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Independent U.S. Solar Guidance

Section: Costs & Savings

Does Solar Increase Home Value? What the Research and Resale Market Actually Show

By ClearWatt Editorial Team · Published October 1, 2026

A rubber-banded stack of twenty-dollar bills on a plain surface, representing upfront investment cost
Photo: 401(K) 2012 / Wikimedia Commons (CC BY-SA 2.0)

Short answer: Owned solar panels generally add some resale value, mainly in markets with high electricity prices and buyer familiarity with solar, but the effect is inconsistent and depends on how the system is financed. Leased or PPA-financed systems typically add little to no appraised value and can even slow a sale, since the buyer has to qualify for or assume the contract.

Why the answer isn’t a single number

There’s no single, nationally reliable dollar figure for “how much solar adds to a home.” Home values are set locally, by comparable sales, buyer demand, and lender appraisal practices, and solar is one input among many. Research institutions including the U.S. Department of Energy’s national labs have studied the question for years, and the general finding is that owned systems tend to correlate with somewhat higher sale prices in many markets, while the effect shrinks or disappears for leased systems. The U.S. Energy Information Administration tracks the electricity price differences across states that largely explain why solar is worth more to buyers in some places than others — a homeowner in a state with high retail electricity rates has more to gain from an existing paid-off system than one in a state where power is comparatively cheap (EIA).

What is consistent across sources is this: ownership structure matters more than almost anything else, and the math changed in 2026 now that the federal tax credit that used to subsidize new installations is gone.

Owned vs. financed vs. leased: why the structure changes everything

A solar array only becomes part of “the house” in the eyes of a buyer, an appraiser, and often a lender, if it’s owned outright or financed through a loan that’s paid off or rolled into the sale. A system still under a lease or power purchase agreement (PPA) is a different animal: the homeowner doesn’t actually own the equipment, so it functions more like a long-term service contract attached to the property than a home improvement.

That distinction drives very different outcomes at resale:

Ownership type Effect on appraised value Effect on sale process
Paid in cash Can be counted as a home improvement; appraiser may add value using cost or income approach Straightforward — nothing to transfer or assume
Paid off solar loan Same as cash-purchased once the loan is satisfied Straightforward if loan is paid off before or at closing
Active solar loan (unpaid) Value depends on whether the loan is secured against the home (a lien) or unsecured Lien must be resolved at closing like any other debt
Lease or PPA Typically little to no appraised value increase; sometimes treated as neutral or even a negative Buyer usually must qualify to assume the contract, or seller must buy it out; can slow closings

For a deeper look at what happens specifically when a lease or PPA is attached to the home at sale time, see Selling a House With Leased Solar Panels: What to Expect. The general pattern documented in financing comparisons is that leases and PPAs transfer financial risk and paperwork to the buyer in a way that loans and cash purchases don’t (EnergySage, Solar Leases vs. PPAs).

What changed with the 2026 tax credit expiration

Through 2025, the 30% federal residential solar tax credit under Section 25D of the tax code let homeowners who bought (not leased) a system deduct nearly a third of the cost from their federal tax bill. That credit was repealed with no phase-down by the One Big Beautiful Bill Act, H.R. 1, signed July 4, 2025, for systems placed in service after December 31, 2025 (Congress.gov, H.R. 1; IRS, Residential Clean Energy Credit).

This matters for home value in two ways. First, if you already own a system installed and placed in service before the end of 2025, you likely already claimed the credit — it doesn’t get clawed back, and the system’s resale value isn’t affected by the law change. Second, and more relevant going forward, buyers evaluating a home with solar in 2026 and beyond can no longer assume they’d get a 30% discount if they installed their own system instead. That can make an existing, already-depreciated solar installation on a home for sale relatively more attractive by comparison, since the buyer is getting the hardware without having to pay full price and without the credit being available as an offset. For a broader look at how the math shifted this year, see Is Solar Still Worth It in 2026? (After the Federal Tax Credit Ended). Note that third-party-owned systems (leases and PPAs) were never eligible for the 25D homeowner credit in the first place; those arrangements instead rely on a separate commercial credit under Section 48E, which goes to the system owner — typically the leasing company — and isn’t guaranteed to be passed through to the homeowner’s benefit at all, let alone at resale.

