Do solar panels increase home value?
Do solar panels increase home value?
$20 increase in home value for every $1 in energy bill savings
1% – 2%+ potential increase in home value
Does solar increase home value?
Yes, solar panels increase home value in most cases. The demand for homes with solar energy has grown significantly as more homeowners become environmentally conscious and electricity rates continue to rise. The increase in home value depends on your location, local utility rates, and other factors we'll cover in this guide.
Quick facts:
Homes with solar panels often sell 10% to 15% faster than homes without them.
Zillow's 2023 Consumer Housing Trends Report indicates that 64% of home buyers see energy efficiency as "extremely important."
A 2023 report from the National Association of Realtors (NAR) Research Group notes that 63% of realtors said promoting energy efficiency in home listings was valuable.
How much do solar panels increase home value?
Home sales and trends across the country can give some insight into how solar energy may affect your property value. Multiple studies have analyzed the impact of solar panels on home values. Here is what the research shows:
According to the Appraisal Journal, a home's value increases by $20 for every $1 of utility bill savings from a solar energy system. While this research is over 15 years old, utility bills continue to increase, so the savings are likely just as important—if not more so—to homeowners and potential buyers today.
A study led by the U.S. Department of Energy's Lawrence Berkeley National Laboratory analyzed about 22,000 home sales across eight states between 1999 and 2013 and showed solar systems increased home value by $4 per watt on average, or around $15,000 for a typical system.
Zillow research showed homes with solar-energy systems sold for 4.1% more on average between March of 2018 and February of 2019. Additionally, some sold up to 10 days faster than listings that didn't mention eco-friendly features.
More recent Zillow research of over 3 million home sales in 2020 and 2021 showed listings that mentioned solar panels sold for 1.4% more on average, a bit less than previous research, but still positive.
Rocket Homes research data for homes sold in 2021 showed that listings mentioning solar power sold 13.3% faster and were 24.7% more likely to sell above the asking price.
Factors that influence solar panels' added value
While solar energy consistently adds value, the exact dollar amount depends on several factors. Like other home systems, solar panels lose some value as they age. A well-maintained system early in its 25-to-30-year lifespan will provide higher returns than an older, neglected one.
Other key factors include your location and whether you own or lease the panels.
Location, location, location
A home's location impacts how much value solar adds in multiple ways:
Electricity rates: Homes in areas with high energy costs benefit more from solar savings, increasing value.
Grid stability: A solar panel system is more valuable in areas that experience frequent power outages.
Sunshine: The more sun an area gets, the more energy the solar panels will produce, boosting their value.
Available incentives: States and utilities with strong solar incentives make the systems more valuable by offsetting installation costs.
Install solar panels in a shade-free location facing southward for maximum effectiveness.
Solar market
The Solar Energy Industries Association (SIEA) named California, Texas, and Florida the top 3 states in terms of solar capacity. Homes in these mature solar markets often see higher added value from installing solar.
| State | Average installed cost* (after tax credits) |
|---|---|
| California solar panels cost | $8,800 – $12,100 |
| Texas solar panels cost | $9,100 – $21,000 |
| Florida solar panels cost | $14,600 – $18,500 |
*Based on the average home size for the state.
Other states in the SEIA's top 10 include North Carolina, Arizona, Nevada, Georgia, New Jersey, Virginia, and Massachusetts.
As of January 1, 2020, California requires solar-energy systems on all new residential homes.
Solar markets vary by state, but they can also vary from city to city within each state.
Owned vs. leased solar systems
The average solar panel installation costs $12,600 to $31,500 after tax credits. Most homeowners recoup this cost through a combination of increased home value and long-term energy savings. Purchasing solar panels outright typically adds more resale value than leasing, but leased panels can still boost value in the right market by reducing electric bills.
Having solar panels can make your home more attractive in some markets, but selling a home with leased panels adds complexity to the buying/selling process, which could deter some potential buyers.
Some solar leases may be transferred to the new homeowner, but the new owner must qualify. Otherwise, you'll need to pay the balance to close out your lease, which could be a significant amount depending on how much time is left on it.
Check out our in-depth guide on leasing vs. buying solar panels for more detail about the differences, pros, and cons of each.
Do solar panels increase property taxes?
In many states, residential solar panels are exempt from increasing property taxes. Some states have explicit exemptions for solar, while some treat solar like other home improvements that don't trigger a reassessment. Still, others have no statewide exemption but may allow exemptions at the county level.
The table below details the residential property tax exemption information for each state as of the date of this guide's publication.
| States with 100% exemption (unless otherwise noted) | ||
| Alabama Arizona California (until 2025) Colorado Connecticut District of Columbia Florida Indiana Iowa (for 5 years) |
Kansas Louisiana Maine Maryland Massachusetts (for 20 years) Michigan Minnesota Missouri Montana (for 10 years) New Jersey |
New Mexico New York (for 5 years) North Carolina (80% exempt) North Dakota (exempt for 5 years) Oregon Rhode Island South Carolina Texas Vermont Wisconsin |
| States with local exemptions | ||
| Alaska Hawaii New Hampshire Ohio Virginia |
||
| States with system-based exemptions | ||
| Illinois Nebraska Tennessee |
||
| States with no residential exemption | ||
| Arkansas Delaware Georgia Idaho Kentucky Mississippi Nevada |
Oklahoma Pennsylvania Utah Washington West Virginia Wyoming |
|
How to save on the cost of solar panels
Follow these tips to reduce the upfront costs of a solar energy system and maximize the return on your investment:
Shop around for quotes to find the best installation price from reputable
Check the Database of State Incentives for Renewables & Efficiency (DSIRE) for available solar incentives and their requirements in your state and city.
Apply for all possible federal, state, utility, and local incentives, tax credits, and rebates. Most new solar systems qualify for a 30% federal Residential Clean Energy Credit. This tax credit reduces to 26% in 2033 and to 22% in 2034.
Use low-interest financing options like solar loans or Property Assessed Clean Energy (PACE) programs.
Consider smaller panel systems to match your electricity usage needs.
Purchase solar panels outright instead of leasing if possible.
Consider adding solar battery storage if you're not eligible for net metering. Solar battery prices range from $6,000 to $13,000+ before installation.
Solar panel FAQs
How long do solar panels last?
Professionally installed solar panels last 25 to 30 years on average when properly maintained. Location, climate, panel type, and equipment quality all impact a solar energy system's lifespan. Other components of the system typically need repair or replacement sooner than the panels themselves.
Can you take solar panels with you when you move?
Technically, you can take solar panels with you when you move, provided you own them. However, leaving the panels installed is the wisest choice for two major reasons:
Solar panels often come with 20- or 30-year warranties. Removing the panels will likely void this warranty, meaning the panels won't have warranty protection at the next place you install them.
Removing solar panels risks damaging the roof, which could negatively impact your home value and sale price.
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.