Do Solar Panels Increase Home Value?
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Solar panels can increase a home’s value by about 4% on average — or $20 for every dollar that solar decreases your annual utility bills — provided you own the solar panels or shingles. For a median-value home, solar panels can add over $9,000 to the home’s overall price .
Do solar panels make my house worth more?
As long as you’ve purchased (rather than leased) solar panels or shingles, going solar can add to the value of your house. Where you live has a significant impact on what your home-value increase will be, however. Homes in states with bigger solar incentives and bigger solar markets may see bigger price differences. Some of these states include:
Florida.
North Carolina.
Arizona.
Nevada.
Georgia.
New Jersey.
Virginia.
New York .
Do solar panels make it harder to sell your house?
Purchasing solar panels or shingles shouldn’t make it harder to sell your house, because they tend to increase a home’s value by making it greener and lowering electric bills. If you opt for a solar lease, however — which means you’re renting the solar panels with a long-term lease rather than buying them — it may be harder to sell your home.
Potential buyers may not want to assume the lease agreement and ongoing payment obligations in addition to a mortgage. This is why if you plan on selling your home, it may make more sense to purchase rather than lease a solar array.
Factors that affect how much value solar adds to your home
Adding solar panels doesn’t increase everyone’s home value by the same amount. Other factors influence how much your home’s value might rise, such as:
Age of your solar system. If your panels or shingles are nearing the end of their productive years, your home value won’t rise as much with a system that's fairly new (less than 10-15 years old).
Condition of your solar system. If you’ve properly maintained your system, you’ll likely see a larger increase in home value than if the panels are unmaintained, worn or damaged.
Ownership of panels. Typically, you need to own the solar panels to see an increase in property value. Leasing solar panels often doesn’t add to a home’s value, because potential buyers may hesitate to assume responsibility for your lease agreement.
Solar market. Homeowners in states with growing solar markets, solar-friendly laws and local incentives may expect relatively large increases in property values.
Local electric rates. Solar homes in states with higher costs for grid electricity may get a bigger premium.
» MORE: How long do solar panels last?
How much does solar cost?
The cost of purchasing a solar system varies due to several factors, including:
System size. Larger systems typically cost more.
How much electricity your home needs. The more electricity you need, the more solar panels you’ll have to purchase.
Location. Not all geographical locations receive the same amount of sunlight — and less sunlight means less power generation per panel. This means that people in low-sunlight homes may need to purchase larger systems to generate the same amount of electricity.
Type of solar equipment. Many different types of panels, inverters and mounting systems are available, and costs vary depending on the type of equipment and brand you choose.
Home and roof. Home and roof designs can affect the labor needed for solar installation.
» MORE: Do solar panels work at night?
That said, the cost of purchasing and installing an entire solar system, before tax incentives or rebates, ranges from about $26,000 and $34,000. The national average is around $30,000, according to data from EnergySage, a solar and home energy product comparison marketplace founded in 2012.
Can I get financing for a solar panel system?
In addition to tax incentives and rebates, there are options available. Many solar installers offer financing, but you may also be able to finance your solar investment through a home equity loan or home equity line of credit (HELOC). These options may have lower interest rates than financing with an installer, future opportunities for refinancing and possible tax benefits.
Home equity loans and HELOCs are ways to borrow against the value of your home, converting equity into cash. With a home equity loan, you receive a lump-sum payment and then pay it back at a fixed interest rate over an agreed period of time, typically from five to 30 years. HELOCs are more akin to a credit card, something you use as needed. You’ll usually have 10 years to draw from the line of credit, during which time you only have to pay interest, and after that you pay both the principal and interest. HELOC interest rates typically are variable, meaning your monthly payment could rise or fall over time. And with each of these options, you're using your home as collateral.
 Quicken Loans: NMLS#3030 | ||
|---|---|---|
Max LTV85% | Max LTV90% | Max LTV90% |
Min. Credit Score640 | Min. Credit Score640 | Min. Credit Score680 |
National / regionalNational | National / regionalNational | National / regionalNational |
Another option is a solar loan. Many banks, credit unions and online lenders offer these to fund solar panels and installation, with amounts typically from $1,000 to $100,000, and annual percentage rates ranging from 6% to 36%. They function like a personal loan: you receive a lump sum and repay it in equal monthly installments over a set period, typically two to seven years. And unlike with home equity financing, there is no collateral required for a solar loan. This means your home or solar panels aren’t at risk if you miss payments, but you may have to pay late fees.
So, yes, you likely can get financing. If you go this route, compare interest rates, terms and fees with any financing package that a solar provider may offer you to ensure you get the best deal.
