Do Solar Panels Increase Home Value?The Truth About Selling a Solar Home.You have been told solar panels are a great investment. And they are, for your electricity bill. But when you go to sell your house, will those panels on your roof help you or hurt you? The answer is not what most solar salespeople will tell you.
The truth is that owned solar panels add $15,000 to $25,000 to your home value. Leased solar panels add almost nothing. In fact, leased panels can scare buyers away entirely.
In this article, we will discuss do solar panels increase home value, what the research says, single factor that determines everything, does location matter, the hidden problem, can solar panels hurt your home value, battery storage impact, property tax problem, and 5 steps to sell your solar home.
Do Solar Panels Increase Home Value? (The Short Answer)
Yes, solar panels do raise the value of a home, but only if you are the only owner. When selling, homeowners who bought cash or have settled their solar loan should anticipate a premium of 4 to 7%. That is an additional $16,000 to $28,000 on a $400,000 house.
You won’t notice much of a value gain, though, if you signed a power purchase agreement (PPA) or leased your solar panels. Even worse, some sellers choose not to take over your lease. This article goes on to discuss why and how to address it.
What the Numbers Say: Real Research, Real Dollars
Let’s begin with the actual statistics. This question has been studied for years, and the findings are accurate.
Zillow Study (2019)
Solar homes go for 4.1% more than homes that are pretty much the same but without solar. For a median-priced house, that ends up being around $9,274 extra.
Zillow Update (2026)
The solar premium has grown. Now, solar homes seem to sell for about 6.9 % more , you know, roughly. That’s around $15,000 to $29,000 extra.
NREL Rule of Thumb
The National Renewable Energy Laboratory has a simple formula. For each $1 you save each year on electricity, your house value goes up by $20, it’s pretty simple, but somehow still easy to miss.
So if you manage to save $1,200 on your annual electricity bill, then you’re looking at a home value increase of $24,000.
International Data for Context
In Australia, solar adds about $14,000 up to $31,000 depending on the city or just how the market feels that year. But in New Zealand, where the electricity bill is cheaper, solar only adds a 1.34% premium. This tells us that your home’s value increases with the amount of electricity you conserve.
Single Factor Determines Everything (Owned, Financed, or Leased)
Before you read another word, figure out how you paid for your solar panels. That answer tells you whether they help or hurt your home sale.
Owned Solar (Cash or Paid-Off Loan) – The Gold Standard
This is the best situation for selling. When you own your solar panels outright, you have no monthly payments. The buyer simply takes over a system that saves them money every month.
Benefits of Owned Solar
- Adds 4-7% to home value
- Transfer is free and simple
- Works like any other home feature (roof, HVAC, windows)
- Maximum value, easy sale
If you paid cash or have paid off your solar loan, you are in the best position possible.
Financed Solar (Loan Not Paid Off) – Complicated but Doable
If you still owe money on your solar loan, you can still sell. But you have work to do.
Options When Selling
Pay off the remaining loan from your sale proceeds.
Have the buyer take over the loan payments.
Both are possible. But both require clear communication and extra paperwork. Some buyers will hesitate. Most will agree if you handle the loan payoff at closing.
Still, financed solar adds value. It is just more work to sell.
Leased Solar or PPA (The Problem Child)
Here is where things go wrong. If you leased your solar panels or signed a power purchase agreement (PPA), you have a problem.
Why Leased Panels Cause Problems
- The buyer must qualify to take over the lease (credit check required)
- Lease terms often have 10-15 years remaining
- Monthly lease payments reduce what the buyer can afford for their mortgage
- 58% of real estate agents say leased panels complicate or kill deals
Many buyers simply walk away when they see a solar lease. They do not want another monthly bill. They do not want to qualify for someone else’s contract.
Does Location Matter?
Yes, where you live changes everything. Where electricity is expensive solar panels add the most value.
