Do Solar Panels Increase Home Value?

Effect of solar panels on home value: What the research says

Research consistently shows that solar panels can increase a home’s resale value, though the exact amount varies depending on location, system age and whether the panels are owned or leased.

Zillow analysis

A 2022 Zillow analysis found that homes with listing descriptions mentioning solar panels sold for 1.4% more than expected, based on an analysis of more than 3.1 million home sales from 2020 and 2021. However, in April 2026, Zillow reported a 0.52% premium for listings using the phrase “solar panels,” based on an analysis of more than 2 million homes listed in 2025.

These studies examined different samples and measured listing language rather than confirming solar installations and addressing market conditions at the time. But together they illustrate how reported resale premiums can vary over time, and that listing-based estimates don’t necessarily reflect the value-add of an actual solar system.

SolarInsure analysis

A 2025 study from SolarInsure focused on 5,000 single-family homes in California sold between 2020 and 2023.

SolarInsure’s analysis found that homes with owned solar systems sold for 5% to 10% more than comparable homes without solar. Newer systems added more value than older ones, while leased systems showed little effect on resale price, likely because buyers are hesitant to take over lease obligations.

Owned vs. financed vs. leased solar impact on value

Systems owned outright or purchased with a standard solar loan typically transfer more easily and account for most documented resale premiums. With a financed system, the seller may need to pay off the remaining loan balance at closing or arrange for the buyer to assume the loan, depending on the lender’s terms.

Owned solar systems typically have the strongest resale value

Leased panels and power purchase agreements (PPAs) are different because a third-party-owned company retains ownership of the equipment. Buyers may need to qualify to assume a solar lease or PPA, while a lease buyout can add costs and complicate the sale.

These arrangements may add little or no measurable value and can deter buyers who don’t want the contractual obligations. Paying off a solar loan or completing a lease buyout before listing may help the system qualify as owned solar, the category most commonly associated with documented resale premiums.

Estimating how much solar can boost your home’s value

For homeowners, the thought of increasing property values is an exciting prospect. However, determining precisely how much value a solar system will add can be challenging. If you’re planning to go solar, here’s how to estimate how much solar panels can increase your home’s value.

Begin by assessing your property’s current value. Try looking at similar homes without solar panels in your area to determine an average baseline price. You probably don’t need a formal home appraisal, but if you’ve recently had one done on your property, that could be a good place to start.

In strong solar markets like California, calculate a potential 5% to 10% increase in home value.

Zillow studies found that homes with listing descriptions mentioning solar panels sold for 0.52% to 1.4% more than expected. To estimate what that range could mean for your home, multiply its approximate value by 1.0052 or 1.014. If comparable homes without solar panels are selling for $250,000, you may be able to list your home for closer to $253,500 with a solar energy system.

Real-world example

Kerrie, a ConsumerAffairs reviewer from California, said Sunrun replaced her roof and upgraded her electrical panel before installing solar panels and a battery. She praised the team’s professionalism and efficient work and noted how the improvements added substantial value to her home.”

ROI analysis: Solar panel cost vs. value increase

When weighing the financial benefits of solar panels, it helps to compare what you pay against what you might gain in added home value. As of 2025, the average cost to install a residential solar system in the U.S. ranges roughly from $18,000 to $43,000 — with an average of around $20,000 — depending on system size, your location and other factors.

To estimate solar’s return on investment (ROI), consider its potential resale premium. Research shows that premiums increase by 0.52% to 1.4% nationally and 5% to 10% in strong markets like California. If a home without solar is worth $300,000, a 5% increase would suggest a resale value around $315,000, potentially adding $15,000 or more to your return.

How solar compares with other home improvement returns

A solar system that costs roughly $20,000 to $30,000 out of pocket may not pay for itself through a resale premium alone. However, unlike many remodeling projects, solar can deliver ongoing financial benefits through lower electricity bills.

Kitchen renovations and bathroom remodels typically recover only a portion of their costs at resale. Solar may approach or exceed 100% cost recovery when you combine its resale premium with years of electricity savings. Actual returns vary based on installation costs, energy use and local market conditions.

