Do solar panels increase home value?
Ashburn, VA

Do solar panels increase home value?

Ashburn, VA

Do solar panels increase home value?

$20increase in home value for every $1 in energy bill savings
1% – 2%+potential increase in home value

Get free estimates for your project or view our cost guide below:

$20 increase in home value for every $1 in energy bill savings

1% – 2%+ potential increase in home value


Get free estimates for your project or view our cost guide below:
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Tara Farmer
Written by
Tara Farmer
Edited by
Tamatha Hazen
Fact-checked by
Kristen Cramer

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.

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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.

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.

Top solar states & solar system installation costs
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.

Photovoltaic solar panels installed on the roof of a modern house
Photovoltaic solar panels installed on the roof of a modern house

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.

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.

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Solar-related property tax by state
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

    solar panel installers near you.

  • 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.