Solar increases property value graphic EnergySage

New report says solar panels increase home value

Reading Time: 3 minutesInstalling solar panels can significantly increase your property’s value, according to a new study from the Lawrence Berkeley National Lab (LBL). The report, titled “Selling into the sun: Price premium analysis of a multi-state dataset of solar homes“, builds on previous research which concluded that homes with solar panels in California sold for more than those without.

Do solar panels add value to a house?

In addition to California, the new study investigates home pricing trends Connecticut, Florida, Massachusetts, Maryland, North Carolina, New York and Pennsylvania by analyzing the sales of over 20,000 homes in these states. LBL’s analysis of the housing markets in these other states shows that the premium paid for homes with solar is not a phenomenon isolated to the Golden State. The clear takeaway: solar panels really do add value to a home. If you are thinking about purchasing a solar system for your home, the study’s conclusions should give you a boost of confidence that you are making a smart investment. LBL finds that homes with solar panels will benefit from a ‘solar premium’ when they are sold because buyers are willing to pay more for a home with solar panels. solar and home value graphic

How much does solar power increase home value?

Example: a 5 kilowatt (kW) solar system (the national average) will offer 5,000 watts of power. LBL says that each watt of solar adds about $4 to a home’s value in California and about $3 per watt elsewhere. Thus, a home with solar should sell for about ($4 x 5,000W =) $20,000 more in CA or still ($3 x 5,000W =) $15,000 more outside of CA. Specifically in this state analysis, prospective buyers wondering if solar panels increase home value were pleasantly surprised.  What is surprising about these figures is that they are very close to what you would pay for a brand new solar system today. Our own analysis of prices for 6kW solar systems in California reveals that some of the more expensive systems cost just over $4/W. And bear in mind that these prices are what you would pay before you take into account the generous 30% Federal tax incentive that is available.

Low-cost solar power in California is your best investment

The report notes that the difference between the solar premium for solar panels in California as opposed to the non-Californian states is “not statistically significant”: The lower premiums may be due to “lower net costs and income estimates” in the other states. In essence, the premiums in non-Californian states may have to do with lower solar installation prices and electricity rates rather than because solar has a lower valuation there. All of this suggests that if you sell your house soon after you have solar system installed, you will recoup most or all of your investment, even as you save money on your power bills. It also confirms what we’ve said before: Payback periods on solar power systems are not something to be overly concerned about. Your solar system will either increase your home value significantly should you decide to sell your house, or it will pay itself off in power bill savings before you move out. In both cases, solar is a sound investment. Other interesting points from the report include:
  • The solar premium for newly-built homes was slightly lower than for older homes, indicating that retrofit solar installations are valued the same as systems which are built into the home.
  • The $/W solar premium was smaller in homes with larger systems, indicating that there may be a ‘green cache’ effect. As the report says, “Buyers might be willing to pay a certain amount for having any size of PV system on their homes and then some increment more depending on the size of the system”.
  • The authors recommend that homes that went solar through solar leases or PPA programs should be an area of future research; the current study examines only homes with owner-owned systems.
solar and home value graphic

28 thoughts on “New report says solar panels increase home value

  1. Doris Recchion

    I am a Realtor in NJ and just had a deal fall appart because the appraiser added 15,000 in value when it cost 42,000. the Government mortgage program did not allow that added $15K the appraiser added.
    The Govt pushed these Solar panel installation and now they are penalysing the consumer.

  2. Sam

    Teresa Street, can you give us an update to the sale of your house? We’re they correct or did the value of your house increased?

  3. Alex Barriga

    SO IFYOU HAVE THE SAME HOUSE ON THE MARKET AND ONE HOUSE HAS 1000 dollar utility every month and the same house next door has a 200 dollar utility bill I think I will take the 200 dollar solar utility bill Thank you very much lol

  4. Don

    Teresa they are lying to you! Hopefully you didn’t lease the solar that’s ALWAYS a huge mistake. Who in the world would say no value added to a home when the new people buy the house have a ZERO ELECTRIC BILL.

  5. Teresa Street

    I had solar panels installed in 2011 – love them. But am now putting my house on the market. The realtor and appraiser have both said there is NO added value to the price of the house for the system. Frustrating.

  6. Max Boot

    You were nice Tom is ill informed. I have had half the energy bill of my neighbors for 5 years. I use more KW and just last week my neighbor told me He was going Solar. The only reason not to go solar is if you rent. Because then you cannot. Plus if your a climate change dis-believer in 2018 you’ll believe anything..!

    Read less Tom life is LONG!!

  7. Keith R Woodard

    My HOA approved my solar panels because they knew this install would ultimately increase my property value.


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