. A larger system in a high-electricity-cost state may exceed that; a smaller or aging system in a low-rate state may add less.
In many states, no. Numerous states have enacted solar property tax exemptions that allow homeowners to benefit from increased home value without a corresponding increase in property taxes. The availability of these exemptions varies by state — check your state’s solar incentive page for current details.
Provide documentation on system size (in kW), installation date, equipment manufacturer and model, warranty terms, and average annual production or savings. Request that they use the PV Value methodology if possible. The more concrete data you can supply, the better positioned the appraiser is to capture the system’s value accurately.
Some studies suggest solar homes spend fewer days on market, particularly in regions with high electricity costs or strong buyer interest in sustainability features. In competitive markets, solar can be a meaningful differentiator. In markets where solar is less common or less understood, the effect on days-on-market is less consistent.
Final Thoughts
The best time to understand how solar affects home value is before you install — not when you’re listing. A well-sized, owned system in a high-electricity-cost area tends to deliver both daily savings while you live there and genuine resale upside when you sell.
For most homeowners, the value of solar accumulates long before a for-sale sign goes up. Lower electricity bills, protection from rising utility rates, and energy independence are the primary benefits — and they start on day one. A strong resale outcome is often the reward for making a well-informed decision at the start.
If you’re evaluating solar for your home, working with a vetted local installer who understands your utility rates, your roof’s production potential, and appropriate system sizing is the foundation for an installation that delivers value — both today and at resale.