Does Solar Increase Home Value? Yes, But It’s Not That Simple (See How Much)

Several factors determine how much your home costs after solar panel installation. Your location, state, electricity rates and more can determine whether the answer to the question, does solar increase home value, is yes, or no. 

This complete guide explains the situations and conditions that influence how much solar panels add to the value of your home, and how you can ensure that you achieve the maximum benefit.

Does Solar Increase Home Value?

Does solar increase home value? It depends.

With the increased demand for eco-friendly lifestyles and many people who want to be independent from an unreliable power grid, more homeowners are opting for effective how to become carbon neutral options.

It starts with opting out of fossil fuels for energy and embracing solar power for their daily operations.⁶

Some home site websites argue that prospective homeowners are willing to invest in clean homes. With this new trend, the company estimates that over 80% of new owners list energy efficiency as what they seek in a home.⁵

Solar-powered homes are also attractive for investors because they are confident of a high ROI, thanks to the increased demand.

Experts say panel installation can improve a home’s value by up to 4.1%, unlike homes without solar panels.

For some owners, putting up your home for sale or investing in one guarantees more value, making it a lucrative investment. Interestingly, experts also calculated how does solar increase home value based on the installation size, and the following are some rough estimates.

Installation size	Estimated home value increase
10 kW	$59,110
8 kW	$47,288
6 kW	$35,466
4 kW	$23,644

Does Solar Increase Home Value in Your State?

Every state has various energy rates and methods for obtaining that energy. For example, those living near hydro electric dams generally have lower electricity costs than people who derive grid power from natural gas or coal fired plants.

So, your location plays a role in whether the value of your house will increase with solar panels.

Considering the current high cost of living nationwide, this move is better for the environment and is one way to reduce utility bills.⁷

The best part is that panel installation can improve your home value by more than 4%, making it an excellent investment.

Some states are pushing for solar panel incentives and favorable policies to encourage homeowners to switch. The following are the top ten states with attractive solar premiums and the corresponding amounts for median-value homes.

State	Percentage increase in home value	Average price increase on the home
South Carolina	3.5%	$5,866
New York	3.6%	$10,981
Maryland	3.8%	$10,976
Hawaii	4%	$24,526
Florida	4%	$9,454
Washington	4.1%	$15,916
Louisiana	4.9%	$7,037
North Carolina	4.8%	$8,996
Pennsylvania	4.9%	$8,589
New Jersey	9.9%	$32,281

How Do Solar Panels for Home Increase Home Value?

The level of demand usually determines the market value, and it has worked so far for solar power. The more homeowners demand solar panels, the more the value of homes using solar power increases.

The eco-conscious are looking for ways to go carbon neutral while saving money in the long run, influencing the price of homes. However, it’s not always that simple because you must consider other factors like where the house is and the solar panel quality.¹

The National Renewable Energy Laboratory (NREL) states that a property gets a $20 value increase for each $1 saved on utility bills. Therefore, if you save $500 in electric bills annually using solar panels for home, your house’s value increases by $10,000.

It explains why investors are more willing to buy solar-powered properties because they are confident of a positive ROI. Homebuyers are also ready to pay over $10,000 more, provided the property has installed solar panels.

Factors Influencing How Much Does Solar Increase Home Value

The answer to the question, does solar increase home value is yes, but it isn’t that simple. Several other factors will come into play to determine whether your home’s value will increase.

Before installing the panels, you may have to consider the following.

• Local Utility Rates

Different states and cities have different utility rates; the higher it is, the more valuable solar installation will be. Cheaper and non-renewable energy will be more appreciated if it means that the user’s monthly utility bills will decrease.

The EIA (Energy Information Administration) determined that the average household spends about $117.46 monthly on electricity.⁸ If your local rate is significantly higher than this, solar panels will be worth investing in.

It applies to states like California, Texas, and New York.

• Solar Market

Some states enjoy a more lucrative solar market thanks to favorable policies and government interventions. If the laws in your region support solar conversion, your home’s value will likely increase.

Similarly, solar panels will have a higher demand in your region if more social benefits come with installation and the area has more sunlight exposure.

The top ten states with favorable incentives and laws that help improve the solar market include California, Florida, Texas, Georgia, Virginia, New Jersey, North Carolina, Massachusetts, Arizona, and Nevada.⁴

• System Condition

Home buyers also consider how long the system will be of service. Given panels’ 25-35-year lifespan, a 20-year-old system will only serve them for a decade or less, which is not an attractive investment.

