4 min read



Do solar panels increase home value? YES! Find out how much and based on what factors it depends on today's blog posts.


Solar power is one of the most popular sources of energy and has numerous benefits, including a positive return on investment. But when it comes to how much solar panels increase home value, there’s no easy answer.

This is in part because there are two ways of evaluating solar panels’ worth. The first is how banks value a solar-generating asset. The second is how consumers or home buyers value a solar-generating asset. In other words, it’s worth whatever someone else is willing to pay for it!

Nevertheless, several studies prove that homes fitted with solar panel systems are valued and sold at higher prices than similar homes without solar in the same area. On average, the value of a home increases 3 to 4% with the addition of solar panels.
During March 2018 and February 2019, the company Zillow compared houses and their sale prices and found that homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power.

Keep reading to learn about factors that affect resale values for solar power-equipped homes.  

Factors That Influence How Much Solar Panels Increase Home Value

So, does installing solar panels add value to your home? It depends on several factors, such as:

  • Your state and city
  • The cost of electricity in your area
  • The size of the installation and your home
  • The type, age, and warranty of your solar panels
  • How much energy the system can save

[Related: Guide to Solar Panels]


The location of a home plays an important role in determining how much solar panels will increase its value. 

For example, installations in active solar markets such as California and New Jersey typically yield higher returns than comparable installations in less developed markets. This is because buyers, realtors, appraisers, and lenders are more familiar with the benefits of solar at the outset of the process.

Size of the Installation

The number of solar panels your roof can accommodate positively correlates with your home’s post-installation property value. The production capacity of your solar panels needs to be proportional to the size of your house. 

So how do solar panels affect property values? A Berkeley Lab study estimates that the resale value of your home will increase by about $5,911 for each kilowatt (kW) of solar.

Average Energy Usage and Savings

One of the easiest ways to calculate home value increase based on energy consumption is to run your own cost/benefit analysis. Your system’s value will also differ based on your area’s electricity costs. 

This treats solar like an income-producing rental property. As rents go up — or, in this case, as energy prices go up — the value of the asset goes up!

The best place to start is to look at your energy bill. Figure out the cost of your needed system size based on the kilowatt-hours used. The average system installation is about three to four dollars per watt.

You can estimate how many panels you’d need to fully power your home once you have your daily or monthly energy usage. Once you have your panel estimate, compare it to the average resale value in your area. The energy savings should be conveyed as an annuity similar to that of a rental property that represents a real value.

Quality of Solar Panels

The panels themselves are another factor that affect your home’s resale value. Manufactures of solar panels, inverters, racking, and other equipment offer varying technology features, lifespan, and warranties

Solar should be a differentiated feature of the home and not just a blip in the home’s description. The monitoring software should be displayed to prospective buyers and the benefits conveyed to prospective homeowners

Make sure to do your research on the best solar technology products so you can make the most of your long-term investment.

[Related: Solar Panel Maintenance & Repair Services]

Why Is Solar Energy So Valuable?

A 2015 survey showed that 61% of respondents agreed that solar electrical or water heating systems were desirable in a home they’d consider purchasing. 

As solar gains popularity, so will realtors who understand how to position solar as the one feature that sells the home. In a buyer’s market, it may be the one thing that sells your home over the one up the street.

Additionally, installing solar panels is a relatively easy one-time project. It has little impact on your living space compared to other major sustainable living home improvements. Most of your effort is doing the research to find the right company and getting paperwork through for installation and warranty purposes.

Additional Benefits of Solar-Powered Homes

Helps Preserve the Environment

Choosing to run your home with renewable energy helps protect the planet and reduces your carbon footprint. Using the sun’s power to produce electricity reduces the need for harmful fossil fuels. Fossil fuels emit greenhouse gases and impact local air quality.

According to The Value and Cost of Solar Electricity, by the National Renewable Energy Laboratory (NREL) the concerns about the environment, national security, and health have greatly increased interest in solar energy among home buyers. Also, 8 out of 10 Americans want builders to offer solar power as a new option for their homes.

Saves You Money on Your Utility Bills

When you are considering going solar, it’s important to think about the potential benefits in regards to your electricity bill.

Running on solar is essentially free electricity for the panels’ 25-year lifespan once you save enough on your energy bill to gain back your initial investment. 

The initial upfront price could save you from increasing utility prices over the next couple of decades since utility rates have increased by about 2.9% annually for the past 15 years. There are also fedral, state and local incentives, such as the federal tax credit that allows you to deduct 30% of the total installation cost, making them even more affordable for the average homeowner.


Reliability is one of the biggest deterrents when it comes to using solar panels as a main energy source for homes. Solar panels require sunlight, so they’re far more productive during certain seasons. However, as long as the sun is shining, their failure rate remains low. 

Research has shown that only .05% of solar panels failed between 2000 and 2015. That rate will likely decrease as solar panel technology continues to advance. Additionally, your home solar power system will most likely connect to the local electrical grid. This ensures you access to home backup battery power whenever the sun isn’t shining.

Contact The Solar Cowboys To Increase Your Home’s Value

A solar energy system makes sense as an environmentally conscious investment that pays for itself over time. But do solar panels add value to a home? In short, yes.

Increasing the value of your home is one of the many reasons to switch to solar, alongside being one of the safest and smartest long-term investments you can make as a homeowner.

If you are still unsure about your options,  there’s always the option of solar panel leasing. Similar to renting a house or a car, you pay a fixed monthly payment but you do not own the solar panels. In return, you get all the solar energy the panels produce, which stills reduces your utility bills.


You can also contact solar panel company Freedom Solar by calling +1 (469) 399-0009 or complete our online inquiry form to begin your free consultation, which includes a quote and estimate of your savings potential.

Contact The Solar Cowboys Now

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