house with rooftop solar panels and increased home value

Home Selling Guides

Do Solar Panels Increase Home Value? What the Data Shows in 2026

Jimena Quadrana

Marketing Manager at Sell My Home

Published

April 20, 2026

Read Time

15 minutes

Do Solar Panels Increase Home Value?

Yes. Solar panels increase home value by 4% to 7% on average, adding around $29,000–$32,000 depending on system size and location.

However, only owned systems add value. Leased solar panels typically do not increase resale price and can complicate the sale.

If you're planning to sell soon, solar panels may not be the best investment unless you plan to stay in the home for several years.

If you're thinking about selling your house, you might be wondering:

Do solar panels actually increase your home value — or are they just an expensive upgrade?

The short answer: yes, solar panels can increase home value by 4% to 7% on average. But whether they’re worth installing before you sell depends on a few key factors — including ownership, timing, and your local market.

In this guide, we’ll break down exactly how solar panels impact resale value, when they help (and when they don’t), and whether it makes financial sense before listing your home.

Key Takeaways

Research consistently shows that solar panels significantly boost home values, with owned systems delivering measurable returns for homeowners ready to sell.

• Owned solar systems increase home value by 4-7% on average, translating to roughly $29,000-$32,000 for typical homes based on recent studies.

• Ownership status is critical - owned panels add substantial value while leased systems provide zero increase and can complicate sales.

• Solar delivers 100% cost recovery potential through property value increases alone, making it one of the highest-ROI home improvements available.

• Location and electricity costs matter - homes in high-rate areas like California and New York see larger premiums than low-cost regions.

• Timeline affects ROI - homeowners staying 5+ years maximize benefits through energy savings plus resale value, while those selling within 1-2 years should reconsider.

The data is clear: solar panels represent both an immediate utility cost reduction and a long-term investment that today's environmentally conscious buyers actively seek and reward with higher purchase prices.

How much do solar panels increase home value: what the data shows

Multiple studies spanning over two decades paint a clear picture: solar panels add measurable value to homes. The numbers vary based on when and where researchers conducted the work, but the consistent finding remains that owned solar systems increase resale prices.

Berkeley Lab study findings

Lawrence Berkeley National Laboratory conducted the most detailed analysis to date and looked at 22,822 home sales across eight states from 2002 to 2013. 3,951 of those homes had solar photovoltaic systems installed.

The research team found that buyers paid a premium of about $4 per watt of installed solar capacity. A typical 3.6 kW system translated to about $15,000 in added home value. The study showed consistent premiums across different states, housing markets and property types.

Here's how those premiums break down by system size:

Solar System Size	Estimated Value Increase
4 kW	$23,644
6 kW	$35,466
8 kW	$47,288
10 kW	$59,110

Solar System Size

Estimated Value Increase

4 kW

$23,644

6 kW

$35,466

8 kW

$47,288

10 kW

$59,110

Based on Lawrence Berkeley National Laboratory findings

Berkeley Lab researchers found only small differences between premiums for new versus existing homes, and these differences weren't statistically important. This suggests that solar adds value whatever the installation timing relative to the home's construction.

The National Renewable Energy Laboratory determined that every $1 in annual electricity savings from solar corresponds to roughly $20 in home value increases. This provides another framework to calculate potential returns.

Zillow analysis results

Zillow analyzed home sales data in 2019 and found that properties with solar installations sold for about 4.1% more than comparable homes without solar. The online real estate marketplace also reported that solar systems added about $5,911 per kilowatt of installed capacity.

Location played a big role in these premiums. Homes with solar commanded a 5.4% price premium in New York City. The increase was more modest at 2.7% in Riverside, California. These variations reflect differences in local electricity costs, buyer priorities and market awareness of solar benefits.

Recent 2025-2026 research data

More recent analysis suggests that solar premiums have grown since Zillow's 2019 study. SolarReviews examined over 400 homes sold across the United States in the last three years. Solar homes now sell for 6.9% more than comparable properties without solar. This equates to about $29,000 in added value for a median-valued home.

SolarInsure analyzed 5,000 California home sales between 2020 and 2023. Their findings showed that homes with owned solar panels sold for 5% to 10% more than similar homes without solar. That represents a $37,500 to $75,000 increase for a typical California home valued at $750,000.

The SolarInsure research revealed an important difference: homes with leased or third-party-owned solar systems showed no value increase compared to homes without solar. Ownership matters. System age factored in slightly. Installations over five years old still earned a 5% to 6% premium, while newer systems saw 7% to 9% increases.

These updated figures suggest that as solar becomes more mainstream and buyers better understand its long-term savings potential, the market rewards homeowners who invest in owned systems increasingly.

Why solar panels add value to your home

Buyers pay premiums for solar-equipped homes, and with good reason too. The value increase stems from tangible benefits that transfer to new homeowners and create an immediate return on investment from day one of ownership.

Lower monthly electricity costs for buyers

Homeowners with solar panels save around $125 per month, or $1,500 a year, on electricity bills. These savings represent real money that buyers won't have to spend each month after purchasing the home. The reduction in energy expenses can range from 70% to 100%, depending on the system's size and efficiency.