Local factors that swing the number up or down

Several local variables affect whether solar helps, hurts, or does nothing to a home’s value:

A worked example: thinking through the math yourself

Because there’s no reliable universal percentage to apply, it’s more useful to estimate the value an owned system adds to your specific home using your own numbers, the same way you’d estimate payback period. A simplified version of the approach some appraisers use (an income-based method, treating future utility bill savings like a stream of income the home will generate) looks like this:

Step Example input Example result
Estimated annual electricity bill savings from the system $900/year —
Remaining useful life of the system (panels are commonly warrantied 25 years) 18 years remaining —
Rough total future savings (undiscounted, for illustration only) $900 × 18 $16,200
Adjustment for system age, future buyer’s usage, and local market appetite Buyer and appraiser discretion Wide range, often well below the raw total

This is illustrative, not a formula an appraiser will apply exactly — real appraisals also weigh comparable sales, system age and remaining warranty, and condition. The point is that the “value” a system adds is tied to real, locally verifiable savings, not a flat percentage of the home’s price. Current national system cost data, useful for estimating what a buyer would pay to install the same size system themselves, is tracked by EnergySage based on actual installer quotes (EnergySage, Solar Panel Cost).

What to check before you sell or buy a home with solar

If you’re selling a home with an owned system, gather the original invoice, any warranty documents, production history from your monitoring app, and proof that any loan tied to the system is satisfied or can be. If the system is leased or under a PPA, get the transfer or buyout terms in writing well before listing the home. If you’re buying a home with solar already installed, ask directly whether it’s owned or leased, request the interconnection and net metering agreement, and verify with the utility that the system is actually registered and generating credits as described. The Federal Trade Commission’s consumer guidance on solar is a useful baseline for the kinds of questions and documentation a reasonable buyer or seller should expect (FTC, Solar Power for Your Home).

This article is for general information and isn’t tax, legal, or appraisal advice for your specific situation.

Sources

Frequently asked questions

Does solar increase home value in every state?

Not uniformly. The effect depends on local electricity prices, whether buyers in your market expect solar, net metering rules, and how your state treats solar for property tax purposes. Check dsireusa.org for your state's specific property tax and incentive treatment before assuming a national average applies to your home.

Does a leased solar system still add value when I sell?

Usually less, and sometimes it complicates the sale rather than helping it. Buyers often have to qualify to take over the lease or power purchase agreement, and some lenders are wary of homes with transferable solar contracts attached to the title. Owned systems paid off in cash or through a loan tend to translate into resale value more directly than leased ones.

Will homes without the 30% tax credit still sell for more if they have solar?

The federal residential credit under Section 25D expired for systems placed in service after December 31, 2025, following the One Big Beautiful Bill Act. That doesn't erase the value of an existing paid-off system, but it does mean future buyers can no longer claim that credit themselves if they were counting on it as part of the home's value proposition.

Do appraisers actually account for solar panels on a home?

Appraisal practice has improved but is still inconsistent. Many appraisers use an income or cost approach to value owned solar arrays, but methodology varies by appraiser and lender. Leased systems are typically treated as a personal property feature rather than real property, which is one reason they often don't move the appraised value much.

Written by

ClearWatt Editorial Team

The ClearWatt Editorial Team researches and writes every guide on this site. We work from primary sources — federal and state agencies (EIA, NREL, DSIRE, IRS), legislative text, utility rate schedules, and manufacturer documentation — rather than summarizing other websites' coverage of the same topic. We are not licensed solar installers, financial advisors, or tax preparers, and nothing published here is a substitute for advice from one. When a figure can't be traced to a specific, current source, we say so and give a range instead of a false-precision number. Articles are dated, and we correct confirmed errors promptly. See our Editorial Policy for the full standard every guide is held to, and About & Methodology for the sources we draw from.