Do Solar Panels Increase Home Value? What US Sellers Should Know

By HomeSolarStudio Team21 October 20269 min readCosts & Savings

Do solar panels increase home value?

Yes — but mostly when you own the system outright. Research from Lawrence Berkeley National Laboratory found that buyers paid roughly $4 per watt of installed solar capacity, adding meaningful value to homes with owned systems, while a Zillow analysis found solar homes sold for about 4.1% more on average than comparable non-solar homes. Leased systems and power purchase agreements (PPAs), on the other hand, often add little resale value and can complicate a sale.

If you're planning to sell a home with solar panels, the ownership structure of your system matters more than anything else. Below is what the data shows, how appraisers treat solar, what buyers worry about, and how to prepare your home for a smooth sale.

Key takeaways

Owned systems add the most value. A Zillow analysis found solar homes sold for about 4.1% more on average than comparable non-solar homes, and estimates cited by ConsumerAffairs range from roughly 4% to 10% depending on location and system quality.
Leases and PPAs can slow a sale. Buyers must qualify to assume the lease payments, or the seller typically buys out the contract before closing.
Appraisers need documentation. System size, age, ownership, and utility savings all influence how solar is valued.
Property tax treatment varies by state. Property tax treatment of solar varies by state, so check your local rules before listing.
Gather your paperwork early. Contracts, warranties, monitoring access, and interconnection agreements make your listing far more attractive.

What the research says about solar panels and home resale value

Two of the most widely cited studies paint a consistent picture. Lawrence Berkeley National Laboratory has conducted multi-state research on home sales that found buyers regularly paid more for homes with solar energy systems. On average, solar added approximately $4 per watt of installed capacity, which translated to around $15,000 of additional value for a typical residential system, according to EnergyScout.

A separate Zillow housing market analysis found that homes with solar panels sold for about 4.1% more on average than comparable homes without them across the US markets studied. Surveys of homebuyer preferences, including research cited by Zillow, suggest that energy-efficient features such as solar are generally viewed favorably by many prospective buyers.

ConsumerAffairs reports that data suggests solar panels can increase home value by roughly 4% to 10% depending on the location. Keep in mind that these figures are averages from studies of past sales — they are illustrative, not a guarantee for your specific home. Local electricity prices, real estate market conditions, system age, and buyer preferences all influence the actual premium in your area.

Owned vs. leased solar panels when selling a house

The single biggest factor in whether solar adds resale value is how the system was financed, according to SolarEnergySimplified. Here's how the three common structures differ:

Owned systems (cash or paid-off loan)

When you own the panels outright, they're part of the real property — like a remodeled kitchen or a new roof. The buyer inherits a working system with no monthly payment attached, and the appraiser can treat it as a home improvement. Owned systems consistently show the strongest resale premiums in the research.

Financed systems (active solar loan)

If you're still paying off a solar loan, the outcome depends on the loan type. Either way, expect the payoff to be handled through escrow, and make sure your title and payoff information is ready early.

Leases and PPAs

Leased systems and power purchase agreements are the most common source of friction in solar home sales, according to NorthSolarCalc. Because the buyer doesn't own the panels, they must either qualify to assume the existing lease payments, or the seller has to pay to buy out the remaining contract before closing. Both paths can slow down or complicate a transaction compared to a simple owned system, and some buyers simply walk away when they see a lease attached.

If you have a lease and want to sell, contact your solar provider well before listing. Ask for the buyout amount, the transfer process, and whether the agreement is transferable to a new buyer. Having these answers ready prevents surprises during escrow.

How appraisers evaluate homes with solar panels

Appraisers don't automatically add a fixed dollar figure for solar. They look for comparable sales of solar homes in your area, and they consider the specifics of your system:

System size and production. Larger systems that offset more of the home's electricity use are generally worth more. Documentation of actual production helps.
Age and condition. Panels typically degrade slowly over decades, but an older system closer to the end of its warranty period adds less value than a new one.
Ownership. A leased system is generally treated as a monthly expense, not an asset, so it may add little to the appraised value.
Remaining savings stream. Buyers see an owned solar system as lower electricity bills for years to come — a value the appraiser may capture through comparable sales or income-based adjustments.

Before listing, ask your real estate agent whether your local market has enough solar comparable sales to support a premium. In areas where solar is common, appraisers are more practiced at valuing it. Provide them with the system's installation date, size in kilowatts, ownership status, and utility bill history.

What buyers worry about with solar homes

Understanding buyer concerns helps you address them before they become objections:

Who owns the panels? This is the first question most agents and buyers ask. An owned system is a selling point; a lease raises monthly-cost questions.
What happens to the payment? Buyers want to know if they'll inherit a lease payment, and whether that payment is offset by the electricity savings.
Roof condition. Buyers may ask about the roof's age and whether panels complicate future roof replacement. Have records of any roof work done during or before installation.
Warranty transferability. Equipment and workmanship warranties often transfer to new owners, but the process varies by manufacturer and installer. Get the details in writing.
Maintenance and monitoring. Showing that the system has been monitored and performing as expected builds buyer confidence.

