Do Solar Panels Increase Home Value?

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Written by Tamara Jude + 1 other Reviewed by Roger Horowitz Updated 06/25/2024

Solar panels come with numerous benefits, including increased home value. Our guide takes a closer look at how much installing solar panels can boost your home’s market value, factors that influence your final listing price, and the effects on your property tax. Plus, we’ll share how you can score additional savings with solar tax credits and incentives.

4 Best Solar Companies of 2024

Best Solar Leasing : SunRun

Best Customer Support : Palmetto Solar

Best East Coast Installer : Solar Energy World

Most Reputable : Blue Raven Solar

How Can Solar Panels Increase My Home’s Value?

Home improvement projects such as new roofing or plumbing can increase your property value, and solar panel installation is no different. The U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) conducted the largest-ever study of solar homes between 2002 and 2013 in eight states to determine how adding solar panels impacts home buyers.

The study found that buyers in six of those states were willing to pay $15,000 more for homes with solar panels than comparable homes without them.

Company	Star Rating	Warranties	Payment Options	Link
GET QUOTE	4.5	10–25 years	Full purchase, loan, lease, PPA	GET QUOTE
GET QUOTE	4.4	10–25 years	Full purchase, loan, lease, PPA	GET QUOTE
GET QUOTE	4.4	25–30 years	Full purchase, loan, lease, PPA	GET QUOTE
GET QUOTE	4.4	10–25 years	Full purchase, loan	GET QUOTE
GET QUOTE	4.4	25 years	Full purchase, loan	GET QUOTE
GET QUOTE	4.4	25 years	Full purchase, loan, lease, PPA	GET QUOTE
GET QUOTE	4.6	25 years	Full purchase, loan, lease, PPA	GET QUOTE

No results were found.

Additional studies have discovered that the added value from solar panels directly correlates to your long-term energy savings. The National Renewable Energy Laboratory (NREL) shared details from a study published in The Appraisal Journal, which is a quarterly academic publication for the Appraisal Institute, the largest professional association of real estate appraisers in the United States. This 2008 study concluded that home value increases by $20 for every $1 reduction in yearly utility bills. So a solar system that reduces energy costs by $500 per year can increase home value by $10,000.

More recently, Zillow found that homes with solar panels sell for an average of 4.1% more than comparable homes without solar power. This added value allows sellers and real estate agents to increase the asking price for a home. Buyers benefit from an energy-efficient home, and sellers can profit from an increased resale value. Depending on the value of your home, that 4% bump could easily make a $9,000 difference—if not more.

What Factors Influence the Property Value of a Solar Home?

Installing solar panels won’t always result in a higher home value. Several external factors, including location, local electricity rates, and your solar panel system’s value, can affect your bottom line. Here’s a closer look at the variables that can increase or decrease your property value.

Location

Not every state has the defined laws, solar installers, or local support needed to make solar panels profitable for a homeowner. Some areas actively encourage homeowners to convert to clean energy, making a solar energy system more valuable in those markets. The Solar Energy Industries Association (SEIA) named the following states as top solar markets based on their solar energy capacity (in order):

These locations support homeowners in their transition to solar energy with laws and regulations that benefit solar customers. They may also offer additional solar incentives and credits that help maximize your return on investment (ROI).

Find Solar Companies in Your State

Electricity Rates

Areas with high electricity rates benefit the most from solar panel installation. This is because solar power allows you to create your own energy more affordably, rather than relying on utility companies with expensive electricity rates. In turn, you’ll spend less on monthly energy bills.

Areas with high electricity rates include California, Colorado, Florida, New Jersey, and New York. This means that homeowners in San Francisco, Orlando, or Denver can sell their solar-powered homes at a higher price than homeowners in Chicago because residents in these cities will save more by using solar power.

Installing a solar battery can be another selling point. These batteries store excess energy your solar panels generate throughout the day to use at night or during power outages. The most powerful solar batteries can potentially power your home for hours. You can also use the energy when electricity rates are highest to save more money.

Solar System Age

Newer solar systems are more valuable than old ones because they’ll provide more years of use and savings to a homebuyer. An older system could also be close to or near the end of its warranty coverage, meaning the buyer could be stuck paying for necessary upgrades, replacement parts, or a completely new system.

