Do Solar Panels Increase Home Value?

Short answer: a solar system you own usually adds to what a buyer will pay, while a leased system often adds nothing and can slow the sale down. The size of the bump depends on your local market, your electric rates, and whether the buyer sees the panels as an asset or a complication. Here’s what the data actually says, and where the caveats are.

What the research shows

Two findings get cited the most. Treat both as directional, not a promise for your specific house:

Zillow reported a national average sale premium of roughly 4.1% for homes with solar in its 2024 analysis. On a $400,000 home that’s about $16,000. Zillow also found wide regional spread, with higher premiums in states where electricity is expensive.
Lawrence Berkeley National Laboratory (“Selling Into the Sun,” published 2015) found buyers paid roughly $4 per watt more for homes with host-owned solar across a large multi-state dataset. For a typical system that worked out to around $15,000 in added value at the time.

The Berkeley Lab number is now a decade old, and panel prices have changed a lot since (see how much solar costs). The useful takeaway isn’t the exact dollar figure. It’s the consistent direction: owned solar tends to raise the sale price, and the premium tracks how much money the system saves a future owner on power bills.

Why owned and leased are completely different

This is the single biggest factor, so it’s worth being blunt about it.

Owned (cash or financed-and-paid-off). The panels are part of the house, like a renovated kitchen. They transfer with the sale and the value studies above apply.

Leased or on a PPA. You don’t own the equipment, so it isn’t your asset to sell. The buyer has to qualify for and assume the remaining lease, or you have to buy out the contract before closing. Some buyers walk rather than take on a 20-year agreement they didn’t choose. This doesn’t mean leasing is wrong for everyone, but it changes the resale picture. If resale value matters to you, read lease vs buy vs PPA before you sign.

What moves the premium up or down

Local electricity prices. Solar is worth more to a buyer in a high-rate market because it offsets a bigger bill. This is the same logic behind how much you actually save with solar.
System age and warranty. A newer system with transferable warranties and clean monitoring data is an easier sell than a 15-year-old array near the end of its life.
Documentation. Keep your install paperwork, warranty transfers, monitoring login, and a year of production data. Appraisers and buyers both ask for it.
Roof condition. Panels on an aging roof can read as a future cost to a buyer, since the roof may need work the panels sit on top of.
Whether the loan is paid off. A financed system with a lien still on it has to be settled at closing, which eats into the premium.

How appraisers handle solar

A lender’s appraisal needs comparable sales to support any added value, and in markets with few solar homes that’s hard to find. Many appraisers use the PV Value tool (developed with Sandia National Laboratories and used by the Appraisal Institute) to estimate the income value of the system’s production. The practical lesson: if you’re refinancing or selling, ask whether your appraiser has experience valuing solar, and give them your production records up front. An appraiser with no comps and no data may assign the panels little or no value.

Property taxes are a separate question

Many states offer a property tax exemption for the added value from solar, so your assessment doesn’t rise even though your home is worth more. Rules vary by state and some exemptions have expiration dates, so confirm the current rule with your state energy office or county assessor rather than assuming. This is one of the few cases where adding value to your home doesn’t raise your tax bill, but only where the exemption is in force.

The honest bottom line

If you own your system, it generally helps your home’s value and homes with solar have tended to sell somewhat faster. The premium is real but not guaranteed, and it leans heavily on your local market and electric rates. If you lease, plan for the sale to be more complicated, not more valuable. And if you’re buying solar partly as a resale play, run the payback math first. The bill savings, not the resale bump, are still the main reason solar pencils out for most homeowners.

Sources: Zillow solar premium analysis (2024); Lawrence Berkeley National Laboratory, “Selling Into the Sun” (2015). State property tax exemption rules vary, confirm yours locally.