Do Solar Panels Increase Home Value? Real Estate Data

The Research: What the Studies Actually Say

Unlike many real estate value claims that rest on anecdote or single-market surveys, the solar home value premium has been studied rigorously across large datasets spanning multiple states, years, and market conditions. Three bodies of research form the foundation:

• Lawrence Berkeley National Laboratory "Selling Into the Sun" (2015, updated): The most methodologically rigorous study — 22,000 home sales including 4,000 with PV systems, across eight states from 2002–2013. Peer-reviewed and federally funded.
• Zillow Solar Value Report (2025): Broad transaction data across markets with sufficient solar penetration for statistical analysis. Most recently updated for current market conditions.
• National Association of Realtors (NAR) Agent Survey: Practitioner-level reporting on buyer behavior and agent experience with solar properties.

All three consistently find a positive premium for owned solar. The specific number varies by methodology, market, system age, and electricity rates — but the directional finding is robust. Solar panels, when owned, reliably add value to residential real estate.

Zillow 2025: The 6.9% Solar Premium

Zillow's 2025 Solar Value Report analyzed transaction data across markets with meaningful solar installation rates and found that homes with owned solar panels sell for an average of 6.9% more than comparable non-solar homes — a significant increase from the 4.1% premium Zillow documented in its earlier 2019 analysis.

For context on what 6.9% means in dollar terms:

• $300,000 home: +$20,700 premium
• $500,000 home: +$34,500 premium
• $750,000 home: +$51,750 premium
• $1,000,000 home: +$69,000 premium

The growth from 4.1% (2019) to 6.9% (2025) likely reflects two converging trends: rising electricity rates (which make solar savings more valuable to buyers) and increasing buyer familiarity with solar technology (reducing uncertainty discounts). As residential electricity rates have risen more than 25% nationally since 2020 per the EIA, buyers are increasingly willing to pay a premium for a home that generates its own electricity.

The Zillow data also found that Maryland stands out as the strongest solar market for home value premium — with solar homes in the Baltimore area commanding premiums as high as 7.9% above non-solar comparables. This tracks with Maryland's combination of above-average electricity rates and historically strong solar policy environment. Wisconsin was a noted exception where the premium did not consistently materialize — likely reflecting lower electricity rates that reduce the economic appeal of solar savings to buyers.

Lawrence Berkeley Lab: The $4 Per Watt Finding

The Lawrence Berkeley National Laboratory study, "Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes," remains the most authoritative academic research on the topic. Its methodology is worth understanding because it is more rigorous than a simple before-and-after price comparison.

The dataset: 22,000 home sales across California, Connecticut, Florida, Maryland, Massachusetts, North Carolina, New York, and Pennsylvania. Of those, approximately 4,000 had photovoltaic systems. Sales occurred between 2002 and 2013, covering a range of market conditions.

The methodology: Researchers used hedonic pricing models — statistical frameworks that isolate the value premium attributable to solar by controlling for other variables like square footage, lot size, location, age, and amenities. This removes the confounding effect that solar-equipped homes might simply have better-maintained owners.

The finding: Across the eight-state dataset, solar installations added approximately $4 per watt of installed DC capacity to sale price. Key implications:

Installed costs based on 2026 SEIA/Wood Mackenzie average of $2.75/W gross, 30% ITC applied. Home value premium based on Berkeley Lab $4/W finding. ROI = Home value premium ÷ net install cost. Source: Lawrence Berkeley National Laboratory, "Selling Into the Sun," 2015.

These figures suggest that in the markets studied, solar panels returned more than their net-of-ITC cost at resale — even before accounting for the years of electricity savings accumulated while the homeowner lived in the property. The investment generates returns on two separate vectors: annual electricity savings while you own the home, and a higher sale price when you leave.

Berkeley Lab also found evidence of what researchers called a "green cachet" — a premium that exists even for smaller systems, suggesting buyers value solar symbolically in addition to its financial utility. However, the incremental premium does grow with system size, consistent with buyers rationally pricing in larger future savings.

