# Do Solar Panels Increase Home Value? Costs, ROI & What Buyers Really Think By Opendoor Editorial Team | 2026-03-16 [Get your offer](#) ## Do Solar Panels Increase Home Value? The Short Answer Yes — if you're wondering whether solar panels increase home value, the research is clear: **owned solar panel systems add measurable value to most homes in most markets.** Nationally, homes with solar sell for roughly [3–4% more than comparable homes without solar](https://us.qcells.com/blog/do-solar-panels-increase-home-values/), according to Zillow research. A separate study by Lawrence Berkeley National Laboratory found that solar adds an [average of $15,000 to a home's sale price](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/) across the country. That said, the actual premium your home commands depends on several [factors that influence home value](https://www.opendoor.com/articles/factors-that-influence-home-value) — including whether you own the panels or lease them, your state's electricity rates and solar incentives, the age and size of your system, and local buyer demand for solar-equipped homes. > **Quick math:** On a $400,000 home, solar panels add roughly **$12,000–$16,400** in value on average nationally — and potentially much more in high-cost markets like California, where recent research shows premiums of 5–10%. But averages only tell part of the story. Here's what the latest research says about how much value solar actually adds — and the factors that determine your specific ROI. ## How Much Do Solar Panels Increase Home Value? What the Research Shows ### National Data — Zillow and Lawrence Berkeley Lab Findings The two most widely cited studies on solar and home value paint a consistently positive picture. **Zillow's 2019 analysis** examined millions of home sales nationwide and found that [homes with solar energy systems sold for 4.1% more on average](https://us.qcells.com/blog/do-solar-panels-increase-home-values/) than comparable homes without solar. On a $400,000 home, that translates to approximately $16,400 in added value — a significant return on what is typically a $15,000–$30,000 investment after incentives. **Lawrence Berkeley National Laboratory's study**, which analyzed [22,000 home sales across eight states](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/), found that each watt of installed solar capacity added roughly $4 in home value in California and about $3 per watt in other states. For an average 5-kilowatt residential system, that's $20,000 in California and $15,000 nationally. Beyond the price premium, there's another compelling data point: [homes with solar sell approximately 20% faster](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) than comparable non-solar homes. For sellers worried about [days on market](https://www.opendoor.com/articles/why-days-on-market-matter), that's a meaningful advantage. It's important to note that these are averages. Your actual premium will vary based on system specifics and local conditions, which we'll break down below. ### California and High-Value Markets — The Latest Data More recent data suggests that solar's home value impact may be even larger than previously understood — especially in high-cost markets. A [study analyzing over 5,000 California home sales between 2020 and 2023](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) found that homes with owned solar panels sold for **5–10% more** than comparable homes without solar. On the average $790,000 California home, that premium translates to a striking **$39,500–$79,000** in added value — more than double what earlier studies estimated. The study, conducted by SolarInsure, compared 2,350 homes with owned solar systems against 860 comparable homes without solar and 1,790 homes with third-party-owned solar. The findings reflect what many industry observers have suspected: as electricity costs have surged and buyer awareness has grown, [solar's value as a home improvement](https://www.opendoor.com/articles/best-home-improvements-to-increase-value-where-to-spend-for-maximum-roi-in-2026) has increased substantially. Other high-premium markets include [New Jersey, Florida, and Massachusetts](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) — all states where electricity rates are above the national average and/or strong solar incentives exist. ### Solar Panels Home Value by Percentage — A Quick Breakdown Here's how solar premiums break down by market based on available research: | **Market** | **Avg. Premium** | **On a $400K Home** | **On a $790K Home** | | National average | 3–4% | $12,000–$16,400 | $23,700–$31,600 | | California | 5–10% | $20,000–$40,000 | $39,500–$79,000 | | High-electricity states (NJ, FL, MA) | 4–6% | $16,000–$24,000 | $31,600–$47,400 | **Important caveat:** These percentages are estimates based on the best available research from [Zillow](https://us.qcells.com/blog/do-solar-panels-increase-home-values/), [Lawrence Berkeley National Laboratory](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/), and [SolarInsure/EnergySage](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/). Individual results will vary based on system size, age, ownership type, and local conditions. To