Do Solar Panels Actually Raise Home Resale Value?

The most cited number in solar marketing is from a Lawrence Berkeley National Laboratory study published in 2015. It found that buyers paid, on average, about $4 more per watt of installed solar capacity. For a 6 kilowatt system that translates to roughly a $24,000 premium at sale. The study has held up well to follow-up research, including a 2019 Zillow analysis that put the premium at around 4.1% of home value.

Those numbers come with two large asterisks. First, they apply only to homeowner-owned systems. Leased systems and PPAs show no measurable premium and sometimes show a discount, because the buyer has to either qualify to take over the contract or pay it out. Second, the premium varies enormously by market. In California, Massachusetts, and the New York metro, buyers actively shop for solar homes. In parts of the Midwest and Mountain West, appraisers still struggle to find comparable sales to support any premium at all.

The mechanism that delivers the value at closing is the appraisal. An appraiser does not assign value because solar is virtuous. They assign value because they can find recent sales of comparable homes with and without solar that demonstrate a price difference. If your neighborhood has no other solar homes, the appraiser may default to giving you nothing.

There is a more rigorous method called PV Value, developed by Sandia National Labs, that some appraisers use. It calculates the present value of the system's expected lifetime production, discounted at a reasonable rate. If your appraiser has the Appraisal Institute's Residential Green and Energy Efficient Addendum, ask them to use it. If they have never heard of it, that is a sign you should request an appraiser with green-building credentials.

Real estate agents are a separate problem. Most agents do not know how to market a solar home and will undervalue the system in listing materials. Provide your agent with a one-page summary that includes the system size, age, warranty status, monthly bill savings averaged over the last two years, and any active SREC contracts. Make their job easy.

For buyers, the calculation goes the other way. A paid-off solar system on a house worth $500,000 typically adds about $20,000 to the price. The buyer takes a slightly larger mortgage and inherits zero electricity bills. The mortgage cost on $20,000 at 7% is about $133 a month. If the system was saving the previous owner $200 a month on electricity, the buyer comes out ahead from day one.

Two situations destroy resale value. A poorly installed system with visible leaks or sloppy conduit work signals deferred maintenance to every buyer who tours the home. And a system installed on a roof that is within ten years of needing replacement creates a difficult conversation, because removing and reinstalling the array for a re-roof typically costs $1,500 to $4,000. If your roof is old, fix it before you go solar, not after.