Buyers get predictable housing costs. Mortgage payments, property taxes and insurance remain fixed, but utility bills can fluctuate. Solar panels eliminate or reduce that variable expense sharply. States like Florida, where air conditioning drives summer electricity costs higher, make these savings even more attractive to prospective buyers.

The savings calculation matters to lenders as well. Lower utility bills improve a buyer's overall housing affordability ratio and potentially make homes with solar available to a broader pool of qualified buyers.

Protection against rising utility rates

Electricity prices have increased by an average of 2.85% per year in the last 25 years, with current rates hovering around $0.17 per kilowatt-hour. Some states have experienced even steeper increases. California's electricity rates jumped 4.54% on average each year, while Louisiana saw 1.94% yearly increases.

Solar panels lock in energy costs through what's called the levelized cost of energy (LCOE). Residential solar systems have LCOE ranging from about $0.06 to $0.07 per kilowatt-hour. Grid electricity costs $0.17/kWh and solar LCOE is $0.06/kWh, so homeowners pay $0.11 less per kilowatt-hour for solar energy. That rate stays stable for 25 years.

This protection acts as a financial hedge. Utility rates will continue climbing due to ongoing infrastructure costs and fuel price volatility. Buyers purchasing solar-equipped homes inherit this rate protection and insulate themselves from future increases that could otherwise add hundreds of dollars to their annual housing expenses.

Existing infrastructure and transferable warranties

Buyers acquire a turnkey energy system when purchasing a home with solar. Most major manufacturers offer transferable warranties that transition to new homeowners naturally, covering performance and equipment for 25 years. Product warranties last 10-12 years and protect against manufacturing defects, material issues and premature wear. Performance warranties extend 25-30 years and guarantee panels maintain specified power output levels.

These transferable warranties increase buyer confidence and property value. New homeowners inherit 15-20 years of remaining protection without additional cost. Properties with transferable warranties often command higher prices and sell faster than those with expired or non-transferable coverage.

Environmental benefits and buyer appeal

Environmental considerations influence home purchases more now. According to the National Association of Realtors, 44% of homebuyers found utility costs an important factor during the buying process, and 57% of real estate agents found promoting energy-efficient features somewhat valuable. Regions like California and Oregon, where environmental consciousness runs high, make solar installations a major selling point.

Solar energy contributes to cleaner air quality, especially in densely populated areas. Buyers motivated by sustainability view solar homes as aligned with their values and create additional demand that drives up prices.

Factors that determine how much value solar adds

Not every solar installation adds the same value to your home. Several variables determine whether your system commands a 4% premium or a 10% premium, or whether it adds any measurable value at all.

Owned vs leased solar systems

Ownership status represents the single most critical factor. Homes with owned solar panels sold for 5-10% more than comparable homes without solar. Homes with leased or third-party-owned solar panels didn't sell for more than their counterparts, by contrast.

The difference comes down to equity. Buyers acquire a tangible asset with no ongoing obligations when you own the system outright. Buyers must qualify with the leasing company and assume monthly payments that may span 10-20 years when you lease. Some appraisers assign zero value to leased panels because homeowners hold no equity stake. Transferring leases creates hassles that can scare away buyers and complicate transactions.

Ownership matters more than any other variable if you're thinking over solar before selling.

System age and condition

Systems over five years old sold for 5-6% more, while newer systems sold for 7-9% more. The difference reflects technology improvements and remaining warranty life, but older systems still add substantial value because buyers prioritize long-term savings above advanced equipment.

Solar panels degrade at 0.5% to 1% per year. A 10-year-old system still produces roughly 95% of its original output. Most panels come with 25-year performance warranties, so a system with 20 years of coverage remaining commands much more value than one with only 5 years left.

Physical condition affects value as well. Cracked panels, moisture damage, or discolored areas possess minimal to no value. Well-maintained systems with clear documentation—original purchase records, warranty information, energy production history and maintenance logs—prove more attractive to buyers and appraisers.

Panel size and efficiency

Larger systems that offset 80-100% of a home's energy usage command higher premiums than those covering only 30-40%. A 10 kW system generates more savings than a 4 kW installation, which translates to greater buyer appeal.

Local electricity costs

The more expensive electricity costs in your area, the more valuable your solar panels become. States where homeowners pay $0.25 to $0.40+ per kilowatt-hour, like California, Connecticut, Massachusetts and New York, see substantial savings from solar, and buyers pay premiums for those savings.

Location and market demand

Geographic location substantially affects value. Homes with solar panels in Seattle sold for 9.3% more on average, while California properties saw 5.4% increases. Markets where solar adoption remains common have more buyer awareness and more comfort among appraisers assigning value to systems.

Buyer demographics matter too. Younger, environmentally conscious buyers and those focused on long-term energy costs place higher value on solar installations.

Roof condition and panel placement

Visible, well-placed panels on roofs in good condition add more value than poorly positioned systems on aging roofs. Buyers factor in potential roof replacement costs if your panels are mounted on a roof nearing the end of its lifespan.

