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How Much Do Solar Panels Increase Home Value? (2024 Guide)
In this guide, we’ll answer the following:
- How much do solar panels increase home value?
- Will solar panels increase your property taxes?
- Should you get them if you’re planning to sell your house?
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How Do Solar Panels Increase Your Home Value?
Many homeowners, buyers, and appraisers know that the installation of solar panel and solar battery systems can increase a property’s market value. In fact, one study by Zillow confirmed that solar installations increase a home’s resale value by up to $5,911 for each kilowatt of solar panels installed, and another estimated an increase of 4.1% of the home’s value.
Where do these figures come from, exactly? To begin with, consider a Zillow study, which notes that homes with solar installations tend to sell for about 4.1% more than homes without. Of course, this is an average. Some locations show a higher value add (5.4% for New York City), and some show lower (2.7% for Riverside, California).1
An older study from Lawrence Berkeley National Laboratory reveals an increase in resale value of approximately $5,911 for each kilowatt of solar power that’s installed.2 Not to mention that the National Renewable Energy Laboratory also announced that for every $1 of savings on your electrical bill as a result of going solar leads to roughly ~$20 of home value increases. With three trustworthy sources, we are confident in saying that as an investment alone, installing solar panels will 100% lead to the value of your home seeing a lift.
So, how much do solar panels increase home value? Let’s take a look at some averages:
| Home Solar System Size | Amount Solar Panels Increase Home Value* |
| 4 kW | $23,644 |
| 6 kW | $35,466 |
| 8 kW | $47,288 |
| 10 kW | $59,110 |
*Figures based on study by Lawrence Berkeley National Laboratory.
It’s worth noting that these amounts are roughly in line with the total cost of a solar panel system, which may be just the incentive you need to finally take the plunge into solar power.
Blue Raven Solar
Best Solar Financing
Regional Service
Average cost
Pros
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
Cons
- Doesn't offer solar batteries (coming 2022)
We like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry.
For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options. The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower. Its BluePower Plus+ plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.
Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.
In contrast, other installers can only offer similar financing through solar leases, PPAs or third-party providers (such as Mosaic or Sunlight). Third-party loan providers can complicate the process, while opting for a loan or PPA will disqualify you from some of solar’s biggest benefits (additional property value, federal solar tax credit and local solar incentives).
Facts and Figures: Blue Raven Solar
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Year Founded |
| Average Cost ($-$$$$$) |
| Solar Services |
| Brands of Solar Equipment Offered |
| Warranty Coverage |
| 4.5 |
| A+ |
| 2014 |
| $$ |
| Solar Panels, System Monitoring |
| Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower |
| 25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee |
What Factors Affect the Value Add of Solar Panels?
While these simple calculations can give you a ballpark, there are a number of factors that influence the value add of solar panels. Some of the most prominent include:
- Geographic location: Different communities experience different electrical costs (and higher electrical costs result in greater value from your solar panels). Additionally, geography can influence the amount of sun exposure you get, as well as the social benefits of installing solar power.
- Local solar installation prices: Another geographic factor is the cost of getting a new system in your area. If a buyer would save money by purchasing a home with a system already installed, it will make your home that much more valuable.
- System output: As you can see from the chart above, a larger system with more energy generation will provide more added value.
- System age: If you have an older solar system, you’ll need to account for depreciation. Older systems won’t add that much value to your home when you sell it, as there’s a higher chance the buyer will need to do repairs or replace parts sooner.
- System replacement value: Along the same lines as system age, how expensive or difficult parts of your system would be to replace affects the added value of the system overall.
How Do Solar Panels Affect Property Taxes?