Solar panels and property taxes: what sellers and buyers should know

In many states, adding solar panels does not trigger a property tax reassessment — several states offer property tax exemptions for renewable energy systems, meaning the added value isn't taxed. However, rules vary significantly by state and can change over time, so check your state's current law or ask your county assessor.

When selling, be ready to explain the tax treatment to buyers. If your state exempts solar from assessment, the buyer gets the energy savings without a property tax increase — a genuine selling point worth stating in your listing. If your state doesn't exempt solar, the assessed value may rise slightly, and buyers will factor that into their offer.

One related note for sellers: federal tax incentives for residential solar have changed over time, so buyers may or may not factor them into their offers depending on current rules. This isn't tax advice — consult a tax professional for your situation. This isn't tax advice — consult a tax professional for your situation.

Practical tips for selling a home with solar panels

A little preparation goes a long way toward capturing solar's resale premium:

Organize your documents. Gather the purchase contract or lease, installation permits, interconnection agreement with your utility, warranties, and monitoring login details.
Know your numbers. Record your system's size (kW), annual production, and your average utility bills before and after installation. Concrete savings figures are persuasive.
Resolve lease questions early. If you lease, request the buyout quote and transfer requirements before you list, not after you get an offer.
Work with a solar-savvy agent. An agent experienced with solar homes can market the system correctly and set buyer expectations.
Highlight ownership in the listing. "Owned solar system, 7 kW, installed 2023, transferring warranties included" is far more attractive than a vague mention of panels.
Keep the system running. Make sure panels are clean, inverters are functioning, and monitoring shows normal performance during showings and inspections.

How much value can you realistically expect?

Putting it all together, the research suggests a rough range rather than a promise. Lawrence Berkeley National Laboratory's figure of about $4 per watt implies that a common 6 kW owned system could add close to $24,000 in high-electricity-cost markets, per NorthSolarCalc. Zillow's 4.1% average premium and ConsumerAffairs' 4% to 10% range give additional context, though these numbers vary by market.

Factors that push value toward the higher end include:

High local electricity rates, where the savings stream is worth more
A newer, larger system with transferable warranties
Full ownership with no payments attached
Strong local demand for energy-efficient homes

Factors that reduce or eliminate the premium include an aging system, a lease the buyer must assume, deferred maintenance on the roof, and markets where solar is unusual or undervalued by appraisers.

FAQ

Do solar panels increase home value if they're leased?

Generally, leased systems add little to no appraised value because the buyer doesn't own them. The lease can also complicate the sale, since the buyer must qualify to assume the payments or the seller must buy out the contract. Some buyers see a low fixed energy payment as a benefit, but many see it as a liability.

Do solar panels raise property taxes?

It depends on your state. Many states exempt solar systems from property tax assessment, so the added value isn't taxed. Others do not, which can slightly increase assessed value. Check with your county assessor or state energy office for current rules.

What happens to my solar loan when I sell my house?

Unsecured solar loans usually remain your personal obligation, and the panels convey with the house. Loans secured by the system or property are typically paid off at closing like any other lien. Ask your lender for a payoff statement early in the selling process.

Should I pay off my solar lease before selling?

Often yes, if you can afford the buyout. An owned system is simpler to market, appraise, and transfer, and it avoids the buyer-assumption hurdle that causes some deals to fall through. Compare the buyout cost against the likely effect on your sale price and timeline with your agent.

Do buyers actually want solar panels?

Broadly, yes. Zillow's 2023 consumer survey found 80% of prospective buyers rated energy-efficient features, including solar, as "very" or "somewhat" desirable. That survey reflects stated preferences rather than actual purchase behavior, which varies by market.

Bottom line

Solar panels can increase home value — the research consistently shows premiums for owned systems, often around 4% and sometimes more — but the premium is never automatic. Ownership structure, system age, local electricity prices, and quality documentation determine what you actually capture at sale. If you're weighing solar as a pre-sale upgrade, it's worth understanding how the numbers work in more depth: our guide on how solar panels increase home value covers the underlying studies, and our explanation of how solar panels work can help you speak confidently with buyers and appraisers. If you're shopping for a system with resale value in mind, our complete solar panel buying guide walks through ownership and financing choices that matter most when it's time to sell.

Sources

This article is general information, not tax, legal or financial advice. Figures are illustrative; confirm current rules and incentives with the official program or a qualified professional. HomeSolarStudio.com is a Powur Ambassador. Learn more