Do Solar Panels Increase Home Value?

Solar panels can increase a home’s value by about 4% on average — or $20 for every dollar that solar decreases your annual utility bills — provided you own the solar panels or shingles. For a median-value home, solar panels can add over $9,000 to the home’s overall price ^[0]

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As long as you’ve purchased (rather than leased) solar panels or shingles, going solar can add to the value of your house. Where you live has a significant impact on what your home-value increase will be, however. Homes in states with bigger solar incentives and bigger solar markets may see bigger price differences. Some of these states include:

• California.

• Texas.

• Florida.

• North Carolina.

• Arizona.

• Nevada.

• Georgia.

• New Jersey.

• Virginia.

• New York ^[0]

  Solar Energy Industries Association. Top 10 Solar States. Accessed Jun 12, 2024.

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Purchasing solar panels or shingles shouldn’t make it harder to sell your house, because they tend to increase a home’s value by making it greener and lowering electric bills. If you opt for a solar lease, however — which means you’re renting the solar panels with a long-term lease rather than buying them — it may be harder to sell your home.

Potential buyers may not want to assume the lease agreement and ongoing payment obligations in addition to a mortgage. This is why if you plan on selling your home, it may make more sense to purchase rather than lease a solar array.

» MORE: Check out our free solar loan calculator to estimate payments

Adding solar panels doesn’t increase everyone’s home value by the same amount. Other factors influence how much your home’s value might rise, such as:

• Age of your solar system. If your panels or shingles are nearing the end of their productive years, your home value won’t rise as much with a system that's fairly new (less than 10-15 years old). 

• Condition of your solar system. If you’ve properly maintained your system, you’ll likely see a larger increase in home value than if the panels are unmaintained, worn or damaged.

• Ownership of panels. Typically, you need to own the solar panels to see an increase in property value. Leasing solar panels often doesn’t add to a home’s value, because potential buyers may hesitate to assume responsibility for your lease agreement.

• Solar market. Homeowners in states with growing solar markets, solar-friendly laws and local incentives may expect relatively large increases in property values.

• Local electric rates. Solar homes in states with higher costs for grid electricity may get a bigger premium.

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The cost of purchasing a solar system varies due to several factors, including:

• System size. Larger systems typically cost more.

• How much electricity your home needs. The more electricity you need, the more solar panels you’ll have to purchase.

• Location. Not all geographical locations receive the same amount of sunlight — and less sunlight means less power generation per panel. This means that people in low-sunlight homes may need to purchase larger systems to generate the same amount of electricity.

• Type of solar equipment. Many different types of panels, inverters and mounting systems are available, and costs vary depending on the type of equipment and brand you choose.

• Home and roof. Home and roof designs can affect the labor needed for solar installation.

» MORE: Do solar panels work at night?

That said, the cost of purchasing and installing an entire solar system, before tax incentives or rebates, ranges from about $21,000 and $46,000. The national average is around $34,000, according to data from EnergySage, a solar and home energy product comparison marketplace founded in 2012.