If you are considering installing solar panels for your home you might be wondering: Will solar panels increase home value? And you are not wrong to think in this direction. A lot of homeowners and buyers have this question in the back of their minds before entering into solar energy.
After all solar panels are quite an investment and you need to be sure that, they will not only save you some bucks on your energy bills, but will also add some value to your property.
The reassuring news is that solar panels do increase home value but the exact appreciation might vary depending on several factors. In this article, we will explore how much solar panels can increase your home value, what affects this value increase, and whether it’s worth it in the long run. You can also explore our guide on solar panel mounting systems to understand how installation plays a role in maximizing home value.
Do Solar Panels Increase Home Value?
If you need an answer to this question — do solar panels raise home value? Then the short answer is: Yes! Lots of surveys have shown that homes with solar panels tend to sell for more than similar homes without them.
According to a recent Zillow survey, a good number of houses with solar panel systems are getting sold for approx. 3-4% more than those without solar panels. This 3-4% difference might sound like a negligible number when you are reading this. But in areas with higher real estate prices, that extra 3-4% can actually translate to tens of thousands of dollars!
Also solar panels make your house stand out from the others if it’s equipped with solar panel setup. This is an important point for the buyers who are looking to buy a house with eco-friendly options and long term savings.
How Much Do Solar Panels Increase Home Value?
When you ask how much are solar panels worth in terms of home value, it is important to understand the increase is based on a number of factors.
General Formula For Value
On average, and depending on the size of the system, size of home, where you live, and the market size and proximity to the market, solar panels can increase the value of your home about $15,000 to $30,000 depending on the factors stated. The rule of thumb states that every $1 you will save, over the lifetime of your home you are increasing your home value by $20. For example, If your solar system saves you $1000 in energy cost in a given year, the value of your home could increase by $20,000 dollars.
Regionality
The value of solar panels can change greatly depending on where you live. In California, New Jersey, Hawaii, and other areas that have high energy rates and poor electricity rates place a higher value on home with solar panels. But in areas with lower energy rates or less demand for solar, the impact on home value might not be as dramatic.
Example of Value Increase
In a state like California where electricity prices are notoriously high, it could add as much as 4.1% to the value of your home to install solar panels when you are selling the home. This could be a lot of money if you are looking at median home prices around $600,000 or more. However, depending on the area, especially in areas of lower home prices or with lower electricity, maybe it would not add as much.
How Exactly Do Solar Panels Increase Home Value?
When attempting to sell your property, and you ask do solar panels improve home value? the answer is: Yes, they do! Solar panels value your home in several ways: I will outline a few here:
Lower monthly charges
The first benefit of solar panels is reducing your monthly electricity bill! Over time, the amount of money you save on electricity can add up, and buyers will be interested in homes that have reduced electrical utility bills. The majority of buyers are interested in energy-efficient homes, so having that solar system will help to sell your home if you’re selling.
Eco- Friendly
In today’s climate-conscious world, buyers are often gravitating towards sustainable and eco-friendly homes. For those reasons, solar panels help to reduce a home’s carbon footprint which can be a significant deal. A home with solar panels may be perceived as a green home which is a popping trend for buyers in the real estate market.
Energy Independence
Solar panels do provide homeowners with energy independence and limit their dependency on the local/state’s electricity grid. To learn more about going solar off-grid, read our post on off-grid solar systems. In areas where electricity outages and unstable prices occur, solar panels (especially ones with battery storage) can be very appealing to buyers.
How Much Do Solar Panels Increase Home Value?
Is 2025 going to be more of an opportunity for whole home value appreciation with that Solar installed? Yes! Solar will be just as relevant in the real estate environment because renewable energy is becoming more accepted, and committed homeowners pursue energy efficiency and sustainability options.
The federal solar tax credit is still available, and is alive and well, and certainly at this time is a great opportunity in investing in sun energy, and this makes solar even more attractive since the 26% tax rebate can help offset installation costs. It’s a great payback opportunity that makes solar-equipped homes more appealing—even if they’re slightly higher priced.