Solar Value Breakdown by State
- New Jersey: ~9.9% premium (highest in the US)
- California: 5-10% premium (higher with battery storage)
- New York: ~5.4% premium
- Massachusetts: 5-8% premium
- Florida: 4-7% premium
- Texas: 4-6% premium (higher in Austin and Houston)
- Arizona: 4-6% premium
- Nebraska / Wisconsin / low-sun states: Less than 2% premium
For international context, New Zealand shows what happens when electricity is cheap. They have a only 1.34% solar premium.
The higher your electricity bill, the more value solar adds. In expensive states like California and New Jersey, solar is a major selling point. In cheap electricity states, buyers care less.
The Hidden Problem: Appraisers Often Miss the Mark
Here is something most articles will not tell you. Even if a buyer wants to pay extra for your solar panels, the bank’s appraiser sets the ceiling.
And many appraisers do not know how to value solar.
What Goes Wrong
- Appraisers use comparable homes without solar
- Many appraisers have no training on solar valuation
- Although there are Fannie Mae requirements, not everyone follows them
What You Can Do About It
- Get a solar appraisal from an expert
- Save all paperwork, including production data, warranties, and purchase agreements
- Find a real estate agent who has sold solar homes before
- Provide recent comparable sales of solar homes in your area
Don’t assume the appraiser will be accurate. Give them the information they require to execute their jobs.
Can Solar Panels Actually Hurt Your Home Sale?
The short answer is no, if you own them. But yes, if you lease them.
Scenarios Where Buyers Walk Away
- Leased panels with 10+ years remaining
- Old panels (15+ years)
- Poor installation
- Unrealistic seller expectations
What the Buyer Data Says
83% of buyers say they would pay more for a home with owned solar.
Only 20% of buyers are interested in a home with leased solar.
Fannie Mae, the organization that sets mortgage rules, says lenders accept solar as a home feature. But leased systems require extra paperwork that some buyers want to avoid.
What About Battery Storage? Does That Change the Numbers?
Yes, battery storage adds even more value, especially in areas with power outages.
Why Battery Matters to Buyers
- Buyers value energy independence
- Battery provides backup during grid failures
- California and Florida buyers specifically seek solar plus battery after wildfire and hurricane seasons
Although there isn’t much data on battery storage value, early results point to a 10–20% premium over solar-only homes.
Will Solar Panels Increase My Property Taxes?
It depends on your state. Many states offer property tax exemptions for solar.
State Examples
- California: Property tax exemption until 2029
- Texas: 100% property tax exemption for solar
- Florida: 100% property tax exemption
- New York: No exemption, solar does increase taxable value
Actionable advice: Before installing solar, Google “[your state] solar property tax exemption.” Some states require filing paperwork. Do not skip this step.
Selling Your Solar Home? Follow This 5-Step Checklist
Step 1: Confirm Ownership
Look at your solar contract. Do you own the panels, or do you pay a lease or PPA? This changes everything.
Step 2: Gather Your Documents
You will need your purchase contract, installation date, warranty, monthly production data, and any remaining loan or lease paperwork.
Step 3: Calculate Your Value
Use the NREL method, yearly electricity savings multiplied by 20.
If you save $1,200 a year then the additional worth comes out to around $24,000.
Step 4: Find the Right Agent
Ask potential agents something like:
“How many solar homes have you sold?”
and
“Do you have appraisers who can value solar correctly?”
If they hesitate, move on.
Step 5: Disclose Everything Upfront
Tell buyers immediately if panels are owned, financed, or leased. Surprises kill deals.
Pro Tip for Your Listing
This line must appear in your listing:
The buyer saves $1,200 annually on electricity because to owned solar panels. That increases the value of the house by $24,000 by NREL standards.
Conclusion
Solar panels increase home value, but only if you own them. Owned systems add 4-7% ($15,000-$25,000 on an average home). Leased systems add little to nothing.
Location affects; the highest premiums are found in states with high electricity costs. In places where outages are common, battery storage offers even more value.
If you are selling, gather your documents, find an agent who knows solar, and be upfront about ownership. If you are buying solar for resale value, buy the system outright. Do not lease.
Your solar panels are an asset. Sell them like one.