Solar systems usually last 25–35 years, possibly 40 years if they’re in optimal condition. We recommend staying up-to-date on solar panel maintenance to ensure your system remains valuable, as well as getting it assessed and serviced before a home sale.

Quick Tip

If you’re considering buying a home with a solar system, be sure to get the full details on the system’s age and any repairs or upgrades that have taken place since its original installation. If you plan on selling a home with a solar system, it’s your responsibility to maintain the panels and the system before the sale.

Newer solar panels may also incorporate more efficient or durable materials. Solar technology is still a relatively new and rapidly evolving landscape. To get an idea of just how much better new systems may be, check out this video with Ross Trethewey and Professor Vladimir Bulović of the Massachusetts Institute of Technology (MIT):

Solar Panel Ownership

Who legally owns your solar panel system significantly impacts your home value. If you bought your solar panels in full or have already paid off your loan, you can include them in your home sale. This is the most straightforward ownership transfer and the most high-profit option for the seller. Affordable solar panels can make solar ownership realistic for homeowners that aren’t prepared to pay a premium for solar.

The situation is more complicated for leased systems. Since you don’t legally own the system, the buyers must decide if and how they want to take over ownership. Leased solar systems can be transferred to the buyer with a buyout or transfer:

Buyout: With a buyout, you can choose to pay off the remainder of your solar lease, and the buyer has the option to start a new lease under their name. However, you’ll have to pay the remaining lease balance all at once, which can be hefty depending on your contract’s length and age.
Transfer: The second option is to transfer the lease to a new owner willing to take it over. This is the most cost-effective option when selling a home with a leased system, as you won’t have to spend as much of your own money to complete the sale. However, the new buyer must meet the qualifications for a lease, including a credit check.

In either case, ownership of a leased system does not transfer to the new homeowner automatically. The buyer must qualify for a solar lease on their own merits.

Get your solar quote today.

How Do Solar Panels Affect My Property Tax?

Because installing a solar panel system increases your home value, your property taxes may increase as well. However, many states have introduced laws that exclude solar equipment from sales tax or property tax. Currently, 36 states offer a property tax exemption for solar equipment, and 25 states offer sales tax exemptions for residential solar equipment.

Property tax exemption laws allow you to benefit from increased home value without paying more taxes. The exemption percentage varies significantly from state to state. For example, some states offer 100% exemption, while others may stipulate a limited number of years for your exemption. Take time to understand your state’s policy when considering going solar.

How Can I Save Money on a Solar System?

Installing a solar energy system requires a sizable initial investment. According to solar industry research data from the SEIA, solar panels cost an average of $3.43 per watt in 2023. This amounts to $20,520 for a standard 6-kilowatt system.

The total cost of installing solar panels can vary based on the type of solar panels you buy, system add-ons, additional services, and local pricing. However, you can save a significant amount of money thanks to solar incentives, rebates, and tax credits.

Solar Tax Credits, Incentives, and Rebates

Net Metering

If you own your system, you can take advantage of all federal and state tax credits available. The federal solar tax credit allows you to claim 30% of your total solar system costs on your federal taxes. It will remain at 30% until the end of 2032. The credit lowers to 26% in 2033 and will reduce to 22% in 2034.

State tax credits vary depending on each state’s laws. Additional rebates and credits may also be available from your utility company or city government. You can check the Database of State Incentives for Renewables and Efficiency (DSIRE) for the latest information about solar incentives in your area.

It’s important to note that only new solar customers can claim these incentives. The original owners can only claim these credits one time. If you buy a home with a preexisting system, you cannot apply for these credits. However, you may be able to participate in ongoing rebates and programs, such as net metering.

Homeowners can benefit from net metering programs, which allow you to get a one-to-one credit on your electric bill for the excess energy your solar system produces and sends back to the grid. The credits can also be used to offset when customers need to pull power from the power grid, such as at night when a solar system isn’t producing. Terms and credit rates vary by state and utility company.