The Critical Distinction: Owned vs. Leased Solar

This is the most important nuance in the entire solar home value discussion, and it is one that many homeowners miss until they are trying to sell.

The lease problem is straightforward but frequently misunderstood. When you sign a solar lease, the financing company owns the panels — they're essentially equipment on your roof that you pay to use. From an appraiser's perspective, you cannot include someone else's property in your home's value. From a buyer's perspective, they are being asked to assume a financial obligation that may span 20 years, with credit checks and leasing company approval.

According to a Zillow consumer survey, 29% of homebuyers report being less likely to purchase a home with leased solar panels. This buyer hesitation is a real headwind for sellers with leased systems — exactly the opposite dynamic from owned systems, which accelerate buyer interest.

If you currently have a leased system and plan to sell within the next several years, explore whether you can buy out the lease. Many leasing companies offer buyout options, typically at a price that reflects the remaining contract value minus the projected electricity savings. Buying out the lease converts the liability into an asset — transforming a sale impediment into a sale accelerant.

For a complete analysis of the ownership question from a financial perspective, see our Solar Lease vs Buy guide.

Where Solar Adds the Most (and Least) Value

The solar home value premium is not uniform across the United States. Markets with higher electricity rates, stronger solar policies, and established buyer familiarity with solar show larger premiums. The driver is buyer rationality: buyers in Massachusetts ($0.27/kWh average) will pay more for solar savings than buyers in Louisiana ($0.10/kWh), because the annual savings are dramatically larger.

Premium estimates based on Zillow 2025 Solar Value Report and Berkeley Lab state-level analyses. Property tax exemption status per DSIRE database, 2026.

Wisconsin is a useful case study in what limits the solar premium. Despite having higher-than-national-average electricity rates, the state's solar penetration has been lower, buyer familiarity is less established, and local market dynamics appear to mute the premium. This suggests that even with favorable rates, market education and penetration matter — premiums tend to strengthen as more buyers in a market have personal familiarity with solar.

Property Tax Exemptions: Keeping the Full Premium

One of the most underappreciated aspects of the solar home value story is the property tax exemption available in more than 36 states. Here is why it matters: if your home increases in assessed value due to solar, most states with exemptions ensure your property tax bill does not increase proportionally.

Consider a $400,000 home in New Jersey that gains $28,000 in value from a 7 kW solar installation. At New Jersey's average effective property tax rate of approximately 2.2%, that $28,000 increase in assessed value would otherwise cost $616/year in additional property taxes. Over 25 years, that's $15,400 in extra taxes — significantly eroding the value premium. New Jersey's full property tax exemption for solar ensures you capture the full $28,000 benefit without the tax drag.

States with full or near-full solar property tax exemptions include: Arizona, Colorado, Florida, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, South Carolina, Texas, Vermont, and Wisconsin. California offers a construction-period exemption but may reassess when the property sells with a system. Always verify current state law with your county assessor or a tax professional, as exemption details and duration vary.

How Appraisers Value Solar Panels

The technical process by which a licensed appraiser assigns value to solar panels matters more than many homeowners realize — because even in markets where buyers are willing to pay a solar premium, an appraisal that fails to capture it can prevent the transaction or require a price reduction.

Three Approved Appraisal Methods

Fannie Mae and Freddie Mac (who back most U.S. mortgages) have published guidance accepting three appraisal approaches for owned solar:

• Income approach: Calculates the present value of the system's remaining electricity savings over its warranted life. Generally produces the highest valuations but requires accurate energy production data and a defensible discount rate. Best used when strong comparable sales data is unavailable.
• Cost approach: Estimates the depreciated replacement cost of the system. Straightforward but tends to undervalue solar relative to buyer willingness to pay, especially in high-rate markets.
• Comparable sales approach: Compares price differences between solar and non-solar homes in the same market. Requires sufficient solar penetration in the neighborhood to find valid comparables. This approach produces the most market-accurate valuations in mature solar markets like California, Massachusetts, and New Jersey.