Of course, when your property values go up, that usually means that your property taxes increase as well. The good news is that many states offer exemptions, meaning that when you install a solar system, your property taxes do not go up, even if your property value rises. Here’s a rundown of property tax exemptions by state:
| Property Tax Exemption | States* |
| 100% exempt | Arizona, Colorado, Connecticut, District of Columbia, Florida, Indiana, Kansas, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, New Mexico, Oregon, Rhode Island, Texas, Vermont, Wisconsin |
| Local exemptions | Alaska, Hawaii, New Hampshire, Ohio, Virginia |
| 100% exempt for 20 years | Massachusetts |
| 100% exempt for 10 years | Montana |
| 100% exempt for 5 years | Iowa, New York, North Dakota |
| 100% exempt until 2025 | California |
| 80% exempt | North Carolina |
| System-based exemption | Illinois, Nebraska, Tennessee |
| Tax exemption of $50,000 or 70% of total property value | South Dakota |
| No exemption | Alabama, Arkansas, Delaware, Georgia, Idaho, Kentucky, Maine, Mississippi, Nevada, Oklahoma, Pennsylvania, South Carolina, Utah, Washington, West Virginia, Wyoming |
*Accurate as of date of publication.
Are Buyers Looking for Homes with Solar Panels?
Another question to consider when figuring how much solar panels would increase your home value is just how enticing a solar system is to buyers in your community. This is something that will vary by geography, and specifically by local solar literacy.
Simply put, buyers won’t be as willing to invest in a solar system if they don’t really understand how solar panels work or how they can benefit from them. With that said, there’s some data that shows homeowners to be pretty open to energy efficiency features, for the most part.
For example, more than 80% of homebuyers say that energy efficiency is a priority, according to the Zillow Group Consumer Housing Trends Report. Some earlier data from the National Renewable Energy Laboratory shows that homes with solar panels sell 20% faster and for 17% more than those without. (Granted, this information is about 15 years old; there’s now greater supply and greater demand for homes with solar panels, but these data points should be promising nonetheless.)
Do Solar Panels Make Sense for Your Home?
As you weigh the pros and cons of solar energy, it makes sense to consider the overall impact on your property value. You’ll also want to take into account factors including:
- How much you spend on utility bills each month: If you live in an area that has high average electricity rates, you’ll get a better return on your solar energy investment.
- How much sunlight your home gets throughout the year: Some homes are better positioned for solar panel installation than others. If your home is situated at an optimal angle for harnessing the sun’s energy, it makes more sense to go solar.
- Financial incentives available to you: All American homeowners are eligible for the federal solar tax credit, but many states and municipalities have added rebates, low-interest loans and other financial incentives for their own residents as well.
For many homeowners, the question of whether to buy solar panels comes down to cost. If you want to see how much solar panel installation would cost for your home, you can get a free, no-obligation quote from a top solar company in your area by filling out the form below.
If you want to know for sure how solar panels will affect your home value, you can click below to connect with an EcoWatch-vetted installer and get a free estimate.
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FAQs: How Much Does Solar Increase Home Value?
Generally speaking, the opposite is true; installing a home solar array actually increases the resale value of a home, particularly if you have a high-efficiency system that helps lower monthly energy bills. Solar literacy in your local community is an important factor here, but for most homeowners, the answer to this question will be a resounding no. Multiple studies have shown that buyers are looking for more energy-efficient homes to reduce their carbon footprints and help save on electricity bills.
Bigger solar installations may present a better value add than smaller systems. However, in many cases, it’s not the number of panels that matters so much as the power output. A smaller system, assembled with the most efficient solar panels can be just as impactful as a larger, lower-efficiency system. The aesthetics of the system may also be a factor, with many buyers actually preferring smaller, less conspicuous systems.
A few studies have shown that solar installations increase a home’s resale value by up to $6,000 for each kilowatt of solar panels installed, or by about 4.1% of the home’s value. However, this can vary quite a bit from one geographic location to the next, even for comparable homes with similar solar panel systems.
While the initial investment may be steep, solar panels can definitely help to significantly reduce or even eliminate your monthly electric bills. These ongoing energy savings are a nice addition to the elevation in property values.
Comparing authorized solar partners
Average cost
Pros
Cons
BBB Rating
Year founded
Service Area
Brands of Solar Equipment Offered
Warranty Coverage
-
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries (coming 2022)
A+2014Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee
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