Solar panels have become a popular home upgrade, promising lower energy bills and a reduced carbon footprint. But beyond these benefits, many homeowners wonder: Do solar panels increase home resale value? The answer is generally yes, but the extent of that impact varies widely across the United States due to differences in energy costs, solar incentives, and local housing markets. In this blog, we’ll explore how solar panels affect home resale value with a state-by-state analysis, backed by data and trends.
The Big Picture: Solar Panels and Home Value
Studies consistently show that solar panels boost resale value. A 2019 report from Zillow found that homes with solar panels sell for 4.1% more on average—translating to about $9,300 for a median-priced U.S. home (around $226,000 at the time). The Lawrence Berkeley National Laboratory (Berkeley Lab) has also tracked this trend, estimating that solar systems add roughly $15,000 to resale value nationwide, or about $4,000 per kilowatt of installed capacity.
However, these are national averages. The real impact depends on where you live. Factors like electricity rates, solar adoption rates, state incentives, and buyer preferences all play a role. Let’s dive into how this shakes out across different states.
State-by-State Analysis
- California
- Impact: High
- Why: California leads the U.S. in solar installations, with high electricity rates (around 30 cents/kWh) and strong net metering policies (despite NEM 3.0 changes in 2023). Berkeley Lab data shows solar homes here fetch premiums of $15,000–$20,000.
- Key Factor: Buyers expect energy savings in a state with pricey grid power and a solar-friendly culture. New homes must even include solar as of 2020.
- Texas
- Impact: Moderate
- Why: Texas has low electricity rates (around 14 cents/kWh) and no statewide net metering, but abundant sunshine and deregulated energy markets boost solar appeal. Homes with solar may see a 2–3% value bump ($5,000–$10,000 for a $300,000 home).
- Key Factor: Savings are less dramatic, but eco-conscious buyers and off-grid appeal in rural areas add value.
- Florida
- Impact: Moderate to High
- Why: With ample sunlight and rising utility rates (around 15 cents/kWh), solar is gaining traction. However, limited net metering and hurricane risks temper enthusiasm. Premiums range from $10,000–$15,000.
- Key Factor: Resilience during outages (with batteries) is a selling point in this storm-prone state.
- New York
- Impact: High
- Why: High electricity costs (20–25 cents/kWh) and generous incentives (e.g., NY-Sun program) make solar a smart investment. Resale premiums often exceed $15,000, per Berkeley Lab.
- Key Factor: Urban and suburban buyers value sustainability, and state policies amplify returns.
- Arizona
- Impact: Moderate
- Why: Arizona’s solar potential is top-tier, but low electricity rates (13–15 cents/kWh) and utility pushback on net metering reduce savings. Premiums hover around $10,000–$12,000.
- Key Factor: Widespread solar adoption normalizes panels, slightly diluting their “wow” factor.
- Colorado
- Impact: High
- Why: Moderate rates (14 cents/kWh), strong solar incentives, and a green-minded population drive premiums of $12,000–$18,000.
- Key Factor: Outdoor enthusiasts and eco-conscious buyers see solar as a lifestyle fit.
- Ohio
- Impact: Low to Moderate
- Why: Lower electricity costs (13 cents/kWh) and less solar penetration limit value boosts to 1–2% ($3,000–$6,000 for a $250,000 home).
- Key Factor: Cloudy weather and weaker incentives make solar less of a standout feature.
- Massachusetts
- Impact: Very High
- Why: Sky-high electricity rates (25–30 cents/kWh) and robust incentives (e.g., SMART program) push premiums to $15,000–$20,000 or more.
- Key Factor: Progressive energy policies and cold winters make solar savings a big draw.
What Drives the Variation?
Several factors explain why solar’s impact on resale value differs by state:
- Electricity Rates: Higher rates (e.g., CA, MA, NY) mean bigger savings, making solar more attractive to buyers.
- Incentives: States with tax credits, rebates, or strong net metering (e.g., CO, NY) amplify solar’s financial appeal.
- Solar Penetration: In solar-heavy states like California or Arizona, panels are expected, so the premium may plateau. In less-solar states like Ohio, they’re a novelty but less understood.
- Buyer Demographics: Eco-conscious or tech-savvy buyers (common in CO, MA) value solar more than traditional buyers.
- Climate: Sunnier states (e.g., AZ, FL) generate more energy, but savings matter less if grid power is cheap.
Owned vs. Leased Solar: A Caveat
One critical detail: The resale boost typically applies to owned solar systems. Leased panels—where a third party owns the system and you pay a monthly fee—can complicate sales. Buyers may hesitate to take on lease payments, sometimes lowering offers or even offsetting the value gain. A 2021 Berkeley Lab study noted leased systems add little to no premium in many markets. If you’re planning to sell, owning your panels outright (via cash or loan) maximizes resale benefits.
Beyond the Numbers: Intangible Benefits
Solar panels don’t just add dollars—they can make your home stand out. Homes with solar often sell faster (Zillow reported 20% quicker sales in some markets) because they signal modernity, sustainability, and lower utility bills. In competitive markets like California or Colorado, this edge can tip the scales.
Final Thoughts
Solar panels generally increase home resale value, but the payoff varies by state. In high-cost, solar-friendly states like California, New York, and Massachusetts, you could see premiums of $15,000 or more—often recouping much of your installation cost (typically $20,000–$30,000 before incentives). In states with cheaper power or weaker policies, like Texas or Ohio, the boost is smaller but still positive.
Before installing solar with resale in mind, research your state’s electricity rates, incentives, and buyer trends. A local real estate agent or solar installer can also provide insight into how panels play in your market. With the right conditions, solar isn’t just a green choice—it’s a smart investment that pays off when you hand over the keys.