understand how these factors affect your specific home's value, consider getting a [professional home appraisal](https://www.opendoor.com/articles/home-appraisal-guide-what-it-is-how-long-it-takes-what-to-expect). ## What Determines How Much Value Solar Adds to Your Home? Not all solar installations are created equal in the eyes of buyers and appraisers. Here are the key variables that determine how much your specific system adds to your property's value. ### Owned vs. Leased Solar Panels This is the single most important factor — and it's where many homeowners get surprised. **Owned systems (purchased with cash or a solar loan)** consistently add value. When a buyer purchases your home, they get a fully owned energy asset with no ongoing lease payments or obligations. The panels are part of the property, just like a new roof or renovated kitchen. Appraisers can assign clear value to owned systems based on comparable sales data. **Leased systems** tell a very different story. Because the homeowner doesn't own the equipment, [the buyer must agree to assume the lease](https://us.qcells.com/blog/do-solar-panels-increase-home-values/) — which means qualifying with the leasing company and taking on monthly payments that may span 10–20 more years. Some appraisers don't assign any value to leased panels because the homeowner has no equity in them. In some cases, leased panels can actually slow down or complicate a sale. **PACE-financed systems** (Property Assessed Clean Energy) generally fall somewhere in the middle. The system is technically owned, but the PACE lien transfers with the property, which some buyers and lenders view negatively. PACE obligations are repaid through property taxes, and not all mortgage lenders are comfortable with this arrangement. **Key takeaway:** If maximizing resale value is a priority, owning your system outright puts you in the strongest position. ### System Size, Age, and Condition **System size** matters because larger systems that offset a greater percentage of the home's electricity usage command higher premiums. A system that covers 80–100% of a home's energy needs is more attractive to buyers than one covering 30–40%. **System age** directly affects value. Most solar panels come with [25-year performance warranties](https://us.qcells.com/blog/do-solar-panels-increase-home-values/), and a system with 20 years of warranty life remaining is worth considerably more than one with only 5 years left. Panels typically degrade at about 0.5% per year, so a 10-year-old system still produces roughly 95% of its original output — but buyers (and appraisers) will factor in remaining useful life. **Documentation is critical.** A well-maintained system with organized records — original purchase price, warranty information, energy production history, and maintenance records — is more attractive to both buyers and [appraisers assessing your home's value](https://www.opendoor.com/articles/items-that-increase-your-home-appraisal-value-what-appraisers-actually-look-for). ### Local Electricity Rates and Net Metering Policies This is straightforward: **the more expensive electricity is in your area, the more valuable your solar panels become.** In states where homeowners pay $0.25–$0.40+ per kilowatt-hour (California, Connecticut, Massachusetts, New York), the savings from solar are substantial — and buyers are willing to pay a premium for those savings. [Net metering policies](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/) also play a role. In states where utilities credit you at the full retail rate for excess energy sent to the grid, solar panels generate more financial value. States that have reduced net metering benefits (like California's shift to NEM 3.0) may see smaller premiums on newer installations, though existing systems grandfathered into older rate structures could actually become more valuable over time. ### Your Local Real Estate Market Markets where solar is common — like Arizona, California, and parts of Colorado — have more buyer awareness and more comfort among [appraisers assigning value to solar systems](https://www.opendoor.com/articles/home-appraisal-tips-and-what-is-home-appraisal-based-on). There are more comparable sales data points, which makes it easier to justify a premium. In markets where solar adoption is still relatively low, appraisers may struggle to find comparable sales with solar panels. This can lead to the system being undervalued or not valued at all in a formal appraisal — even if a willing buyer would pay more for it. Buyer demographics also matter. Younger, eco-conscious buyers and those focused on long-term energy costs tend to place higher value on solar. If your local market skews toward these demographics, your premium will likely be on the higher end. ## Does Solar Add Value to a Home in Every State? Solar panels add value in **most** states, but the magnitude varies significantly. The premium is highest in states where three conditions align: **high electricity costs, strong solar incentives, and favorable net metering policies.