Solar Power Rocks logo

Solar Power Rocks - Clear info on home solar power rebates, tax credits, and other benefits

Do solar panels increase home value? Yes they do.

Avatar for Ben Zientara
Published on 04/09/2019 in
Updated 04/19/2019
Solar Panels Increase Home Value

Switching to solar power can pay you back in more ways than a lower electric bill. You get environmental benefits, other solar incentives like SRECs, and, oh yeah solar panels increase home value.

Study after study after study comparing sales of solar and non-solar houses show clearly that homes—even near-identical homes in the same community—sell for more with solar. Even if you sell your home before you’ve had the opportunity to use solar power over a long period, the panels are still a good investment.

The most convincing study of all came in 2015, and surveyed solar homes in six states. The researchers concluded that the average solar home price premium was about $3.78 per watt, which ended up about equal to the cost of the systems after incentives.

And most recently, in April of 2019, Zillow published findings that indicated an average home price increase of nearly $9,300 for homes with solar panels, concurrently pointing out that “80% of home buyers say energy-efficient features are important.”

How solar panels increase home value

Why do buyers pay more for homes with solar power? A home solar system is not just a shiny technological doodad on the roof. Solar panels generate energy and save money!

We at Solar Power Rocks used to apply an old rule that solar panels would increase home value by about the value of 20 times the first years’ electricity bill savings, but with the data from the 2015 study, it’s pretty clear that the better way is to simply use cost of the system minus tax incentives.

The great thing here is this is a dual benefit. or maybe even triple benefit! See, installing solar panels increases you home’s resale value, but it also saves you money every month on electricity bills. And on top of that, many states have other solar incentives that earn you even more savings. The final benefit is the federal solar tax credit, which can save you thousands of dollars on taxes this year.

If you’re considering solar for your home, get multiple quotes for solar and compare to see how much you can save!

How much could solar panels increase your home’s value?

The average American home needs about 21 320-watt solar panels to supply its power needs for one year (that’s a 6.72-kW solar system for the folks keeping score at home). To find out your own solar needs, use our solar panel calculator.

That average 6.72-kW system might cost about $22,000 before any incentives. Take the 30% tax credit off that price and you get $15,400. With a nationwide median home price (PDF) of around $315,000, the average homeowner can expect their home to increase in value by about 5% if they install a home solar system.

Of course, your needs may vary, so consult a licensed solar provider near you for more information.

When is it bad for home value to install solar panels?

There are all sorts of offers out there from solar companies. Some of them say “Free solar panels!” or “$0 down solar! Start saving from day 1!”

It’s important to be wary of these offers. Solar power is worth the cost in several states, and there are $0-down solar loans that can have you owning the system and paying off the loan in as little as 10 years. But more often, these offers are tied to special agreements called Solar PPAs, or Power-Purchase Agreements. Under a PPA, the solar company owns the panels and you pay them only for the electricity.

PPAs can be an okay way to get solar if you don’t have any equity or credit, but the PPA provider usually puts a lien on your home, and that can complicate things when it comes to sale time. A PPA might also turn off a potential buyer, because it’s not something they’ll own themselves, but instead an obligation (even if it makes financial sense and they will save money, it’s still a long-term contract.

Another special kind of solar loan called a PACE loan relies on special property-tax assessments that allow you to repay your loan on your tax bill. While the very existence of PACE loans confirms the fact that your home value increases when you install solar, in practice, PACE loans can be problematic, because they also usually come with a lien against your home, and make selling the home more difficult.

The best way to pay for solar is still good old cash or home equity, which allow to you own your home solar system outright and reap the full benefits when you sell.

Infographic: Homes with Solar Panels Sell for More

Infographic: Solar Panels increase the value of your home

Like this solar infographic? Copy and paste the code below to embed it on your site!

Read more about how solar can increase the value of your home at our older blog: “Are Homes With Solar Really Worth More?”

Last modified: April 19, 2019

3 thoughts on “Do solar panels increase home value? Yes they do.

  1. Avatar for Billy Billy says:

    Thanks for sharing this! I think it would definitely be beneficial for all home owners to at least think about the idea of investing in solar.

  2. Avatar for Ben Hoen Ben Hoen says:

    Dave, I am the lead author of the California Lawrence Berkeley Laboratory Study and want to inform your readers that relying on a study that was based on sales from many years ago drawn from areas of CA that might be very different from a particular home is inappropriate. We were very clear that the study measured average impacts at that time for our sample. If practitioners want to determine the contributory value of solar of a particular home they would want to base it on it’s particular market characteristics at a particular point in time (such as the time of sale). For example, calculating the present value of energy savings of a particular home’s solar system over time is one of three methods practitioners can use to determine value. This is called the income method and a tool to estimate these values can be found at A second method involves estimating the replacement cost less applicable incentives at the time of sale, and those values could be obtained from local installers. A third method is to derive the local contributory value from a comparison with other sales of homes with solar locally. Using these three methods practitioners might better understand what value solar has in their area at a particular point in time. Finding a qualified appraiser to estimate these values would be prudent and they can be found through the Appraisal Institute.

    1. Avatar for Ben Zientara Ben Zientara says:


      Thanks for writing, and thanks for expounding on the best practices for determining the solar price premium for any given home. At this time, we have several articles that draw data from many studies related to the home solar price premium, including this infographic and this article, but it’s high time we consolidated those with the article you commented on into a single, unified piece that both covers the various data points in a holistic way and lays out how appraisers might be contracted to do the work of determining the solar price premium for any given home.

Have anything to add?

Your email address will not be published.

Subscribe to get solar news

The Federal Solar Tax Credit Has Stepped Down. It Steps Down Again In:

Learn more about the Federal Solar Tax Credit before it goes away.

Solar Power Rocks is a Wave Solar company

Wave Solar Logo