Solar panels are a home improvement that can add value to a house when the system is owned, paid off, in good condition and supported by records showing energy savings. A Lawrence Berkeley National Laboratory study of 22,822 home sales from 2002 to 2013 estimated an average premium of about $15,000 for homes with an average 3.6-kilowatt, homeowner-owned system. That estimate is historical evidence, not a guaranteed resale amount today.
The resale benefit depends on the system's ownership, age, condition, energy production, local electricity prices and buyer demand. A leased system or power purchase agreement, known as a PPA, may add little or no appraised value and can make the sale more complicated.
Solar Panels and Home Value at a Glance
| Factor | Likely effect on resale value |
|---|---|
| Owned and paid-off solar panels | Most likely to add value |
| Newer system with a transferable warranty | Positive |
| Documented lower electricity bills | Positive |
| Leased panels or a PPA | Usually no direct appraised value |
| Solar loan secured by the equipment | May complicate financing |
| Old panels near the end of their useful life | Limited value |
| Roof needing replacement | Can reduce the benefit |
| High electricity rates and strong solar demand | Greater potential value |
| Poorly maintained or undocumented system | Lower buyer confidence |
How Much Value Can Solar Panels Add?
There is no reliable nationwide formula that adds a fixed percentage to a home's value after solar panels are installed. Appraisers compare the property with similar homes and consider how buyers in that market respond to solar.
The Berkeley Lab study cited above found a premium for homeowner-owned systems, but its estimate came from sales between 2002 and 2013. Installation costs, electricity prices, financing terms and buyer expectations have changed since then.
A later Berkeley Lab and New York University study also associated homeowner-owned systems with higher selling prices. In the researchers' analysis, non-owned systems, including leased panels, showed no added value or slightly lower values. The study found that solar premiums changed as installation costs, energy prices and the solar market changed.
The useful takeaway is limited but clear: owned solar panels can raise a home's market value, but local comparable sales and the system's expected future savings determine the amount.
Owned Solar Panels Usually Add More Value Than Leased Panels
Ownership affects both the appraisal and the sale process.
Owned Systems
An appraiser may include an owned solar system in the home's value when it meets normal appraisal requirements. This can include a system purchased with cash, included in the home purchase price or financed in a way that does not leave the equipment as separate collateral.
Fannie Mae states that an appraiser may include the value of homeowner-owned solar panels. The appraiser must still review comparable properties and local market evidence.
Leased Systems and PPAs
With a lease or PPA, a solar company owns the panels. The homeowner either pays a monthly lease amount or pays for the electricity the system produces.
Fannie Mae requires leased or third-party-owned solar equipment to be treated as personal property rather than part of the home's appraised value. The agreement may also affect the buyer's debt-to-income ratio and mortgage approval.
A buyer may need to:
- Assume the remaining lease or PPA term
- Qualify for the monthly payment
- Obtain approval from the solar company
- Pay off or transfer the agreement
- Review a UCC filing or other equipment documents
Each requirement can reduce the number of buyers willing to purchase the property.
What Determines the Value of a Solar System?
1. The System's Age and Condition
Newer panels usually have more productive life and warranty coverage remaining. An older system may still lower electricity bills, but buyers may assign it less value if the panels, inverter or roof attachments are nearing replacement age.
Give the buyer:
- Installation date
- Panel and inverter specifications
- Warranty documents
- Maintenance records
- Recent production reports
- Utility bills showing actual savings
- Battery details, if applicable
2. The System's Energy Production
The amount of electricity a system produces matters more than the number of panels on the roof.
Production depends on:
- Roof orientation
- Shade
- System size
- Local climate
- Panel degradation
- Inverter performance
- Utility rules
- Net-metering or export-credit rates
A system with substantial, documented savings may be worth more to a buyer than a larger system with poor output or unfavorable utility compensation.
3. Local Electricity Prices
Solar savings are worth more where electricity costs are high. A buyer may place more value on a system that offsets expensive utility power than on an identical system in an area with lower rates.
Local market conditions also affect the appraisal. Fannie Mae notes that the value of energy-efficient features varies with climate, utility costs and market reaction.
4. The Roof's Condition
Solar panels do not replace the need for a sound roof. If the roof is near the end of its useful life, a buyer may expect to pay for panel removal and reinstallation before replacing the roofing materials.
Installing panels on an aging roof can reduce the financial benefit at resale. If you plan to sell soon, replacing the roof first may be more practical than installing solar on a roof that will soon need major work.
5. The Battery and Other Equipment
A battery can store electricity for evening use or outages. Its resale contribution depends on its age, capacity, warranty, replacement cost and local electricity rates.
List the battery separately in the property information so buyers and appraisers know what the sale includes.
Do Solar Panels Pay for Themselves Through Added Home Value?
Not necessarily. Solar panels can benefit the owner in two separate ways:
- Lower electricity bills while the owner lives in the home
- A possible resale premium when the owner sells
The resale premium may recover part of the system's cost, but buyers do not always pay dollar for dollar for improvements. Appraisers cannot add the installation cost or projected energy savings to a home's value without supporting market evidence. Fannie Mae requires the appraiser to consider comparable sales and the local market.
The financial case is usually stronger when the homeowner:
- Owns the system
- Keeps the home long enough to receive meaningful bill savings
- Installs the system on a sound roof
- Lives in an area with high electricity costs
- Keeps production and maintenance records
- Avoids an expensive lease or PPA obligation
Important U.S. Tax Credit Update for 2026
The federal Residential Clean Energy Credit is not available for qualifying property placed in service after December 31, 2025, according to the Internal Revenue Service. As of September 25, 2026, homeowners should not assume that a new residential solar installation qualifies for the former 30% federal credit.
State, utility and local incentives may still exist, but they vary by location.
Because incentives affect the net cost of solar, the end of the federal residential credit may also affect installation economics and the resale premium buyers recognize.
How to Protect the Value of Solar Panels When Selling
Before listing the property:
- Confirm whether the system is owned, financed, leased or subject to a PPA.
- Obtain the original contract and payment records.
- Gather warranties, permits and utility interconnection documents.
- Provide recent production data and electricity bills.
- Confirm which panels, batteries and other equipment are included in the sale.
- Ask the lender how the solar financing affects the buyer's mortgage.
- Use an agent and appraiser familiar with solar homes.
- Resolve roof, inverter and maintenance problems before marketing the property.
Bottom Line
Treat solar as two investments: an energy investment that can reduce bills and a property feature that may affect resale value. If resale value is the main reason you are considering solar, review local comparable sales and the system's ownership terms before signing a contract.