Your home’s value will increase if your panels are in excellent condition and sure to serve the new owner for a long time. Old systems will not add a lot of value to a home because the owner will have to install a new one or make a solar panel roof replacement.

It explains the need for proper care, maintenance, and purchasing of high-quality, long-lasting solar systems.

• Panel Ownership

Financing is one factor many overlook when installing solar panels. If you plan to resell your home and reap the highest possible returns, you want to ensure that you legally own everything because it will be easier to change its ownership.

It is best to pay for the equipment and installation upfront or take a loan to complete everything; otherwise, other financing forms will complicate everything.

You should avoid solar leases because transferring them to someone else can take a long time, and most prospective users would opt out of such agreements.

Do Solar Panels Increase Home Value in Texas?

The high utility rate in Texas helps improve its solar market, but still, its cities are slightly lagging behind in terms of home value increase.

While others record the nationwide average of 4%, others are still reporting lower rates.

For instance, solar homes in places like Plano only reported a 1% increase.

How To Improve Your Solar Tax Investment

Installing solar panels can be an excellent investment, but only if you do it right. You want a highly efficient system to increase your home’s value significantly.

Below are ways to reduce your initial investment and increase your ROI.

• Rebates and Solar Incentives

Taking up your state’s and local solar incentives can reduce the cost of solar installation.⁹ For instance, tax credits offer reductions, which equate to about 30% of the installation costs.

You can also check your city’s laws for utility-specific rebates.

• Net Metering

Solar panels are efficient enough to produce more power than you need, and thanks to net metering, you can sell the extra to the grid in exchange for utility credits or payouts. It is attractive for prospective homeowners because the surplus energy won’t go to waste, and they can save more on utility bills.

• Batteries

If your local utility providers don’t have net metering, you can always invest in battery storage, along with charge connectors and inverters to maintain your power supply.

A fully integrated system comes in handy at night and during weather interferences, a feature many new homeowners look for in a solar setup.

Install Solar Panel Cost of Installing Solar Panels

Solar panels increasing your home’s value is attractive, but first, you must consider the installation cost.

You must factor in how many solar panels to power a house, the cost of the related equipment, the installation cost, and other charges.

Luckily, favorable policies and increased supply over the decades have reduced the cost of solar power. Generally, the system’s price depends on the type, size, quality, location, and other factors.

You can also take up incentives to help reduce the total installation costs.

You can also learn how to install solar panels on roof to save money you would have used for professional installation. Solar panels cost $8- $10 per square foot or over $16,000 without rebates.²

What Is Solar Panel Maintenance Cost?

An upside for solar panels is that they don’t need a lot of maintenance, except regular cleaning to remove dirt and debris that cause clouding. Professional cleaning costs around $150-$330; you can contact cleaners only if needed.

Otherwise, if you are leasing the panels or want to maintain the warranty, you may have to know how to clean solar panels; you can check your lease’s fine print for whether it is a requirement.

Are Solar Panels Worth It For Your Home?

One of the first questions first-time installers ask is why are solar panels so expensive?

Understandably, you must buy all the necessary equipment and pay for professional installation.

It makes you wonder whether they are worth investing in.¹⁰

To know if you are making the right decision, consider your monthly utility costs, how much sunlight your area receives, and if there are incentives. If your electricity rate is too high, installing panels will save you more money in the long run.

It will also be a worthy investment if your region receives a lot of sunlight, meaning the panels will always work optimally. Besides, solar installation will be cheaper if financial incentives are available.³

Are Solar Neighborhoods Worth the Investment?

Solar neighborhoods are worth investing in for homeowners and business people. Since the market is gradually going green, everybody wants to turn to cleaner energy, and solar power has proven  to provide that.

The best way to get involved is by buying already-installed solar panels, because the new homeowners will save on installation costs and subsequent utility bills. As long as their demand is high, they will always be more valuable than other homes.

Everybody now knows the upsides of investing in solar power. As a homeowner with plans to resell, this may be a perfect way to boost your house’s value by up to 4%.

If buyers want to invest in homes with sustainable energy, yours will top their list.

However, keep in mind that solar panel installation doesn’t always mean an increase in home value because you must consider your location, the solar market in your area, and the state of your setup.

If you are still uncertain and questioning how does solar increase home value, speak with other people in your neighborhood who have made the switch.

Frequently Asked Questions About Does Solar Increase Your Home Value?