So in 2025, the homes that have Solar installed will continue to have high valuations. And they will certainly do so while more buyers are looking to transition into energy efficient or sustainable homes and the demand for the assets equipped with solar will continue to be a strong market opportunity.
Factors That Influence How Much Solar Panels Increase Home Value?
There are several factors that determine exactly how much solar panels increase home value. Let’s look at the most important ones.
Location
The area you live in makes a substantial difference in how much the value of homes with solar panels increase. In regions where they have high energy costs or are already accustomed to a prevalence of solar energy; homes with a solar panel system tend to experience higher value increases. For example; California, Colorado, and Florida are well known for their solar friendly climates and homes with solar panels or a solar energy system will generally have a higher value increase.
Size and Type of Solar System
The size and type of solar system will fundamentally affect the value increase. Homes with larger systems or homes with solar batteries will generally see a larger value increase. Larger systems equate to larger savings for the homeowner in energy bills. The larger savings or lower bills relate to larger values for the home.
Market Conditions
In a sellers market where the number of buyers exceeds the amount of housing available, solar panels can add more value. In contrast; in a buyers market where there are a greater number of homes available, the influence of solar panels on home value may be less.
The Solar Tax Credit
Installation of solar panels to your energy system; is also impacted by the worth of the federal solar tax credit; which also provides a financial incentive and decreases the cost of installation for you. Buyers will see the savings from this tax credit as part of their overall value when purchasing a home with solar panels installed.
5 Tips for Maximizing Your Solar Investment
Now that we’ve established how solar panels improve home value, here are some recommendations to maximize your investment:
Get the Right Size System
Your solar system must be properly sized; a too small system will not produce enough energy and a too large system may cost you unnecessary funds.
Maintain Your Solar Panels
Regular maintenance of your solar panels will ensure that they are working efficiently. You should clean your panels on occasion, and look for shading or any other problems that may compromise their performance. For more tips on solar panel maintenance have a look at this easy and quick solar panels maintenance guide.
Talk About Your Savings
When selling your home, talk about the saving you’ve experienced with solar energy. You can present your energy bills after switching to solar to any potential buyer so that they can see the savings you’ll be providing them in the long run.
Solar Battery Storage
Ultimately, if it is an option, consider solar battery options. Battery storage is one of the most valuable energy options you can add to your home as it increases home energy independence.
Always prefer a Qualified Installer
Employ a experienced, qualified and educated solar installer. Make sure the person/contractor you hire is certified and has experience installing solar systems. This will assure you that your entire system is performing its best and it will improve the total value of your home.
Frequently Asked Questions (FAQs)
1. What is the value of solar panels for home value?
Solar panels can add $15,000 – $30,000 in value depending on the area and size of the system.
2. Do solar panels increase home value in any area?
Yes, but a home in an area with truly expensive energy or in an area with higher demand for sustainable homes (California, Hawaii, etc) may see a higher increase in home value.
3. What is the potential value solar panels will add to your house in 2025?
Generally in 2025 you will see solar panels add around 4-5% value depending on system size and energy costs in your area.
4. Do homes with solar panels sell faster than homes without solar?
Yes. Generally homes with solar will sell faster because new owners receive the benefit of energy savings and they eco-friendly aspects of the home.
5. Will a buyer think it’s worth it to install solar panels to increase the value of their new home?
Generally yes. Solar panels are a way to increase home value and yield a good ROI, especially in high value markets.
Is Solar Worth It for Home Value?
In closing, we can confidently respond to the question do solar panels increase home value? Yes!!! although the actual value depends on several factors, solar panel system can add real value to your home, save you money on your energy bills and also make your home more appealing to prospective buyers. If you are thinking about putting solar panels on your home, remember the substantial amount of money you may save long-term, as well as the environmental benefits of solar!