How much of your solar investment can you recover?

You can recoup your solar investment in two ways: By saving on electricity bills while you live in your home and by potentially selling your home for more. How much you recover depends on your system's cost, how much electricity it generates and the resale premium buyers are willing to pay.

Many homeowners reach the break-even point through electricity savings alone in roughly eight to nine years, although the timeline varies. If you sell before then, a resale premium may help offset the remaining cost. If you stay longer, continued bill savings can increase your total cost recovery over the system's lifetime.

» MORE: Solar energy pros and cons

What determines how much value solar panels add?

External factors can influence the value of your solar installation, so don’t rely on a simple calculation if your situation has unique circumstances. And because solar’s resale value depends on local market conditions, estimates from other areas may not reflect what buyers are willing to pay in your community.

Check local sales data or consult a real estate agent experienced in selling solar homes in your area.

Here are some of the main factors that influence how much solar panels can increase your home’s value.

• Home location: The benefits of solar panels vary by location due to differences in electricity rates, state incentives and solar adoption. Hawaii, for example, is the state where solar savings go the furthest.
• Panel location: How you install solar panels can affect your home’s value. South-facing roofs with direct, unobstructed sunlight are ideal. North-facing roofs or heavily wooded lots receive less sunlight, produce less energy and may add less value to your home.
• Roof age and condition: If you install solar panels on an older roof, it may be necessary for a buyer to remove the panels and replace the roof later on, which is a hassle some people won’t want to deal with. Solar panels may also void the warranty on a roof.
• Quality and installation: The quality of solar panel equipment and its installation can affect energy production, impacting how much value the solar panels add to the home. Essentially, if you install low-quality solar panels or install them incorrectly, they may yield less energy and resale value.
• Size and efficiency: Larger, more efficient solar panels can generate more energy and savings, potentially adding more value to your home. However, some buyers may dislike the look of oversized panels, so avoid going overboard.
• Panel age and condition: Solar panels last 25 to 30 years on average, but older or damaged panels may add less value due to degradation and a shorter remaining life. Newer systems with more time left on their product and warranties may command stronger premiums. Keep warranty documents handy so buyers can verify coverage.
• Local energy costs and net metering: High electricity rates can make solar more appealing to buyers. In areas with favorable net metering, excess energy earns export credits or bill credits that boost lifetime savings. Reduced compensation and policy changes, including time-of-use rates, can lower projected savings.
• Power outage frequency and battery storage: A battery can boost buyer appeal in areas with frequent outages or high time-of-use rates by providing backup power and letting homeowners use stored energy at night. Research on resale value is still emerging, so weigh potential benefits against added costs and savings on electricity bills.

FAQ

Is installing solar panels worth it just for resale value?

Most homeowners install solar panels for environmental reasons or to reduce their monthly utility costs, but are they worth installing just to increase your home’s resale value? The answer depends partly on your local market and buyer preferences.

Eco-conscious buyers may seek solar as a green feature that lowers their carbon footprint, while buyers with less solar literacy may be skeptical of contracts or technical details. Clear buyer education, including recent utility bills and warranty information, can help buyers understand the potential benefits.

We asked Rob Giuffria, managing broker at Connecticut-based Tea Leaf Realty, and he did not recommend solar panels as a short-term real estate investment.

Even if the potential boost in value outweighs the cost of the solar panels, home solar installations can actually complicate or delay the sale of a home — especially if there is a lease, ongoing maintenance contract or other long-term agreement in place. “While most buyers see solar panels as something that’s directionally correct, it becomes a negative when they learn about contracts for maintenance or other costs and commitments,” Giuffria said.

However, if you plan to be in your house for five years or more and are interested in solar, Giuffria still recommends the upgrade.

Manuela Adami, a representative with Swiss solar company Volted, summarized the situation well: “In some cases, the increased resale value may not fully cover the cost of the solar installation. However, when considering other factors such as reduced energy bills, potential tax credits or rebates, and the environmental benefits, installing solar panels can be a wise investment.”

» MORE: Are solar panels worth it?