Does Solar Increase Home Value? What the Data Shows
- Owned grid-tied solar adds an average of 3–4% to home value — about $4 per installed watt.
- Off-grid solar on remote property with no grid alternative can add significantly more — transforming an unlivable property.
- Leased solar has neutral to slightly negative impact on home value.
- The premium is strongest in high-electricity-rate states: New York, California, Connecticut.
- Solar adds value only when properly documented — keep all receipts, warranties and production data.
What the research shows
| Study | Finding | Sample size |
|---|---|---|
| Lawrence Berkeley National Lab (2015, updated 2019) | +$4/watt of installed capacity on average | 22,000+ home sales, 8 states |
| Zillow Research (2019) | +4.1% average sale price premium | National, all price points |
| National Renewable Energy Lab | Homes sell 20% faster with solar | Multiple markets |
| Fannie Mae (2016) | Issued appraisal guidance including solar as permanent improvement | Policy guidance |
Home value impact calculator
Grid-tied solar: the clear premium
Grid-tied owned solar has the most consistent and well-documented value premium. Buyers can verify production data, see reduced electricity bills and understand the technology. Key factors that maximise the premium:
- Ownership: Must be fully owned — not leased or under a PPA
- Age: Systems under 10 years show the strongest premium
- Documentation: Production data, utility bills showing savings, remaining warranties
- Location: Premium strongest in high-electricity-rate states
Off-grid solar: context dependent
Remote property with no grid alternative
A remote property transformed from "no power" to "fully livable year-round" by an off-grid solar system can see a value increase that far exceeds the system cost. The system isn't just an amenity — it's what makes the property habitable. In these cases, off-grid solar can add $20,000–$60,000+ to rural property value depending on system capability and property price.
Suburban / peri-urban with grid available
When a home is near grid infrastructure, an off-grid system creates more ambiguity for buyers. Most suburban buyers want the option to connect — they may see full off-grid as a limitation. In this context, off-grid solar adds less value than grid-tied, and some buyers may discount for unfamiliarity with off-grid system management.
Premium by state
| State | Avg electricity rate | Est. value premium |
|---|---|---|
| New York | $0.22/kWh | +5.4% |
| California | $0.28/kWh | +4.4% |
| Connecticut | $0.24/kWh | +4.2% |
| National average | $0.137/kWh | +3.5–4.1% |
| Texas | $0.155/kWh | +3.8% |
| Florida | $0.135/kWh | +3.4% |
| Louisiana | $0.098/kWh | +2.1% |
How appraisers value solar
Appraisers use three methods — the one chosen significantly affects the result:
- Income approach: Most favorable. Calculates present value of energy savings over system's remaining life. A system saving $1,800/year for 20 years at 4% discount rate = ~$24,500 present value.
- Sales comparison: Compares homes with and without solar. Works well in high-solar markets; unreliable in rural areas with few comparable sales.
- Cost approach: Values system at replacement cost minus depreciation. Often least favorable for older systems.
Frequently asked questions
Does off-grid solar increase property taxes?
In most states, solar installations are exempt from property tax reassessment. At least 36 states have solar property tax exemptions — meaning solar adds value to your home without increasing your tax bill. Arizona, Texas, Colorado and New Mexico all have strong property tax exemptions. See our state guide for details.
Should I install solar specifically to increase home value?
Not as the primary motivation. The value premium (3–4%) doesn't fully cover installation cost on its own — a $12,000 system on a $300,000 home adds about $12,000 in value, roughly break-even on value alone. The financial case for solar is built on 25-year electricity savings. The home value benefit is a genuine bonus that reduces effective system cost.