Our Top Solar Company Picks

Sunrun

4.5

We like Sunrun for its four financing options, including its unique leasing options if you don’t want to own your system. This stands out to us because the other companies on this list don’t offer as many options.

Prepaid and leased systems also include a 25-year warranty with system service and maintenance, ongoing monitoring, and theft insurance. The company even offers financing plans for quality monocrystalline solar panels and products from trusted brands such as LG.

How We Scored Sunrun

Sunrun earned 4.4 out of 5 stars based on our methodology. The company gained many points for its positive reputation, comprehensive leasing options, and well-rounded warranty coverage. It lost some points for is limited service selection.

Solar Equipment and Services (15 out of 25 points): Sunrun provides solar panel and battery installation but uses third-party installers. Though this is becoming an industry standard, in-house installers typically yield better communication and quality. The company also doesn’t provide roofing services or energy audits but does offer quality active monitoring assistance.
Warranty and Performance Guarantees (19 out of 25 points): Sunrun offers quality warranties, such as its 25-year manufacturer and labor warranty, but doesn’t include a performance guarantee.
Brand Reputation and Professional Certifications (13 out of 15 points): Sunrun has one of the higher customer BBB ratings we’ve encountered, and the company maintains an overall positive customer reputation online.
Financing Options (13.5 out of 15 points): The company doesn’t offer any in-house financing but provides more warranty coverage for customers interested in solar leasing than other providers, such as Palmetto.
Industry Experience (9 out of 10 points): Sunrun holds 17 years of experience in the solar industry, making it a veteran compared to a newer company such as Blue Raven Solar.
State Availability (8 out of 10 points): The company only serves 18 states.

Pros and Cons

Pros Provides system monitoring that signals issues with your system Offers diverse financing options to suit various budgets Provides EV and solar battery solutions Cons Limited online information on solar incentive disqualification with leases Requires added costs for the same coverage plans as leased and prepaid customers Varies solar battery availability by state

Warranty and Financing

Warranty

Sunrun backs its systems with a 10-year comprehensive warranty which includes product, roof penetration, and workmanship coverage.

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
✔ PPA

State Availability

Available in: California, Colorado, Connecticut, Florida, Hawaii, Illinois, Massachusetts, Maryland, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, plus Washington, D.C. and Puerto Rico.

Reputation and Reviews

The company earned DroneDeploy’s 2022 Guardian of Safety Award for incorporating drone technology in its site assessments. In 2021 and 2022, Sunrun was recognized by Comparably with 14 awards. Its accolades include Best CEOs for Diversity 2022, Best Company Culture 2021, and Best Company for Women two years in a row.

Sunrun currently holds an A+ rating from the BBB and is accredited. Former customers praised the comprehensive coverage for leased systems but complained about delayed installations, poor customer service, and poor communication with project managers. Additionally, some customers note being confused by Sunrun’s leasing and PPA options, though they also mention Sunrun is willing to discuss and clarify these plans.

Palmetto

4.4

Palmetto Solar offers a wide range of quality solar products and excellent customer service, including phone, email, and online chat options, an online service request portal, and a library of troubleshooting resources. Overall, Palmetto offers more customer support than other providers we reviewed, most notably through its tiered system protection plans and mobile app.

How We Scored Palmetto Solar

Palmetto earned 4.4 out of 5 stars according to our methodology. The company scored more points for its comprehensive service selection and long-term protection plans. It lost some because of its standard warranty options and lack of production guarantee.

Solar Equipment and Services (20 out of 25 points): Palmetto offers an excellent selection of solar services, including solar battery and electric vehicle (EV) charger installation, energy audits, and active monitoring.
Warranty and Performance Guarantees (16 out of 25 points): The company’s warranty options don’t stand out as much as Sunrun’s. It offers industry-standard coverage for 25 years on products and 10 years on labor.
Brand Reputation and Professional Certifications (14 out of 15 points): Palmetto has a highly positive online reputation on popular review sites such as the BBB. The company also screens its installers to ensure they’re certified with the North American Board of Certified Energy Practitioners (NABCEP).
Financing Options (13.5 out of 15 points): Palmetto doesn’t provide in-house financing but offers all possible payment methods.
Industry Experience (8 out of 10 points): Palmetto holds a decent amount of experience, with 15 years in the industry.
State Availability (8 out of 10 points): The company serves 17 states.