A critical practical point: the Appraisal Institute publishes a "Guide Note 10" specifically for solar, and trained appraisers who have studied it will produce more accurate solar valuations. If you are selling a solar home and the initial appraisal comes in lower than expected, you can provide the appraiser with the Berkeley Lab research, your system's production history, and a list of comparable solar home sales — all legitimate inputs that an appraiser can consider.

Does System Age Reduce the Home Value Premium?

Berkeley Lab's research found that the home value premium does decline with system age — a finding that is logical and consistent with buyer economics. A brand-new system with 25 years of warranty and near-peak production remaining is worth more to a buyer than a 15-year-old system with declining output and reduced warranty coverage.

The Berkeley Lab data suggests the depreciation is gradual rather than cliff-edged. A 10-year-old system in a market where buyers understand solar will still command a meaningful premium — it just reflects the shorter remaining payback period. In their dataset, systems lost approximately $0.10–$0.15 per watt per year of age, suggesting a 7 kW system that was worth $28,000 new might be valued around $18,000–$21,000 at age 10.

The remaining warranty coverage plays a significant psychological role. A 10-year-old system with an active 25-year performance warranty (15 years remaining) retains more buyer confidence than an older system with expired warranty — even if the actual production numbers are similar.

Practical Tips for Selling a Home With Solar

Prepare Your Documentation

• 12–24 months of production data from your inverter monitoring system
• Original installation contract showing system cost and specifications
• Manufacturer warranty documentation (product + performance)
• Annual electricity bills showing pre-solar and post-solar usage
• Any utility interconnection agreement or net metering documentation

Market the Savings Concretely

Vague claims like "solar home" or "energy efficient" are less compelling to buyers than specific numbers. Calculate and state: "This 8 kW solar system generated 9,800 kWh last year, offsetting approximately $2,200 in electricity costs at current rates." Buyers can verify this against their own estimated electricity use. According to NAR survey data, 57% of real estate agents find that promoting energy efficiency specifics is valuable in listings — concrete numbers outperform generic green claims.

Work with a Solar-Experienced Agent

Not all agents understand how to market or appraise solar. An agent familiar with solar transactions will know how to present the system to buyers, how to coach the appraiser, and how to find comparable solar sales. In mature solar markets, this expertise is increasingly common; in less-saturated markets, it may require specifically seeking out an agent with relevant experience.

Leased System? Consider a Buyout

If you have a leased system and are selling within 2–3 years, request a buyout quote from the leasing company. If the buyout cost is less than the home value premium you would gain from ownership, it may be financially rational to buy the system out before listing. Run the numbers specific to your lease terms, remaining duration, and local market premium.

The Complete ROI Picture: Savings + Home Value

When evaluating solar as an investment, most analyses focus only on electricity savings. The home value premium represents a second, entirely separate return vector.

Consider a homeowner who installs an 8 kW system for $23,600 gross ($16,520 net after 30% ITC) and sells the home 8 years later:

• 8 years of electricity savings (at $0.20/kWh, escalating 2.5%/year): ~$20,800
• Home value premium at sale (at $4/W with age depreciation): ~$24,000 for an 8-year-old system on a $500K home
• Total financial benefit: ~$44,800
• Net cost of system: $16,520
• Total return: ~$28,300 profit; 2.7× return on invested capital in 8 years

This calculation shows why solar makes financial sense even for homeowners who don't plan to stay long-term. The home value premium partially compensates for the shorter period of electricity savings, meaning the investment can pencil out favorably even in a 5–8 year ownership scenario — particularly in high-electricity-rate markets.

Use our Solar Savings Calculator to model the electricity savings component, and add the home value premium estimate based on your local electricity rate and the Berkeley Lab $4/watt benchmark to get your complete projected ROI.

Frequently Asked Questions