Here’s what you need to know how solar panels affect the value of your home
From lower electricity bills to reduced environmental impact, solar panels offer a wide variety of benefits. These benefits can include increasing the value of your house when it’s time to sell. According to Zillow, solar energy systems increase home value by about 4%.
In this article, we’ll discuss the factors that affect the value of your solar home, including geographic location, buyback programs, solar incentives, and more.
In this article:
- Do solar panels actually increase home value?
- Solar panel factors that impact a home’s value
- The cost of installing home solar and whether it’s worth it
- Is solar a smart investment for your home?
- Frequently asked questions
Do solar panels actually increase home value?
While most of the data on the topic is on the older side, generally speaking, installing solar panels should increase your home’s resale value. However, how much value they add depends on a variety of factors, including:
- The size and age of the solar energy system
- Historic trends
- The current housing market
What do the studies say about solar and home resale prices?
There are a few studies that measure how solar panels affect home resale value. Here’s an overview of some of the top research:
- A Lawrence Berkeley National Laboratory study from 2015 found that buyers were willing to pay $15,000 more for homes with average-sized solar energy systems.
- In 2019, Zillow published a report that said homes with solar sold for an average of 4.1% more, or a median value of $9,274.
- Aurora Solar’s 2025 Snapshot found that 78% of homeowners believe solar panels are a good investment, up 51% from 2024.
How does value vary by state?
The resale value of solar homes can vary greatly by location.
In some markets, selling a home with a solar energy system can really pay off, thanks to higher energy costs and greater solar incentives. Here are the top 10 states where solar energy systems will increase home value, according to Zillow’s research:
- New Jersey
- Pennsylvania
- North Carolina
- Louisiana
- Washington
- Florida
- Hawaii
- Maryland
- New York
- South Carolina
As you can see, the states are spread throughout the U.S., with New Jersey leading the list at almost a 10% jump in home value — or more than $32,000 — for homes with solar panels. In second place, Pennsylvania sees about half of that, with an increase of $8,589 for a median-valued home.
Even within states, solar incentives and policies can vary, which can impact the rise in home value.
Solar panel factors that impact a home’s value
Your home’s location and the condition of your solar energy system may affect whether your home value increases, and by how much. Factors including the size, age, and efficiency of your solar equipment will determine how much more a homebuyer is willing to pay.
Additionally, local considerations — electricity rates, climate, solar incentives, and solar buyback programs — may motivate potential buyers. Finally, whether you own or lease your solar panels will greatly impact the home-buying process.
Size of the system
A larger solar energy system will typically increase home value more due to the potential for greater electric bill savings for the buyer. Additionally, homes with solar storage offer even greater benefits, allowing homeowners to store solar energy for later use or during grid blackouts. 64% of homeowners find solar more valuable when paired with home electrification, according to Aurora’s research.
Age and efficiency of the system
Newer solar energy systems are likely a greater incentive for homebuyers. However, solar panels can perform at high efficiency for a long time. Solar performance warranties stipulate efficiency and degradation rates, often up to 25 years. The expected lifespan of other solar equipment, like inverters and batteries, may impact home resale value.
Local electricity rates
According to MarketWatch, residents in areas with higher utility rates can save more by going solar, which may encourage buyers to consider homes with solar. Additionally, in areas with solar energy buyback programs, homeowners may earn extra cash by selling back excess energy, in addition to saving on their monthly utility bills.
Home location
Local policies, your home’s specific location, and the area’s demand for sustainable homes can influence buyer appeal. For example, areas with robust solar incentives and net metering programs offer greater savings for potential homebuyers. Homes with optimal sunlight exposure can produce more energy than shaded homes or those in cloudy climates.
Owned vs. leased panels
While homeowner-owned solar panels can increase home value, leased panels offer fewer incentives and may complicate the sale. With solar leases and power purchase agreements (PPA), a third-party owns the system, so transferring the contract to a new homeowner can be more complicated.
Lease and PPA contracts tend to be long-term and may include escalating payments. It’s important to clarify whether the solar panels are owned or leased when buying or selling a home.
The cost of installing home solar and whether it’s worth it
Of course, adding value to your home at the time of sale is only one of the economic benefits of solar. Going solar can be a significant investment, but it offers the potential for long-term savings and environmental benefits. To understand the full ROI, you need to consider a number of factors.
According to Forbes, for an average-sized 6.5kW solar system, you can expect to pay anywhere from $16,600 to $20,500 in 2025. Keep in mind that there are ways to mitigate the upfront cost, such as applying for a solar loan, which still allows you to own the panels.
Since solar panels can increase the value of your home, you may be able to recoup some of those costs when you resell it. In the meantime, you can benefit from substantial energy savings.
Solar savings
Despite high upfront costs, solar panels provide both short- and long-term savings. According to MarketWatch, households with solar energy systems can save an average of about $1,530 per year on electricity. Many solar panel warranties often last up to 25 years, and that can add up to tens of thousands of dollars in savings.
Solar incentives
The 30% federal tax credit through the Residential Clean Energy Credit is set to expire at the end of 2025. Depending on where you live, you may also be able to benefit from state and local government incentives, such as discounts, rebates, and tax credits.
Solar buyback programs
In addition to saving on your monthly energy bill, some solar systems generate extra energy that can be sold back to the grid. Buyback programs — like net metering and feed-in tariffs — allow solar panel owners to earn utility credits or receive fixed-rate payments.
Is solar a smart investment for your home?
Whether you’re planning to sell in the future or looking to buy, going solar offers many benefits — from monthly utility savings to increasing home value. While resale value depends on several important factors (home location, solar system age, etc.), solar panels generally boost home value when it’s time to sell.
Learn more about going solar with our 2025 Homeowner Guide to Solar, which covers everything from common concerns to incentives and financing options.
Frequently asked questions
How much do solar panels increase home value?
Solar panels can increase home value by about 4%, depending on home location and system condition. (This is assuming that the solar panels are owned outright and not leased, which can make home resale more complicated.) Researching home value data specific to your region or state, and talking to a realtor, can give you a more accurate idea of what to expect for your own home resale.
Is it harder to sell a house with solar panels?
Generally, no. Solar panels typically increase home value as long as you own the system. The amount your home’s value increases, and the time it takes to sell the home, may depend on buyer awareness of solar energy in the area and the current housing market. However, solar panel leases and PPAs can make it more complicated to sell a home.
Do solar panels really save you money?
Yes. One of the major benefits of installing solar panels is the ability to save money on energy. Having a solar energy system will lower your utility bill, and it can also lead to greater savings if you participate in buyback programs, such as feed-in tariffs or net metering.
Do solar panels raise home insurance or property tax?
Solar panels will only increase your home insurance if you choose to extend your coverage, which some property owners do to supplement their solar warranties. Also, in some areas you may be required to adjust your coverage to include the solar system. Installing solar panels can increase property taxes, but many states offer solar incentives to offset tax increases and encourage residents to go solar.
Are there regional differences in how solar panels influence home value?
Yes. Resale value for homes with solar can vary widely by region, often depending on the energy costs and solar incentives in that area. Home value also differs by state, with New Jersey, Pennsylvania, North Carolina, Louisiana, and Washington topping the list of the highest solar home resale values.
