Solar panels are becoming a popular option for homeowners across the country, but the general question is whether solar will increase home value?
In short, yes – giving sunlight to your home can add value. In fact, homes with solar panels typically increase their value by up to 6.9%. This depends on several factors, including local electricity rates and state policies, the age and efficiency of the system, the demand for sustainable homes in your area, whether owned or rented.
This Redfin article discusses the value, advantages and disadvantages, and important factors that affect typical installation costs. Whether you are a homeowner in Washington, DC, Chicago, Illinois, you can make an informed decision about adding sunlight to your home.
Do solar panels increase the value of your home?
Yes, solar panels increase the value of your home. Research shows that not only does houses with solar panels have an increased value, they also tend to sell about 6.9% more than comparable homes without solar. That said, the actual increase in dollars will vary, as the percentage is based on the value of the home. 6.9% of a $500,000 home is around $34,500, while the same percentage of a $900,000 home approaches $62,100.
That said, the return on investment (ROI) from solar panels may vary based on several important factors.
Which factors affect how valuable solar panels are in your home?
Local Electricity Prices: If you’re not used to how solar panels work, you might think that getting enough sun is all you need. However, state policies and electricity bills play a bigger role, and how much sunlight pays really depends on where you live. Here are 10 best states for home solar. Here you are most likely to get the best profit from your investment. System Age and Efficiency: A newer, more efficient solar system is of greater value than older or less efficient panels. Ownership: Ownership systems generally increase household value. The buyer will take over the paid assets entirely. A leased system or power purchase agreement (PPA) can complicate sales or reduce premiums as the new owner inherits the contract. Market Demand: The popularity of a sustainable home in your area can affect the value that solar panels add.
>>Read: How do solar panels work? What homeowners need to know
Do I need to install solar panels?
Whether solar panels are worth the investment depends on your location, budget, local electricity bills, and state policy. Talking to a professional solar installer is a smart first step to explore your options and find the best one for your home.
The advantages and disadvantages of the installation of the sun:
Pros Cons has increased the value of homes. Houses with solar panels are usually sold more. High Costs – Solar Panel Installation is expensive depending on where you live. Low Energy Invoices – Solar Panels can significantly reduce or even eliminate electricity bills. Savings depends on your location – financial profits depend on your state. Government Incentives and Tax Credits – Many areas offer rebates or tax credits that help reduce the initial costs of installing the solar. Not all homeowners qualify – eligibility depends on location, income and property type. Environmentally friendly – Solar energy is clean and renewable. Aesthetic concerns – Solar panel designs can appear out of place, especially in HOAs and historical areas.
How much does it cost to install the panel?
So, how much will solar panels cost in 2025? Please be honest. I know that solar panel installations aren’t cheap, but the good news is that prices have dropped significantly over the years. In fact, the cost of installing residential solar systems has dropped nearly $15,000 over the past 20 years. In 2025, the average cost of installing a home solar system in the US is around $29,360 before the incentive.
Fortunately, most homeowners can qualify for a federal residential clean energy credit. This will save you 30% on costs and average around $20,552. In addition, state and local incentives may be available. This will allow you to further reduce the price.
Below are other factors that could affect how much you actually pay for your solar panels.
System Size: Large systems have a higher price tag but generate more power. This can lead to huge savings over time. Panel Quality: More efficient panels usually cost more, but they take up less space and can last longer. Battery Storage: Adding batteries for backup or energy storage can increase your total by over $10,000. Payment Method: Paying in cash tends to be the most cost-effective option. Loan funding will broaden payments, but in the long run it can increase overall costs by 47%.
How can I fund solar panels?
Paying in cash is the simplest option, providing you with the best long-term savings as there are no interest rates or loan materials. However, if that is not feasible, there are several ways to fund solar panels, depending on your budget and goals.
Personal Loans: Usually a flexible, unsecured option that can be obtained quickly, but may come with a higher interest rate. Home Equity Loans or HELOCs: You can often borrow against the value of your home, with interest rates and potential tax benefits. FHA 203(k) Loan: When you buy or refinance your home, you can include the cost of your solar power plant in your mortgage. Contractor Financing: Many solar installers offer conveniently, but conditions can be less competitive. Be sure to compare options.
Each funding route has its advantages and disadvantages, so choose the one that best suits your financial situation and long-term goals.
Is solar panels the right choice for you?
Although exact revenues vary by location, budget, local electricity bills and state policies, solar panels increase the value of your home. Some states offer strong incentives, higher electricity costs and policies to make solar panel installation a wise investment. Elsewhere, the impact on the financial profit and the value of your home may not be as important.
Best move? Reach out to local solar experts who will help you understand your options and see if solar is the right one for you.
FAQ: Does solar increase home value?
Do solar panels increase the value of your home?
Yes, homes with solar panels tend to sell for more, especially in states with strong solar incentives and high power prices. However, actual value added depends on factors such as the age of the system, efficiency, and regional market demand.
How much value can solar panels add to your home?
On average, a home with solar panels can sell about 4-7% more than similar homes without them. That can mean tens of thousands of dollars depending on your location and the size of your system.
Is there a place where solar doesn’t add much value?
yes. In states with low power rates, low incentives, or low demand for solar homes, the increase in housing value can be small. It is always best to check with your local solar installer or real estate agent.
>> Discovery: Sell a house with solar panels: Does it destroy the sale or will it destroy?
Does solar panels make it difficult to sell your home?
No, solar panels generally don’t make selling your home difficult. In fact, they are selling points for many buyers. Not only does it require minimal maintenance, it can also reduce or eliminate monthly utility bills, increase the value of your home’s resale, and qualify for valuable tax credits and rebates.
Will solar panels save you money?
Solar panels usually pay themselves in about 6-10 years, but the timeline may vary depending on factors such as location, energy usage, system size, and more. Although installations can be expensive, they can reach $40,000 on a large setup, but savings on electricity bills along with tax credits and incentives can significantly reduce your overall costs.
To maximize your return, make sure your system is properly sized for your home and keep the panels well over time.
Are solar homes sold faster?
yes! In many cases, solar-equipped homes can be sold faster than homes without solar. Particularly when the system is owned (not leased), solar can demonstrate energy efficiency, reduced utility costs and modern infrastructure. In fact, the National Renewable Energy Laboratory reports that homes with solar panels are selling 20% faster than comparable homes without them.
Is solar in your home a good investment?
That’s especially if you plan to stay home for a while. Solar advance costs can be steep, but it’s worth it with long-term savings in energy bills, tax credits and increased efficiency. Plus, it can even direct your home’s resale value to the line.
