How Much Do Solar Panels Increase Home Value in 2026?

What Do the Latest 2026 Studies Show About Solar Home Value?

According to a 2024 study conducted by SolarReviews, homes with solar panels sold for an average of 6.8% more, which represents significant growth compared to earlier research. The most recent analysis reveals that homes with owned solar panels sold for 5% to 10% more than similar homes without solar, a significant jump from Zillow's 2019 study. The SolarInsure study compared 2,350 homes with owned solar systems against 860 comparable homes without solar and 1,790 homes with third-party-owned solar, providing a comprehensive look at how solar affects property values.

The key statistics show an average value increase of 4-6.8% depending on location and market conditions, translating to $15,000-$29,000 for median-valued homes nationwide. Most homeowners recover 100% of their solar investment through combined energy savings and increased home value, with solar homes consistently outperforming non-solar homes in sale price across 32 of 36 states studied.

How Much Dollar Value Do Solar Panels Add to Your Home?

Berkeley Lab's landmark study found buyers pay about $4 per watt for an existing solar system, meaning a typical 8 kW system adds $32,000 in perceived value. In sun-heavy, high-electricity-rate markets like California, premiums are higher, ranging from 5% to 10%, or roughly $39,500 to $79,000 on a $790,000 home. This variation reflects regional differences in electricity rates, local solar incentives, and buyer demand.

What Factors Determine How Much Value Solar Adds?

1. Ownership Status: Owned systems consistently add more value because the new buyer gets free electricity with no monthly lease payment. Leased panels usually subtract value because the buyer must qualify to assume the lease, which narrows the buyer pool and can delay closing.
2. System Age and Condition: System age played a smaller role than expected, with installations over five years old still earning a 5% to 6% premium, while newer systems saw 7% to 9% increases. Condition, age, and system size matter more than brand, with a newer, larger, owned system with a transferable warranty earning the largest premium at resale.
3. Local Electricity Rates: Geographic location influences value because different communities experience different electrical costs, and higher electrical costs result in greater value from solar panels, while geography also influences sun exposure and social benefits.
4. System Size and Output: Bigger solar installations may present a better value add than smaller systems, however, it's not the number of panels that matters as much as the power output, with a smaller high-efficiency system being just as impactful as a larger lower-efficiency system.
5. Regional Market Conditions: High-premium markets include California, New Jersey, Florida, and Massachusetts—all states where electricity rates are above the national average and strong solar incentives exist.
6. Local Real Estate Demand: Homes with owned solar sell roughly 20% faster than comparable non-solar homes because they appeal to buyers seeking lower monthly utility costs.

Why Do Buyers Pay More for Homes With Solar Panels?

Buyers pay more for solar homes for straightforward economic reasons: lower electricity bills, as a home with solar has predictably lower or eliminated monthly electric costs, and buyers recognize this as an immediate, ongoing financial benefit. Cost savings are a primary factor because buyers recognize and are willing to pay a premium for the 25+ years of projected utility bill savings solar provides, which adds up to significant amounts over the system's lifetime.

Solar locks in energy costs, and buyers in markets with rising utility rates see this as a hedge against future increases, which includes virtually every market. Recent real estate data reveals that 84% of home buyers consider energy efficiency a priority, with solar installations ranking high on their wishlist. Unlike kitchen or bathroom renovations that can disrupt homes for months, solar installation typically takes just one to two days and is minimally disruptive to daily life.

Are Solar Panels Still a Good Investment Without Tax Credits?

The federal residential ITC (Section 25D) expired in 2025, but solar economics remain strong in 2026 with equipment costs dropping 30% since 2020, and electricity rates rising up 18% in the Northeast since 2023. Equipment costs have dropped significantly, with EnergySage data showing prices hit record lows of $2.50 per watt in late 2024, down from over $3.80 per watt in 2014.

With the average solar panel system costing about $29,649 before incentives, homeowners may be able to recover their entire investment through property value increases alone, then enjoy decades of electricity savings on top of that. Household electricity costs are expected to increase substantially as utilities expand capacity to meet growing demand, and with electricity prices historically increasing around 2.8% annually, the value of solar's fixed energy costs becomes more significant each year. Visit RetailTill for more insights on energy cost management to understand the broader context of utility pricing trends.

How Do Appraisers Value Solar Panels in Home Appraisals?

Many appraisers now use the Appraisal Institute's Residential Green and Energy Efficient Addendum to value solar, which is a standardized form that helps appraisers assign proper value to solar installations, though not all appraisers are trained in green valuation, so it's recommended to ask your real estate agent to request an appraiser who holds the AI Green certification or has solar valuation experience.

Appraisers typically use one of three methods: the income approach which calculates the present value of future energy savings, the comparable sales approach which compares your home to similar solar-equipped homes that have recently sold, or the cost approach which values the system based on its depreciated replacement cost. The Department of Energy-funded Lawrence Berkeley National Laboratory research consistently shows that buyers are willing to pay approximately $4 per watt of installed solar capacity, translating to $44,000 in added home value for a typical 11-kilowatt system, and also indicates that solar increases home value by $20 for every $1 reduction in annual utility bills.

Will Solar Panels Increase Your Property Taxes?

Like other home improvement upgrades, solar panels may increase property taxes, but 29 states have some form of solar property tax exemption. In Ohio and South Carolina, homes are worth more to buyers but owners pay no additional property taxes, achieving the best of both worlds. In Ohio and South Carolina, solar systems are exempt from property tax assessment, and in Kentucky the impact is typically minimal, resulting in homes with increased market value for resale purposes without a corresponding tax increase.

Before installing solar, check your state's property tax laws to understand how solar installations may affect your assessments. Some states offer full exemptions, while others only partial exemptions, and it's important to factor this into your overall return on investment calculation.

Should You Install Solar Just Before Selling Your Home?

If planning to sell within 1-2 years, 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. Real estate brokers do not recommend solar panels as a short-term real estate investment, as home solar installations can actually complicate or delay the sale of a home, especially if there is a lease or ongoing maintenance contract in place, though if you plan to be in your house for five years or more and are interested in solar, the upgrade is still recommended.

If you're selling a home that already has solar, make sure to highlight the system's value with documentation and energy savings data. Many buyers want to see actual energy bill savings numbers and production data rather than marketing claims, so keeping detailed records strengthens your negotiating position. Work with a real estate professional experienced in marketing solar homes to maximize value.