Solar panel cost vs home value increase: the ROI breakdown

The financial equation has two sides: what you spend upfront and what you recover through increased home value and energy savings.

Average installation costs in 2026

Residential solar installations run between $2.30 and $3.60 per watt before incentives in 2026. A typical 8 kW system costs $18,400 to $28,800 depending on your location, roof characteristics and equipment choices. A 6 kW system falls in the $15,000 to $21,000 range.

The federal 30% residential solar tax credit expired at the end of 2025. Legislation eliminated this incentive, and installation prices increased by $0.15 per watt in late 2025. Homeowners now pay the full installation price without the tax credit offsetting costs, though state and local incentives may still apply in some areas.

Expected increase in resale value

Your system may add 4.1% to 6.9% to your home's resale value . That translates to $29,000 in added equity for a median-valued home. You could recover your entire installation cost through property value increases alone. Kitchen remodels recover about 60% of costs and bathroom renovations recover 50%, while solar can offer 100% cost recovery through increased property value.

How long to recover your investment

Most solar panels pay for themselves in 7 to 12 years. The U.S. average sits at 10 years. Your timeline depends on system cost, electricity rates and available state incentives. States with high utility rates like New York and New Jersey see payback under 10 years, while areas with lower rates stretch toward the longer end.

Energy savings while you own the home

Homeowners save between $800 and $3,100 annually based on Tesla customer data. Total savings range from $37,000 to $154,000 over 25 years. Electricity rates climbed 32% in the last decade, which means those savings grow larger each year.

Should you install solar panels before selling your home?

The timing of your solar installation matters as much as the decision itself. Your home's resale value depends heavily on ownership structure and how long you plan to stay.

When solar increases resale value

Owned solar systems deliver benefits. Homes with owned panels sell for 6.9% more on average and move 20% faster than comparable non-solar homes. Buyers recognize the savings in high-electricity markets like Florida, where cooling costs drive summer bills higher. They pay premiums accordingly.

Solar homes also appeal to environmentally conscious buyers who value sustainability with financial benefits.

When solar might complicate a sale

Leased systems create obstacles. Research shows homes with leased or third-party-owned solar showed no value increase compared to homes without solar. Buyers must qualify with the leasing company and assume monthly payments spanning 10-20 years. Transfer requirements add paperwork and can eliminate potential buyers unwilling to inherit long-term contracts.

Timeline considerations for sellers

Solar likely isn't worth installing to boost resale value if you're planning to sell within 1-2 years . But if you plan to stay 5-7+ years, the combination of energy savings and resale premium makes solar one of the highest-ROI improvements you can make.

Alternative: selling with vs without solar

Homeowners with leased panels should buy out the lease before listing. This creates the cleanest path to maximizing sale price. You can also market the home with documentation showing energy production history and savings data.

Conclusion

Solar panels increase home value. Owned systems add anywhere from 4.1% to 6.9% to your resale price. Solar represents one of the few home improvements where you can recover 100% of your installation costs and enjoy energy savings the entire time you own the home.

Ownership matters most. Leased systems add little to no value and can complicate sales. Owned panels attract buyers and speed up transactions.

Check your current home value and understand your timeline before you commit to a $20,000+ solar installation. Those planning to stay 5+ years see the best returns. Either way, solar delivers measurable financial benefits that today's buyers recognize and reward more than ever.

FAQs

Q1. Do solar panels make it harder to sell your home? No, owned solar panels typically make homes easier to sell. Research shows that homes with owned solar systems sell 20% faster than comparable homes without solar and command a 4-7% price premium. However, leased solar systems can complicate sales since buyers must qualify with the leasing company and assume long-term payment obligations.

Q2. How much value do solar panels add to a home? Solar panels add approximately $4 per watt of installed capacity to your home's value. For a typical 8 kW system, this translates to roughly $32,000 in added value. Recent studies show homes with solar sell for 4.1% to 6.9% more than comparable homes without solar, with the exact premium depending on factors like location, system size, and local electricity costs.

Q3. What's the difference between owned and leased solar panels when selling? Owned solar panels add significant value to your home (5-10% increase in sale price), while leased or third-party-owned systems show no measurable value increase. This is because buyers acquire a tangible asset with owned systems, whereas leased systems require buyers to assume monthly payments and qualify with the leasing company, which can deter potential purchasers.

Q4. How long does it take for solar panels to pay for themselves? Most solar panel systems pay for themselves in 7 to 12 years, with the U.S. average at 10 years. The payback period depends on your system cost, local electricity rates, and available incentives. States with high utility rates like New York and New Jersey typically see payback periods under 10 years, while areas with lower rates may take longer.

Q5. Should I install solar panels right before selling my home? If you're planning to sell within 1-2 years, installing solar primarily for resale value may not be worthwhile. However, if you plan to stay 5-7+ years, solar offers one of the highest returns on investment among home improvements, combining energy savings during ownership with increased resale value when you eventually sell.