Thinking about a DIY solar kit before you sell? Do solar panels increase home value?
Money spent on panels doesn’t always come back at closing. Here’s what to expect and what changes the result.
Owned solar panels can raise a U.S. home’s resale price. The real gain depends on the system, the property, and what buyers nearby will pay. Most national estimates land between 3% and 4%.
One nationwide comparison found that homes with solar sold for 4.1% more than similar homes without it. Those properties were listed and sold between March 1, 2018, and February 28, 2019.
Applied to the median-valued home in that dataset, 4.1% adds $9,274. That assumes a median price of about $226,200. A pricier or cheaper house will show a different dollar amount.
A separate multistate study put the average premium at about $4.18 per watt for host-owned systems. A typical 3.6-kilowatt array therefore added roughly $15,000 to sale value.
Other U.S. research found premiums of about 3.5% in the San Diego and Sacramento areas. An Arizona analysis came back higher, at 15%. One national percentage can’t predict every local sale.
Panels can contribute to an appraisal in three situations:
Even then, the appraiser needs market evidence to justify the adjustment.
An appraiser compares your home with similar recent sales. They look at the system’s size, age, condition, location, and energy performance. The equipment’s cost alone never justifies a dollar-for-dollar bump in appraised value.
When ownership isn’t clear, the lender may order a title review and a Uniform Commercial Code, or UCC, search of personal-property filings. Without solid paperwork or a confirming search, the panels may be given no value at all.
Gather these records before you list:
With a lease or power-purchase agreement, usually called a PPA, the solar company owns the equipment. The panels typically stay out of the appraised value. The monthly payment can also affect a buyer’s mortgage qualification.
If the provider approves the buyer and the local utility allows the transfer, the buyer usually takes over the contract. Otherwise, you may prepay the remaining balance, buy out the system, or arrange for its removal, depending on the terms.
A solar loan usually ends one of two ways. The buyer assumes the debt if the lender allows it. Or the loan is paid off from your proceeds before closing. Ask for the payoff figure early. The remaining balance comes straight out of your sale proceeds.
Local sales data shows a wide spread in solar premiums. The dollar difference depends heavily on local home prices.
| Riverside | Greater New York | Los Angeles | San Francisco | Orlando | |
|---|---|---|---|---|---|
| Premium | 2.7% | 5.4% | 3.6% | 4.4% | 4.6% |
| Dollar premium | about $9,926 | about $23,989 | about $23,295 | about $41,658 | about $10,994 |
Net metering credits a customer for eligible electricity sent back to the grid. The credit rate, system-size limit, and eligibility rules differ by state and utility.
Utilities differ in how they credit exported electricity:
Where rooftop systems are common, agents and appraisers have plenty of comparable sales. Where solar homes are rare, buyers will likely want clearer documentation.
Check the utility paperwork before you count on savings
A measured premium compares sale prices for homes with and without solar, after adjustments. It doesn’t prove every dollar came from the panels. Solar homes often have newer roofs, upgraded interiors, batteries, or other features buyers pay for.
Don’t add the 4.1% national figure, the $4-per-watt estimate, and a local percentage together. They come from different datasets, markets, system sizes, and valuation methods. Adding them would count the same benefit more than once.
Older systems tend to earn a smaller premium. Buyers get fewer remaining years of production and warranty coverage. Measured results from several states show the premium dropped sharply as systems aged. The biggest decline came around the ten-year mark.
A clean installation record helps buyers judge the system.
Documents to put in your sale file
Your net proceeds equal the sale price minus:
A higher sale price doesn’t automatically mean more cash in hand. Financing obligations can eat up the premium.
Before you decide whether a kit is worth installing for resale alone, price the system against your own neighborhood’s sales and check who will own the panels when you sell. A premium that looks strong on paper can shrink quickly once the loan payoff, the ownership paperwork, and the system’s age are taken into account. Ask a local appraiser or agent which recent sales in your area include solar, and how buyers there have treated owned versus financed systems.
Not automatically. A lease, PPA, or unpaid solar loan adds paperwork for the buyer and lender.
Start the contract transfer or payoff process before you list, so the buyer gets clear terms.
No solar resale estimate guarantees a $50,000 increase.
Reaching that amount takes a high-value local market, a system that produces meaningful savings, strong comparable sales, and enough remaining equipment life.
It depends on your state and sometimes your city or county.
Florida and Arizona, among others, offer exemptions or abatements for qualifying residential systems. Filing rules and eligibility conditions vary.