** California leads the way, followed by northeastern states like New Jersey, Massachusetts, New York, and Connecticut. Florida and Hawaii also show strong premiums due to abundant sunshine combined with rising energy costs. One powerful advantage applies in the majority of states: **solar property tax exemptions.** Most states have enacted laws ensuring that solar panels are [exempt from property tax increases](https://us.qcells.com/blog/do-solar-panels-increase-home-values/). This means you get the home value boost without a corresponding increase in your annual property tax bill — a significant financial benefit. > **Check your state's solar property tax exemption status.** In most states, solar panels are exempt from property tax increases, meaning you get the value boost without the tax hit. Notable exemption states include California, New York, New Jersey, Texas, Florida, Arizona, Massachusetts, and Colorado. In states with low electricity costs and minimal solar incentives — parts of the Midwest and certain Southern states — the premium is smaller but [still typically positive for owned systems](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). You may not see a 5–10% bump, but a 2–3% increase is still a meaningful return. It's also worth noting that California data is by far the most robust due to the state's high solar adoption rates. State-specific data elsewhere is more limited, but the directional trend is consistent: owned solar panels add value. ## Do Solar Panels Make a House Harder to Sell? This is one of the most common concerns homeowners raise — and the answer depends almost entirely on whether you own or lease your system. **For owned systems: No.** The data actually shows the opposite. Research indicates that [solar homes sell approximately 20% faster](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) than comparable non-solar homes. Buyers see lower utility bills as a tangible, immediate financial benefit, and in markets where solar is common, it's increasingly expected. **For leased systems: It can be more complicated.** Lease transfer requirements add a layer of complexity to the transaction. Some buyers walk away rather than assume a lease with 10–15+ years remaining, especially if the monthly payments are significant or include annual escalation clauses. Some mortgage lenders also have specific requirements around leased solar panels that can create friction during [the closing process](https://www.opendoor.com/articles/how-long-does-closing-take). Here's how to address the most common buyer objections: - **"What if the panels need repair?"** — Most solar panels carry [25-year performance warranties](https://us.qcells.com/blog/do-solar-panels-increase-home-values/), and inverters are typically warrantied for 10–25 years. Routine maintenance costs are minimal. - **"Will they damage my roof?"** — Reputable installers warranty their roof penetrations, and panels can actually protect the roofing material underneath from UV exposure and weather. If you're also considering a [new roof before selling](https://www.opendoor.com/articles/does-a-new-roof-increase-home-value), discuss coordination with your solar installer. - **"What if I don't want them?"** — Panel removal is possible but costly ($5,000–$10,000 or more), and you'll lose the value premium entirely. Most buyers who initially hesitate come around once they understand the energy savings. **Practical tip for sellers:** Before listing your home, compile a complete solar documentation package — original purchase price, warranty information, energy production history, annual savings data, and any maintenance records. This removes friction from the sale and gives buyers (and their lender's appraiser) confidence. Review additional [tips on how to sell your house for the most money](https://www.opendoor.com/articles/how-to-sell-your-house-for-the-most-money) to make sure you're capturing the full value. ## Do Leased Solar Panels Affect Home Value? Because leased solar panels represent a distinctly different scenario from owned panels — and one that trips up many sellers — this topic deserves focused attention. **The reality:** Leased solar panels generally **do not add appraised value** to a home. Because the homeowner doesn't own the equipment, [appraisers typically don't assign any value to the system](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). The lease is viewed as a liability the buyer must assume, not an asset that enhances the property. **Impact on the sale process:** When you sell a home with a leased solar system, the buyer must qualify with the leasing company and agree to take over the remaining lease payments. Some leases include escalation clauses where payments increase 1–3% annually, which can be a red flag for budget-conscious buyers. If the buyer refuses the lease, you as the seller may need to: - **Buy out the lease** — often $10,000–$25,000 or more depending on remaining terms - **Negotiate a price reduction** to compensate the buyer for assuming the obligation - **Have the panels removed** — which costs $5,000–$10,000+ and may leave roof repairs needed **For homeowners with leased panels considering selling:** Start by getting a current copy of your lease terms and requesting your exact buyout amount from the leasing company. In many cases, buying out the lease before listing and transferring fully owned panels to the buyer is the cleanest path to maximizing your sale price. If a lease buyout isn't feasible, be transparent about the terms early in the selling process to avoid surprises during [closing](https://www.opendoor.com/articles/house-closing-process-for-seller). It's worth noting that some home-buying companies, including Opendoor, do purchase homes with leased solar panels, though specific requirements may apply. ## Solar Panel ROI — Is It Worth Getting Solar Panels for Your Home? When evaluating solar as an investment, you need to look at two types of return: the **ongoing energy savings** and the **home value premium at resale.