How Solar Panels Impact Home Value in 2025

When James and Lila decided to sell their home in San Diego last year, they didn’t expect their solar panels to be such a powerful bargaining chip. The system, which they had installed five years earlier, not only helped them save on energy bills but also increased their home’s resale value by nearly $50,000. In a competitive housing market, that boost made all the difference. Like many homeowners today, they discovered that solar isn’t just about clean energy—it’s also about smart financial planning.

In 2025, solar panels continue to reshape how we view energy, sustainability, and homeownership. One often overlooked but incredibly valuable benefit is how they impact home value. With more homebuyers prioritizing energy efficiency and rising utility costs, solar-equipped homes have become hot commodities. This article explores how solar panels influence resale value, the differences between owned and leased systems, and how you can make the most of this investment.

Real Market Data: Solar’s Effect on Home Value

For years, solar companies and real estate professionals leaned on Zillow’s 2019 study that showed homes with solar sold for 4.1% more than their non-solar counterparts. But in 2025, we have fresher and more robust data, especially from California, where solar adoption is widespread.

A recent study examined 5,000 homes sold between 2020 and 2023, comparing properties with owned solar systems, leased systems, and no solar at all. The findings? Homes with owned solar panels sold for 5–10% more on average than similar homes without solar. That means a $750,000 home could easily sell for $37,500–$75,000 more just because of its solar setup.

Meanwhile, homes with leased systems didn’t show a price increase at all. In some cases, buyers even negotiated lower prices to offset the inconvenience of assuming a lease.

Supporting this trend, another nationwide analysis from Solar Reviews in mid-2024 showed similar results: across 400+ homes in various states, those with solar sold for 6.8% more on average. The conclusion is clear—solar panels increase home value, especially when the system is owned outright.

Why Solar Adds Value: Key Drivers

You may be wondering why a simple set of rooftop panels can add tens of thousands of dollars to your property’s worth. The answer lies in a combination of economics, psychology, and practicality.

Financial Benefits Buyers Recognize

Buyers aren’t just purchasing a house—they’re investing in their future. A home with solar panels comes with the promise of decades of energy savings, making it an attractive prospect. Most buyers understand that they’ll save hundreds or even thousands per year on electricity costs, without any upfront expense on their end.

Energy Independence and Peace of Mind

In regions where utility prices are volatile or grid outages are common, solar panels offer energy stability. Homeowners with battery-backed systems know they can keep the lights on even when the grid goes down. This sense of control and preparedness resonates with today’s buyers more than ever.

Long-Term Quality and Sustainability

A solar system suggests that the home has been improved with future-minded upgrades. It’s not just a renovation; it’s a signal that the owners cared about the home’s environmental impact and functionality. As awareness of climate issues grows, more buyers are seeking homes with green credentials.

The Downside of Leased Solar: A Caution for Sellers

While solar can boost value, it’s important to understand that not all solar setups are viewed equally in the eyes of buyers or appraisers.

The Pitfalls of Third-Party Ownership

Leased solar systems, or those under Power Purchase Agreements (PPAs), often fail to increase a home’s sale price. Why? Because the homeowner doesn’t own the system. It’s more like renting rooftop real estate. The lack of asset ownership means there’s no tangible improvement to factor into the home’s equity.

Buyers may also see these contracts as burdens rather than benefits. Lease agreements can be complicated, involve escalating payments, and typically do not transfer smoothly to new owners. That added complexity can lead to hesitation, renegotiation, or even dropped deals.

Missed Incentives and Unclear Savings

Another drawback is that tax incentives and solar rebates usually go to the third-party owner, not the homeowner. Buyers lose out on these perks, which can further reduce the perceived value of the system.

If you’re considering going solar and want to boost your home value, buying your system outright—or financing it to own—makes a huge difference.

Actionable Tips for Homeowners with Solar

Whether you already have a system or are thinking about installing one, there are ways to maximize your investment and ensure it pays off when it’s time to sell.

Prepare for a Solar-Powered Sale

When listing your home, make sure your real estate agent is aware of your solar system’s specifications. Highlight the panel brand, system size, installation date, and any warranties. Be ready to provide recent electric bills to demonstrate the savings potential.

If possible, include your solar system in the Multiple Listing Service (MLS) listing and marketing materials. Transparency helps buyers feel confident about the value they’re getting.

Get a Solar Appraisal

Not all appraisers are familiar with how to value solar properly. Work with professionals who specialize in solar home appraisals. A qualified appraiser can assess your system’s worth based on age, performance, and savings, and that figure can help you justify your asking price.

Make It a Conversation

When showing your home, talk to potential buyers about the benefits you’ve experienced—low electricity bills, peace of mind during outages, or satisfaction in lowering your carbon footprint. Stories sell, and your experience may be the extra nudge a buyer needs to make an offer.

Invest Wisely for ROI

If you’re planning a new installation, go for high-quality panels with strong warranties (25 years or more). Battery storage is also worth considering, as it boosts both energy independence and perceived value. Keep in mind that the average cost of a 7.4 kW system is about $22,000—but in many markets, that translates to a resale value increase greater than the installation cost.

FAQs – Solar Panels and Home Value in 2025

Do solar panels always increase home value?

Only owned solar systems have been consistently shown to increase home value. Leased systems often don’t contribute and can even complicate a sale.

How much more can I sell my house for with solar?

In 2025, studies show homes with solar can sell for 5% to 10% more, depending on location, system age, and buyer demand.

Are solar panels still worth it this year?

Yes. With energy prices rising and tax incentives still available for new systems, solar remains a smart investment for both savings and resale value.

Can I transfer a solar lease to the new buyer?

You can, but it may require credit checks and approval from the leasing company. This process can deter buyers or slow down the sale.

Is solar better than other home upgrades for ROI?

Often, yes. Solar can outperform other upgrades like kitchen remodels or bathroom renovations in terms of return on investment, especially when energy savings are factored in.

Conclusion – A Smart, Sustainable Choice

In 2025, solar panels do more than reduce your electric bill—they increase your home’s equity, make it more attractive to modern buyers, and future-proof your investment. But the key is ownership. Owned systems offer the clearest path to higher resale value, while leased systems may create unnecessary hurdles.

As buyers continue to prioritize sustainability, energy efficiency, and financial stability, solar-equipped homes stand out. Whether you’re planning to move soon or stay for decades, adding solar can be one of the smartest decisions you make for your home—and your wallet.

If you’re considering solar, now is the time. Not only will you enjoy immediate energy savings, but you’ll also be building value that stays with your home for years to come.