Pros and Cons

Pros Gives access to customer support via email, chat, phone, and app Offers a tiered system protection plan Provides an online solar savings calculator to estimate potential savings Cons Limits its active monitoring services to three years Shorter roof leak and workmanship coverage than other installers Some online reviews mentioned permitting and installation delays

Warranty and Financing

Warranty

Palmetto’s warranty protection includes a 25-year panel warranty, 12-year inverter warranty, 10-year workmanship warranty, and five-year roof penetration warranty.

Financing Options

✔ Full purchase
✔ Lease
✔ Loan
✔ PPA

State Availability

Available in: Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Nevada, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia

Reputation and Reviews

Palmetto Solar received Solar Power World’s Most Forward-Thinking Contractor award in 2022. Inc. magazine recognized the company the same year with a Power Partner Award. Palmetto also aims to provide solar energy to underserved communities with its Get Solar, Give Solar program.

Palmetto Solar is accredited by the BBB and has an A+ rating from the site. While reading online reviews, we noticed that homeowners praised Palmetto for its dedicated installation managers and quality systems but mentioned very long waiting periods for permitting, plus installation delays.

Solar Energy World

4.4

Solar Energy World (SEW) is one of the most robust and well-regarded solar installation companies. It boasts several impressive features, such as its 30-year manufacturer’s warranty. Its service area is limited, and it doesn’t offer energy auditing services. We like that SEW discloses what solar panels it primarily works with and that the panels are from trusted, quality brands such as Qcells and Silfab.

Roughly 11% of our surveyed solar users purchased their system from Solar Energy World.

How We Scored Solar Energy World

SEW scored 4.4 out of 5 stars according to our methodology. The company received many points because of its warranty, which is longer than most other solar companies’ warranties. SEW offers a 30-year manufacturer’s warranty on all its solar panels and inverters, whereas many providers only offer 25-year warranties.

Solar Equipment and Services (18 out of 25 points): The company is an ideal option for many basic solar products and services, such as solar panels and battery installation. It lost points because it doesn’t install EV chargers or perform energy audits.
Warranty and Performance Guarantees (19 out of 25 points): SEW’s manufacturer and labor warranties are standout features, but the company doesn’t include any production guarantees with its work.
Brand Reputation and Professional Certifications (15 out of 15 points): The company’s reputation is one of the best, with high BBB and Google Reviews ratings. We also found no active alerts or lawsuits.
Financing Options (13.5 out of 15 points): SEW offers all possible solar payment options but doesn’t provide an in-house financing department.
Industry Experience (8 out of 10 points): The company has been in business since 2009, so it received most of the points in this category.
State Availability (6 out of 10 points): SEW limits its service area to eight East Coast states.

Pros and Cons

Pros Features an extensive solar product catalog with trusted brands Includes free active monitoring Hires NABCEP-certified installers and designers Cons Reviews mention communication issues with staff Warranty coverage varies by solar panel brand Doesn’t offer a power production guarantee

Warranty and Financing

Warranty

SEW offers a 30-year manufacturer’s warranty on all purchased solar panels and inverters. However, coverage varies by brand, and the company doesn’t guarantee them with every panel option.

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
✔ PPA

State Availability

Available in: Washington, D.C, Delaware, Florida, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, and Virginia

Reputation and Reviews

The company landed on Solar Power World’s 2023 Top Solar Contractors List in the No. 10 spot.

The BBB accredits SEW, and the company holds an A+ rating. Former customers praise the company for its professionalism, assistance with applying for financial incentives, and smooth installation process. However, some reported discrepancies in finances and scheduling.

Blue Raven Solar

4.4

Blue Raven Solar has one of the best reputations for reliability and trustworthiness. It has won awards for its team and CEO, and customer reviews report great customer service and prompt installations. The company also stands out for its in-house financing, which includes 18 months of free solar energy.

Out of all solar brands in the market, 6.5% of our survey respondents chose Blue Raven.