** Together, they paint a compelling financial picture for most homeowners. **The costs:** The average residential solar panel system costs approximately [$29,649 before incentives](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/). After the federal solar Investment Tax Credit (currently 30% through 2032) and any applicable state incentives, the net cost for most homeowners falls in the $15,000–$22,000 range. **The energy savings:** Most solar homeowners save $1,000–$2,500+ per year on electricity, depending on system size, local electricity rates, and energy consumption. Over 25 years, that's $25,000–$62,500 in cumulative savings — and likely more, given that electricity rates tend to increase over time. **The resale value:** As we've covered, solar adds [$12,000–$16,400 on a $400,000 home nationally](https://us.qcells.com/blog/do-solar-panels-increase-home-values/) and potentially [$39,500–$79,000 in California](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/). In many cases, the home value increase alone can recover a significant portion — or all — of the installation cost. **Putting it together:** If you pay $18,000 net for a solar installation, receive a $12,000–$16,000 boost in home value, and save $1,500 per year on energy costs, you've effectively [made an improvement](https://www.opendoor.com/articles/home-improvements-that-actually-increase-property-value) that pays for itself within a few years and continues generating returns for decades. Few other home improvements offer that kind of ROI — compare that to features like [pools](https://www.opendoor.com/articles/does-a-pool-add-value-to-your-home-what-the-data-actually-shows), which typically recover only 40–60% of their cost at resale. **The bottom line:** For homeowners who plan to stay in their home for at least 5–7 years, own the system outright, and live in an area with moderate-to-high electricity rates, solar panels are one of the strongest financial investments you can make in your property. ## Top Questions People Ask About Solar Panels and Home Value ### Do solar panels increase home value? Yes. Multiple independent studies confirm that owned solar panels increase home value. Nationally, homes with solar sell for [3–4% more than comparable homes](https://us.qcells.com/blog/do-solar-panels-increase-home-values/) without solar, according to Zillow research. The Lawrence Berkeley National Laboratory found a [national average premium of approximately $15,000](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). More recent California-specific data shows premiums of [5–10%, or $39,500–$79,000 on the median California home](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/). The key qualifier is that these premiums apply to **owned** systems; leased panels generally do not add appraised value. ### How much do solar panels increase home value? On a national average, solar panels add approximately **$15,000** to a home's value, or roughly [$4 per watt of installed capacity](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). In percentage terms, Zillow found a [4.1% average premium](https://us.qcells.com/blog/do-solar-panels-increase-home-values/). However, this varies widely by location. In California, recent research shows premiums of [5–10%](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/), while high-electricity states in the Northeast typically see 4–6%. States with lower electricity costs may see smaller but still positive premiums. ### How much value do solar panels add in California? California has the most robust data on solar home value premiums. A [study of 5,000+ California home sales (2020–2023)](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) found that homes with owned solar sold for 5–10% more than comparable non-solar homes. On the average California home valued at $790,000, that premium translates to $39,500–$79,000 — significantly higher than previous national estimates. This larger premium reflects California's high electricity rates, strong solar adoption, and growing buyer demand for energy-efficient homes. ### What is the downside of solar panels on a house? The most frequently cited downsides include upfront installation costs ($15,000–$22,000 after incentives), aesthetic concerns for some buyers, and the complexity of selling a home with a **leased** system. Leased panels can complicate or slow a sale because the buyer must qualify to [assume the lease](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). If you need to remove panels (due to roof