Solar Panels Add 5-6% to the Value of Your Home

Grid-tie solar is often touted as a sound financial investment, returning $18k-$28k in energy savings to the average American homeowner's pocket over the life of the system.

But what if you move homes before that lifecycle is up? Will you be able to recover your investment in solar when you sell your home?

Back in 2011, we first published our assessment of the impact of solar panel systems on home resale value. At that time, we concluded that a 5 kW system may add approximately $27,500 in resale value versus comparable non solar homes in the same market, a 3.5% increase over baseline.

Over time, the cost of solar components have come down, while the cost of electricity has gone up. The math has changed, so this article has been updated to reflect the latest research data. These days, our best estimate is that solar panels add 5-6% in resale value to the average American home.

Here's our evaluation of the latest available research data we have on the subject.

Last updated: 11/17/25

Do Solar Panels Increase Home Value?

For the past few decades, studies have consistently shown two things to be true about solar homes on the housing market:

Solar homes sell for more, on average, than comparable non-solar homes
Solar homes sell faster, on average, than non-solar homes

The first conclusion is not exactly earth-shattering. If you add something of value to your home, it makes sense that its value would increase. (Although, sadly, this isn't always the case with home improvement projects!)

The second is a nice bonus - nothing wrong with reducing time to close - but it doesn't have a huge impact on the financials, so we won't focus on that here.

The important question, of course, is whether the juice is worth the squeeze. If you move before reaping the long-term benefits, will solar add enough resale value to your home to offset the initial investment?

SolarInsure Study (2025)

For the answer, we turn to a study published by SolarInsure in Feb. 2025, which evaluated Zillow home sale prices for solar vs. non-solar homes with otherwise comparable specs.

The study concludes that solar homes sell for 5-10% more on average, though that figure is skewed by conditions that can move the premium by quite a bit. I'm comfortable estimating the real premium at 5-6%, but I don't think the top end of that range is representative of reality. Let me demonstrate why.

Methodology: analysis of 5,000 homes in California

Sample size: 5,000 homes
- 2,350 owned PV systems
- 1,790 leased PV systems
- 860 non-solar homes
Evaluated only homes in California (see "Factors Impacting the Solar Price Premium")
Sale prices adjusted by the S&P Case-Shiller Home Price Index to account for shifts in the real estate market over time

Observations: Solar Increases Home Value By 5-6% (up to 10%)

This study concludes that solar homes sold for $37,500 - $75,000 more than non-solar counterparts. But the mean of this price range is nowhere close to the average. High price premiums exist for newer systems, due to less wear and tear on the components, skewing the top end of that range.

Systems less than 5 years old translated to a 7-10% increase in home resale values, demonstrating that recently installed systems do a good job of retaining their value. This is good news if you are going through an unexpected life change - relocating for a new job, for example - and end up putting your home back on the market much earlier than expected.

However, most homeowners have a much longer-term plan in mind when they invest in solar, expecting to settle in their home for decades. In these cases, we would set a modest estimate of 5-6% increase in home resale value, to account for depreciation of the value of the solar system over time.

We also want to point out that the study was conducted in California, a notoriously solar-friendly state, and that the study was commissioned by a company incentivized to sell solar panels. The data is certainly being presented in such a way as to show solar in the best possible light. It is strongly advised to evaluate these figures based on your personal circumstances, not a best-case scenario benchmark.

Older systems, and systems which were installed in less solar-friendly states, will contribute a premium that is more in line with (or even falls short of) the 5-6% range.

The Trend Line

A similar study in 2011 suggested a 3.5% increase in home resale value for solar-equipped homes. Another study published in 2019 estimated the premium at 4.1%. Now, we estimate the range to be 5-6%.

Solar has steadily been adding value to homes since its inception, with the premium increasing by a modest amount over time.

The Takeaway

Although I've expressed caution over the interpretation of the data, my fundamental attitude toward the economics of solar hasn't changed: solar is a sound investment, strictly from a financial perspective.

In our article calculating the typical return on investment for solar, we concluded that the average American home would save more than $18k on energy bills over the life of the system. That number jumps above $28k for DIY solar projects, which cut out the cost of the installer. Either way, those with the means to invest in solar stand to save a considerable amount of money by doing so.

The financial case for solar is based on reaping the rewards of energy savings over the long-term, but this study also reassures me that when solar homeowners relocate, they have a great chance of recovering (or even profiting from) their investment into solar.

Factors Impacting the Solar Price Premium

As mentioned, these figures can and do change based on your unique circumstances. Here are some things to consider as you evaluate the impact of solar on your home's resale value:

Owned vs Leased Systems

The primary driver of value is system ownership. Systems which are rented or leased through a third-party vendor notoriously introduce headaches to the negotiation process. Before proceeding with sale, the new buyer must agree to inherit the contract from the old solar provider - often with terms unfavorable to the homeowner.

Many a home sale has fallen through because the buyer did not want to inherit a toxic contract for a leased solar system. This is why we are staunchly against PPAs (power purchasing agreements), leases, rentals, or any other agreement where the homeowner does not actually own their system.

Location

Due to differences in feed-in policies, net metering rates, and other incentive structures, some states are much more solar-friendly than others. Expect homes in states with unfriendly solar adoption policies to lag behind the average.

System age

Older systems sell for less due to depreciation in the value of their components. Older systems still add to the value of your home, but at a reduced rate.

Real Estate Market Forces

These numbers could change substantially depending on whether you are listing into a buyer's or seller's market. More bidding competition will naturally drive up the price of homes on offer. Market sentiment and timing will impact the actual return you get when you close.

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