Do Solar Panels Increase Home Value? The Real Answer (2026)

"Do solar panels increase home value?" is one of the most common questions in residential solar — and the answer is frustratingly nuanced. Owned solar panels generally do increase value. Leased solar panels may decrease it. And the difference between those two scenarios can mean tens of thousands of dollars when you sell your home.

The Key Distinction: Owned vs. Leased

This is the single most important factor in determining whether solar panels help or hurt your home value. The distinction is stark enough that we need to be very clear about it upfront.

Owned Solar Panels (Purchased or Loan Paid Off)

When you own your solar panels outright — either through a cash purchase or a fully paid-off loan — the panels are an asset that transfers with the home. The new buyer gets a free source of electricity with no ongoing payments. This is unambiguously positive for home value. Research consistently shows that owned solar systems add measurable value to homes, with premiums typically ranging from 3-5% of the home's value.

Financed Solar Panels (Active Loan)

If you still have a loan balance on your solar panels, the situation is moderately positive. You own the panels, but the buyer either assumes the loan (if transferable) or you pay off the balance at closing. As long as the system is performing well and the loan terms are reasonable, this generally still adds value — though the net benefit is the value premium minus the loan payoff amount.

Leased Solar Panels or PPAs

This is where the picture changes dramatically. When you have a solar lease or power purchase agreement, you don't own the panels — the solar company does. The buyer must either agree to assume your lease (with all its terms, including potential escalator clauses), or you must buy out the lease before selling. Many buyers are unwilling to assume a 20-25 year financial obligation, which can make your home harder to sell. Full guide: Selling a home with solar panels →

Do Solar Panels Increase Home Value? What the Data Shows

Several significant research studies have examined the question of whether solar panels increase home value. Here's what the best available evidence suggests for solar panels house value in 2026.

Zillow Research: 4.1% Premium

A widely cited Zillow analysis found that homes with solar panels sold for an average of 4.1% more than comparable homes without solar. However, this research primarily examined homes with owned solar systems in markets where solar is relatively common. The premium varied significantly by location — homes in some markets saw premiums above 5%, while others saw little to no premium.

Lawrence Berkeley National Laboratory: ~$15,000 Premium

Research from Lawrence Berkeley National Laboratory (LBNL) analyzed thousands of home sales and found that homes with owned solar systems sold for approximately $15,000 more on average compared to homes without solar. The study also found that the premium was higher for newer systems and in markets with higher electricity rates.

National Association of Realtors Data

NAR surveys consistently show that buyers view solar as a desirable feature — but with important caveats. Buyer interest in solar depends heavily on whether the system is owned, the age and condition of the system, local electricity rates, and whether the buyer perceives solar as a cost-saving feature or a liability. When asked about leased systems specifically, buyer interest drops considerably.

The Important Caveats

Most of the positive research focuses on owned systems in solar-friendly markets. The data for leased systems tells a different story. Real estate professionals report that homes with solar leases often take 10-30% longer to sell and may require price concessions to attract buyers willing to assume the lease obligation.

Selling a House With Leased Solar Panels: Why It's Complicated

If you have a solar lease or PPA, understanding why selling a house with leased solar panels is complicated is essential — whether you're planning to sell now or in the future.

The Assumption Problem

When you sell a home with leased solar panels, the buyer typically must qualify for and agree to assume the lease. This means the buyer undergoes a credit check by the solar company, must agree to the remaining lease terms (which could be 15-20+ years), takes on the monthly payment obligation (potentially with annual escalator increases), and accepts the UCC lien that the solar company has on the equipment. Many buyers simply don't want this additional financial obligation, particularly when they don't fully understand the terms.

Financing Complications

Some mortgage lenders are cautious about homes with solar leases because the UCC filing can create confusion about liens on the property and monthly solar payments affect the buyer's debt-to-income ratio. If you're stuck in an unfavorable agreement, our guide on how to get out of a solar panel contract explains your options. Certain loan programs (including some FHA and VA loans) have had issues with solar leases in the past, though policies have evolved. These financing hurdles can narrow your pool of qualified buyers.

Escalator Clause Concerns

If your lease includes an annual escalator clause (common in solar leases), the buyer is assuming payments that will increase every year. A lease payment that seems reasonable today may look much less attractive when projected forward 15-20 years. Buyers who understand escalator clauses may demand a price concession to offset this risk. Understand escalator clauses →

Common Buyer Objections to Solar Panels on a House

Understanding common buyer objections to solar panels can help you address concerns proactively and protect your home's sale price. These objections are a key reason why solar panels home value varies so widely.

• "I don't want to be locked into a 20-year lease." This is the most common objection. Buyers see a long-term financial commitment they didn't choose and don't fully understand.
• "What if the panels need expensive repairs?" Even for owned systems, some buyers worry about maintenance costs and potential roof damage from panels.
• "Will the panels outlast the warranty?" Buyers may be skeptical about the value of panels nearing the end of their warranty period.
• "I don't like how they look." Aesthetic concerns are real for some buyers, particularly in upscale neighborhoods or homes with complex roof designs.
• "What if I want to re-roof?" Buyers recognize that panels must be removed and reinstalled to replace the roof underneath, which can cost $2,000-$5,000 in addition to the roofing cost.
• "The monthly payment seems high for what you get." Particularly with escalated lease payments, buyers may calculate that the solar savings don't justify the cost.