work or buyer preference), costs can run $5,000–$10,000+. Additionally, in markets where solar is uncommon, appraisers may undervalue the system due to limited comparable sales data. That said, for owned systems in most markets, [the financial benefits substantially outweigh the drawbacks](https://www.opendoor.com/articles/should-you-make-home-improvements-before-listing). ### Do solar panels make a house harder to sell? For **owned systems**, no — the opposite is true. Research shows solar homes [sell approximately 20% faster](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) than comparable homes without solar. Buyers view lower utility bills as a tangible financial benefit. For **leased systems**, solar can make selling more difficult. The buyer must agree to assume the lease, and not all buyers or lenders are comfortable with that obligation. Sellers with leased panels may need to buy out the lease or negotiate pricing to close the deal. ### Do leased solar panels affect home value? Leased solar panels generally **do not add appraised value** to a home because the homeowner doesn't own the asset. Appraisers view the lease as a financial obligation, not a property improvement. Beyond not adding value, a lease can [negatively impact the sale process](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/) by adding complexity and limiting the buyer pool. Sellers with leased panels should request their buyout amount and consider purchasing the system outright before listing. Sellers with leased panels benefit from being transparent early in the process to avoid complications at closing. ### Does solar add value to a home in all states? Solar adds value in most states, but the premium varies. It's highest in states with expensive electricity and strong incentives — California, New Jersey, Massachusetts, New York, Florida, and Hawaii lead the way. In states with low electricity costs, the premium is smaller but [still typically positive for owned systems](https://us.qcells.com/blog/do-solar-panels-increase-home-values/). A major advantage in most states: solar property tax exemptions ensure the added value doesn't increase your property tax bill. ### Are solar panels worth it if I plan to sell my house soon? It depends on your timeline. If you're [planning to sell within 1–2 years](https://www.opendoor.com/articles/how-to-sell-your-house), solar likely isn't worth installing primarily for resale value because you won't recoup enough in energy savings to offset the cost gap between installation price and home value premium. However, if you plan to stay 5–7+ years, the combination of ongoing energy savings and the resale premium makes solar one of the highest-ROI home improvements available. If you're selling a home that already has solar, make sure to [highlight the system's value](https://www.opendoor.com/articles/how-to-sell-your-house-for-the-most-money) with documentation and energy savings data. ### How do appraisers value solar panels on a home? Appraisers typically use one of three methods: **the income approach** (calculating the present value of future energy savings), **the comparable sales approach** (comparing your home to similar solar-equipped homes that have recently sold), or **the cost approach** (valuing the system based on its depreciated replacement cost). The [comparable sales approach is most common](https://www.opendoor.com/articles/home-appraisal-tips-and-what-is-home-appraisal-based-on), but in markets with few solar home sales, appraisers may default to the cost approach — which can undervalue the system. Having complete documentation and energy production data can help appraisers make a more accurate assessment. [Get your offer](#) ## Frequently Asked Questions ### Do solar panels increase home value? Yes. Owned solar panels increase home value by [3–4% nationally](https://us.qcells.com/blog/do-solar-panels-increase-home-values/) and up to [5–10% in high-demand markets like California](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/). ### How much do solar panels add to home value? On a national average, solar panels add approximately [$15,000 to a home's sale price](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/), or about $4 per watt of installed capacity. ### Do homes with solar panels sell faster? Yes. Research shows homes with solar panels [sell about 20% faster](https://www.energysage.com/news/solar-power-as-a-home-improvement-strategy/) than comparable homes without solar. ### Do leased solar panels add value to a home? No. Leased panels generally do not add appraised value because the homeowner doesn't own the equipment, and the lease represents an [obligation the buyer must assume](https://aurorasolar.com/blog/does-solar-increase-home-value-the-latest-data-for-solar-clients/). ### How much do solar panels increase home value in California? In California, solar panels can increase home value by \[5–10%, or $39,500–$79,000\](https://www.energysage.com/news/ --- *Originally published at [https://www.opendoor.com/articles/do-solar-panels-increase-home-value-costs-roi-what-buyers-really-think](https://www.opendoor.com/articles/do-solar-panels-increase-home-value-costs-roi-what-buyers-really-think)*