Do solar panels increase home value?

Owned solar panels add an estimated $15,000–$30,000 to a typical U.S. home’s resale price — roughly $3–$4 per watt of installed capacity — according to Lawrence Berkeley National Laboratory transaction data. Whether that premium exceeds what you paid depends on your market, system size, and whether you own or lease the panels.

What the research says

Lawrence Berkeley National Laboratory’s “Selling into the Sun” study, the most-cited peer-reviewed analysis of actual transaction records, found California buyers consistently paid about $4/W for homes with solar — roughly $20,000 for a 5-kW system. A 2019 Zillow analysis put the national average premium at 4.1% of sale price, meaning a $420,000 home could sell for roughly $437,000 with panels installed.

Both analyses focused on owned systems. Neither is a guarantee. The premium reflects what buyers in a given market will pay for lower future utility bills. Where electricity rates are high and solar adoption is common, buyers price the savings in. Where rates are low or solar is unfamiliar, the premium compresses or disappears.

If you haven’t installed yet and are still weighing the full financial picture, are solar panels worth it? covers the payback math in detail.

Owned vs. leased: the most important distinction

Ownership determines whether solar adds to your home’s value at all.

Own the panels — paid in cash or through a solar loan — and the system is part of your real property. It transfers cleanly to the buyer, who inherits the equipment, the warranty, and the electric bill savings. Appraisers can assign it a dollar value. Buyers can finance a home that includes owned solar just like any other real property.

Leased systems and power purchase agreements (PPAs) work differently. A third-party company owns the equipment. You signed a contract — often 20–25 years — to buy the electricity it produces at a set rate. When you sell, the buyer must either assume that contract or you must buy it out before closing. Some buyers won’t take on a long-term agreement with a company they’ve never heard of. Even when they will, the lease does not appear as an asset in an appraisal; it shows up as a liability to be disclosed.

Leases and PPAs can still benefit buyers. If the contract rate is below what the utility charges, a buyer saves money from day one. But that savings does not translate into a higher appraised sale price. The resale premium belongs to owned systems only.

The commercial Investment Tax Credit (§48E) still applies to leasing companies even though the residential federal credit expired at the end of 2025. That’s part of why lease and PPA pricing can remain competitive — the company captures the credit and passes some savings through the contract rate.

How the premium varies by market

No national figure captures your situation precisely. Markets range from generous to negligible:

Market type	Typical premium per watt	Example states
High-rate, high-adoption	$4–$5/W	California, Massachusetts, New York
Moderate electricity rates	$2.50–$3.50/W	Arizona, Texas, Colorado
Low-rate or low-adoption	$1–$2/W	Louisiana, West Virginia, parts of the Midwest
Leased or PPA system (any market)	$0 (or complicates sale)	All states

These figures vary with system age, inverter condition, and local buyer demand. A 15-year-old system with an original inverter appraises very differently from a new installation.

Worked example: a $420,000 home in Phoenix

Say you own a home in the Phoenix metro worth $420,000 and you’re considering an 8-kW owned system. In 2026, installed cost runs about $2.90–$3.20 per watt before incentives — call it $25,000 gross.

There is no federal residential solar tax credit in 2026. IRC §25D expired December 31, 2025. Arizona offers a state income tax credit of 25%, capped at $1,000, plus a sales-tax exemption on solar equipment. After state incentives, your out-of-pocket is closer to $24,000.

Using a conservative $3.50/W premium estimate for a moderate-adoption market like Phoenix:

• 8 kW × $3.50/W = $28,000 estimated resale premium
• Net system cost after state credit: ~$24,000
• Estimated spread: ~$4,000 in your favor at sale

That calculation ignores years of electricity savings before you ever list the home. In Phoenix, 8 kW can offset $1,800–$2,200 per year on your electric bill. Hold the home five more years and you add another $9,000–$11,000 to the ledger. Run the numbers for your address with the solar savings calculator to see what annual savings look like at your utility rate and location.

Actual sale premium depends on buyer demand, appraiser methodology, and market conditions when you sell. Ask your real estate agent whether solar homes in your neighborhood have commanded documented premiums before assuming the $3.50/W figure applies to you.

No federal tax credit in 2026

This changes the math materially. A $25,000 system that generated a $7,500 federal credit if placed in service by December 31, 2025 now carries its full cost. That affects both your payback period and the economics of ownership versus leasing.

State incentives remain and vary widely — some meaningfully reduce system cost. Check solar incentives by state for what’s active where you live, and confirm details with a licensed tax professional before you commit. Incentive program caps fill quickly and eligibility requirements change.

Property-tax exemptions: a quiet but real benefit

More than 25 states exclude the added value of a solar system from your property tax assessment. California, Florida, Texas, Arizona, and New York are among them. Your home’s market value rises, but your annual property tax bill does not increase to reflect the solar premium — making the added value essentially tax-free to hold.

Without this exemption, the appraised value increase flows through to your assessment. Factor the additional annual property tax into your payback estimate. Over a 10- or 15-year hold, it matters.

What buyers actually look for

Ownership clarity. An owned system with no UCC-1 lien on the equipment is a clean transfer. If you financed the panels through a loan secured against the system itself (not your home), confirm whether it requires release before closing and plan accordingly.

Transferable warranties. Panel warranties typically run 25 years; inverter warranties, 10–12. Warranties that transfer to the new owner are a meaningful selling point. Confirm yours are transferable and have the paperwork ready.

A production history. Twelve months of monitoring data showing output at or near rated capacity is more persuasive than a spec sheet. Unexplained production drops need explanation before you list.

A mid-life or recently replaced inverter. Inverters fail before panels do. A system with an aging string inverter approaching year 10 or 11 is a negotiating point — either price it in or replace the inverter before listing.

Maximizing the premium at sale

Show the utility bills, not just the system specs. Twelve months of near-zero net electric bills makes the value tangible. Buyers who can see what they won’t be paying are more motivated than buyers who have to calculate it themselves.

Request a solar-specific appraisal method. Tools like the PV Value model give appraisers a structured income-based approach for valuing a system. Not all residential appraisers use them. Ask your listing agent whether solar appraisals in your market are consistent or variable — if variable, supply the appraiser with as much documentation as you can.

Don’t over-build for your neighborhood. In a market where homes top out at $280,000, a $30,000 solar installation will not add $20,000 in sale price. The percentage premium is anchored to neighborhood comps. Get itemized quotes from multiple installers and size the system to your electricity consumption, not the largest the roof can hold.

The resale case for owned solar is real and well-documented. In 2026, without the federal credit, the premium and the energy savings carry more of the weight than they did a year ago. Do the math for your market, verify current state incentives, and get itemized quotes before you sign anything.