How to Maximize Value When Selling With Solar

If You Own the System

• Provide production data: Show buyers exactly how much electricity the system generates and how much money it saves. Real data is more compelling than projections.
• Highlight remaining warranty: A system with 15 years of warranty remaining is more attractive than one with 5 years left. Include warranty documentation in your listing materials.
• Get a pre-listing inspection: Have the system professionally inspected and provide the report to buyers. This addresses maintenance concerns proactively.
• Quantify the savings: Calculate the total annual savings from solar and include this in your marketing. "This home's solar system saves approximately $2,400/year in electricity costs" is a powerful selling point.
• Work with a solar-savvy agent: Choose a real estate agent who has experience selling homes with solar and can effectively communicate the value to buyers.

If You Have a Lease or PPA

• Know your transfer options: Contact your solar company well before listing to understand the lease transfer process and requirements. Learn about lease transfers →
• Get buyout pricing: Know the buyout cost so you can evaluate whether buying out the lease makes financial sense as part of the sale. How to negotiate a buyout →
• Prepare a summary for buyers: Create a clear, honest document explaining the lease terms, monthly costs, remaining term, and benefits. Transparency builds trust.
• Price accordingly: Work with your agent to factor the lease into your pricing strategy. It may be better to price slightly lower and attract more interest than to price high and have the home sit on the market.

Solar Panel Age and Degradation Impact

The age of your solar system significantly affects its contribution to home value. Understanding degradation helps set realistic expectations.

How Solar Panels Degrade

All solar panels lose efficiency over time — a process called degradation. Most panels degrade at a rate of approximately 0.5-1% per year, meaning a 10-year-old system might produce 90-95% of its original output, a 15-year-old system might produce 85-92% of its original output, and a 20-year-old system might produce 80-90% of its original output. These rates are averages — actual degradation varies by panel quality, climate, and installation conditions.

How Age Affects Value

The LBNL research found that newer systems command higher premiums than older ones. A system that's 5 years old and has 20 years of warranty remaining is significantly more valuable than a 20-year-old system approaching the end of its warranty. However, even older systems add some value as long as they're still producing meaningful electricity and have remaining warranty coverage.

The Inverter Factor

Inverters typically have shorter lifespans than panels (10-15 years for string inverters vs. 25+ years for panels). If a buyer knows they'll need to replace the inverter within a few years, this reduces the system's perceived value. If you're selling a home with an aging system, consider whether replacing the inverter before listing would be a worthwhile investment.

Solar Panel Appraisal Value: The Challenge

One of the biggest frustrations for homeowners selling with solar is the appraisal process. Determining accurate solar panel appraisal value remains inconsistent across the industry. Even when owned solar panels clearly add value, appraisers may not give appropriate credit.

Why Appraisers Struggle With Solar

Many appraisers lack specialized training in solar valuation. The traditional comparable sales approach can be difficult when there aren't enough recent sales of similar homes with similar solar systems in the same market. Additionally, the appraisal profession has been slow to adopt standardized solar valuation methodologies.

The PV Value Tool

The Appraisal Institute and Sandia National Laboratories developed the PV Value tool specifically to help appraisers determine the value of solar systems. This tool uses income approach methodology — calculating the present value of future energy savings — to estimate the system's contribution to home value. If your appraiser isn't familiar with this tool, you may want to provide information about it.

How to Help Your Appraiser

Prepare a documentation package for the appraiser that includes system specifications (size, age, panel brand, inverter type), production data (actual kWh generated per year), utility rate information (showing the value of the electricity produced), warranty documentation (showing remaining coverage), comparable sales data (if available) for homes with solar in your area, and any independent valuation or inspection reports.

When to Remove Panels Before Selling

In some situations, removing solar panels before selling may be the best option — though it should generally be a last resort due to the cost involved.

Removal May Make Sense When:

• The system is very old and underperforming — adding negligible value while potentially raising buyer concerns about roof condition
• You have a lease the buyer won't assume and the buyout cost is prohibitive — some leases allow for panel removal at the company's expense
• The panels have caused documented roof damage — removing them and repairing the roof may be necessary regardless
• The local market doesn't value solar — in some regions, solar is uncommon enough that it may not command a premium

Cost of Removal

Professional solar panel removal typically costs $2,000-$5,000 for the removal itself, plus additional costs for roof repair and restoration. If you have a lease, check your contract — some companies are responsible for removal at the end of the lease term, but mid-term removal may not be covered. Factor in both the removal cost and the potential impact on your sale price when making this decision.

Alternatives to Removal

Before committing to removal, consider whether a lease buyout might be more cost-effective, whether the solar company can facilitate a lease transfer to the buyer, whether offering a seller credit to help the buyer with the lease assumption would work, and whether a price adjustment would be cheaper than removal. Full guide: Selling home with solar →

Frequently Asked Questions