Do solar panels increase home value?

Owned solar panels usually raise a home’s sale price, but the size of that premium is less certain than most sales pitches suggest. The most-cited study — Lawrence Berkeley National Laboratory’s 2015 “Selling into the Sun” — found buyers paid about $4 per watt of installed capacity, roughly $15,000 for a typical system at the time. Later work by Fannie Mae and Berkeley Lab found that premiums for owned systems dropped significantly as installed prices fell. Leased systems add little or nothing. Whether a premium covers what you paid depends on your market, your system’s age, and whether you own the panels.

What the research says

Three studies do most of the work in this debate, and all of them predate the 2026 market:

• Berkeley Lab, “Selling into the Sun” (2015). About 22,000 home sales from 2002 to 2013 across eight states, almost 4,000 of them with solar. Buyers paid an average premium of about $4/W for owned systems — about $15,000 for a typical 3.6 kW system.
• Zillow (2019). Homes with solar sold for 4.1% more on average, about $9,274 for a median-valued home at the time, with wide local variation (2.7% in Riverside, California; 5.4% in New York City). Applied to a $420,000 home, 4.1% would be about $17,000.
• Fannie Mae and Berkeley Lab, “Solar at High Noon” (2021). Owned systems were clearly associated with higher sale prices, while non-owned (leased or PPA) panels showed no value or slightly lower values. Premiums for owned systems fell significantly over the study period in the four states analyzed, in step with falling replacement costs.

That last finding matters most in 2026. A buyer has little reason to pay much more for existing panels than a new system would cost, and new systems now run about $2.57/W (EnergySage’s H1 2026 marketplace median) to $3.36/W (SEIA/Wood Mackenzie, Q2 2026) — below the prices behind the 2015 $4/W figure. Treat $4/W as a historical benchmark, not a current quote.

None of these numbers 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 under standard appraisal rules.

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, Fannie Mae’s guidelines don’t allow leased or PPA panels to be counted in the appraised value; the contract is something to disclose, not an asset.

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 clean electricity investment credit (§48E) can still apply to leasing companies even though the residential federal credit expired at the end of 2025 — for solar, only if construction began before July 4, 2026, or the system is placed in service by December 31, 2027. 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, and no recent study we can point to publishes reliable per-watt premiums by state. What the research does show is the direction:

Premiums also vary with system age, inverter condition, and local buyer demand; Berkeley Lab research has found that premiums decline as systems age. 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. Our Arizona data puts installed cost at about $2.35 per watt — $18,800 gross (estimate).

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 per residence, plus a sales-tax exemption on solar equipment. After the state credit, your out-of-pocket is about $17,800.

Now work backward instead of assuming a premium:

• Break-even premium: $17,800 ÷ 8,000 W = about $2.23/W
• That’s below the 2015 Berkeley Lab average of ~$4/W, but premiums have fallen since — so recovering your full cost at sale is plausible, not assured.

That calculation ignores the electricity savings you collect before you ever list the home. At 6.5 peak sun hours, 8 kW produces roughly 15,200 kWh a year (8 × 6.5 × 365 × 0.80). If your home uses that much and you export about half of it, Arizona’s net-billing export credit (APS pays about 5.55¢ for new applicants since September 2026, roughly 36% of the 15.4¢ statewide retail rate, the 12-month EIA average through July 2026) puts the value at roughly $1,600 a year; it approaches $2,300 only if you use nearly all of it on site. Hold the home five more years and that’s about $8,000 at today’s rates (estimate). 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 any per-watt figure applies to you.

No federal tax credit in 2026

This changes the math materially. The same $18,800 system would have earned a $5,640 federal credit (30%) had its installation been completed by December 31, 2025 — and paying in 2025 for an installation finished in 2026 doesn’t qualify. In 2026 you carry the full cost, which 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

Many states exclude some or all of a solar system’s added value from your property tax assessment. California, Florida, Texas, Arizona, and New York are among them, with conditions: California’s exclusion covers systems installed before January 1, 2027, and New York localities can opt out of its 15-year exemption. Where the exemption applies, your home’s market value can rise without your annual property tax bill rising to reflect the solar premium.

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; string-inverter warranties are usually much shorter (often 10–12 years), while many microinverters carry warranties closer to the panels’. 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 — size the system to your electricity consumption, not the largest the roof can hold.

The resale case for owned solar is real, but the best-documented premiums come from a pricier era and have shrunk since. In 2026, without the federal credit, the energy savings you collect while you live there carry more of the weight than any premium you hope to collect at sale. Before you list, ask your agent about documented solar premiums on comparable homes nearby, and keep your production history and transferable warranties organized for the appraiser — that paperwork is what turns a system into a price, not just a feature on the listing.