How We Scored Blue Raven Solar

Blue Raven received 4.4 out of 5 stars according to our rating system. The company scored the most points for its customer service reputation and warranty coverage. It also earned points for providing all standard solar panel services but lost some due to its limited financing options and lack of roof leak coverage.

Solar Equipment and Services (18 out of 25 points): Blue Raven offers solar panel and battery installation, active monitoring services, and energy audits. However, it doesn’t offer solar roofs, EV chargers, or additional roofing services.
Warranty and Performance Guarantees (22 out of 25 points): The company offers top-of-the-line warranties, including a 25-year workmanship warranty. The company earned points fo providing a performance guarantee, but its guarantee is shorter than many other providers. However, it doesn’t provide any roof leak coverage.
Brand Reputation and Professional Certifications (13 out of 15 points): Blue Raven has high customer review ratings on its BBB profile and other popular review sites. The company uses in-house installers but doesn’t ensure they’re NABCEP-certified, which made it lose some points in this category.
Financing Options (12 out of 15 points): Blue Raven offers some of the best in-house financing of the companies this list, but it limits this financing to solar loans. You may want to consider a different provider, such as Sunrun, if you’re looking for a lease or PPA.
Industry Experience (7 out of 10 points): Blue Raven has less experience than other providers, with only 10 years in the industry.
State Availability (7 out of 10 points): The company limits its service area to 19 states.

Pros and Cons

Pros Offers SunPower’s high-efficiency panels and storage options Provides a unique in-house financing option which includes 18 months of free solar energy Recognized as one of the industry’s most reputable solar companies Cons Offers one of the shortest production guarantees among our reviewed companies Some customer reviews mention poor communication Workmanship warranty falls slightly below the industry standard

Warranty and Financing

Warranty

A Blue Raven system has a 25-year product warranty, a 10-year workmanship warranty, and a two-year production guarantee.

Financing Options

✔ Full purchase
✔ Loan

State Availability

Available in: Colorado, Florida, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nevada, North Carolina, Ohio, Oregon, South Carolina, Texas, Utah, Virginia, Washington

Reputation and Reviews

Blue Raven has won numerous awards from Comparably, a site known for its company culture and reputation reviews. It also ranked No. 20 on Glassdoor’s Best Place to Work in the USA in 2021.

Blue Raven is accredited by the BBB and currently holds an A+ rating. We noted that customers praised the knowledgeable staff and prompt installation but cited poor communication after completing projects. We analyzed several consumer reviews and found that some of these issues stem from the company’s financing department and third-party installers.

Read our review of Blue Raven Solar for more information.

Our Conclusion

Solar panels are a big investment, but they can significantly increase your home value in addition to providing long-term energy savings. How much value solar panels add to your home varies by your location, system health, system energy efficiency and state and local policies. But whether you want to make your home more valuable for yourself or potential buyers, a solar panel system upgrade could be worth it.

If you’re looking to install a new solar system in your home, use the tool below to begin your search for a top-rated solar installer in your area.

FAQ About Solar Panels

What are the benefits of a house with solar panels?

A house with solar panels has numerous environmental benefits. Solar energy is a clean power source, helping to make homeowners less dependent on costly fossil fuels and reduce their carbon footprint. Solar energy is also much more affordable than traditional electricity, lowering your monthly energy bills and potentially saving you thousands over time.

What is the cheapest way to buy solar panels for your home?

The cheapest way to buy solar panels is to pay for your system outright. Though this requires a large initial sum of money, you avoid paying interest on a solar loan, which would increase your cost in the long run. Unlike leasing, buying your system up-front also qualifies you for the federal tax credit and state solar incentives and rebates that can cut down on costs.

Will selling a home with a leased solar panel system affect my home value?

Selling a home with a leased solar panel system likely won’t affect your home value. Though home buyers may see the solar panels as a plus, selling a home with leased panels is more complicated than selling one with an owned system.

Does adding solar panels affect your home insurance?

Adding solar panels will not directly increase your home insurance premiums. However, you may want to increase your coverage amount or add a separate policy to ensure that your solar panels are fully covered. Check your insurance company to find out whether your policy will cover solar panels.

To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.