Do solar panels increase home value? What the sales studies actually measured

The evidence in one table: who counted what

The six studies below are four earlier studies reviewed in Berkeley Lab's January 2015 report, plus Berkeley Lab's two 2015 studies, and they differ more than their headlines suggest. Three are statistical analyses of many sales, called hedonic models, which estimate how much each feature of a house adds to its price while holding the others constant. Two are small case studies. One is an appraisal study in which working appraisers built matched pairs of sales by hand, the method lenders recognise. The four earlier rows are as the January 2015 report describes them.

Three features limit the evidence. Both Berkeley Lab studies looked only at owned systems; the 2015 report says plainly that it studied host-owned systems and that leased systems still needed research. The sales are old: the newest were in 2013, when systems were smaller and cost far more per watt than they do now. And California dominates, because that is where the sales were. The 2015 report found premiums about $1.10 per watt higher in California than elsewhere, $4.21 against $3.11, but the difference was not statistically significant, and it concluded that solar adds value outside California too. The honest reading is that the direction of the effect is well established and the size of it, for a house selling in 2026, is not.

Why the honest unit is dollars per watt, not a percentage

Many online answers to this question are percentages, including widely cited figures from listing sites, and the appraisal study says not to use them. We could not open a primary source for the listing-site figures, so this page prints none of them; the test below applies to any of them. The appraisal study's conclusions put it directly: price per watt is the appropriate metric for valuing a solar system, and the premium as a percentage of the sale price is an inconsistent metric that varies widely with the size of the system and the price range of the home. The arithmetic shows why. The same $15,000 premium is 3.3 percent of a $456,000 house, close to the average price of the non-solar homes in the 2015 study, and 7.5 percent of a $200,000 house. A percentage measured on expensive California homes with small systems says very little about a mid-priced house with a large one.

The 2015 model itself reports its core result both ways, and the conversion is instructive. Its main estimate is that each kilowatt of installed solar raised the sale price by about 0.91 percent, which for the average home in the sample and its average 3.6 kW system became the $4.18 per watt, or roughly $15,000, that gets quoted. So 3.3 percent and $15,000 are the same finding, true for that sample's homes and system sizes. When you see a percentage, ask what size of system and what price of home it came from, and convert it to dollars per watt before you compare it with anything.

The premium faded much faster than the panels

The finding most relevant to anyone selling an older system is the one the headline numbers hide. The 2015 study split the homes with solar into four groups by the age of their systems at sale. Buyers paid about $5.90 per watt for systems about a year and a half old, $5.40 for systems about three years old, $3.67 for systems about five years old, and $2.60 for the oldest group, whose systems averaged 7.8 years. That is a fall of about 56 percent from the newest group to the oldest, which the authors describe as almost 60 percent.

The panels themselves had not lost anything like that. At the 0.5 percent a year median degradation rate covered in the panel lifespan guide, a system loses about 4 percent of its output in eight years. The study's authors concluded that the market depreciated systems in their first 10 years faster than both the panels' efficiency losses and straight-line depreciation over the system's useful life, which suggests buyers were discounting the technology for being superseded rather than for producing less. They also offered a reason the newest group scored so high: systems installed just before a sale may have come with other recent upgrades, or with a seller who had not used all the incentives.

Two cautions keep this from becoming a rule. The confidence intervals are wide, about plus or minus $1.30 to $1.51 per watt for each group, so the middle two groups overlap. And the data stop at the oldest group's 7.8-year average; the authors could not say whether value levels off in a system's second decade or keeps falling, and we found no later study of comparable size that answers it. If your system is older than 14 years, the oldest age in the Berkeley Lab sample, no study here tells you its premium.

Premiums tracked net cost, and net cost has just changed

The 2015 study compared the premiums with three ways an appraiser can value a system without comparable sales: the gross cost of installing it new, the net cost after government and utility incentives, and an income estimate of the energy it will produce. The premiums sat within a few cents of the net cost estimates, both in California and elsewhere, and more than $2.50 per watt below gross cost. Across the study's years the gross cost of a system fell 40 percent, from $8.97 per watt in 2002 to 2007 to $5.45 in 2012 to 2013, while the premium stayed close to $4 and was never statistically different from net cost in any period. Buyers, in other words, seemed to pay about what it would have cost them to add the same system after incentives.

The appraisal study drew the obvious implication in 2015: if the federal credit and other incentives expired, it said, the market might reveal premiums closer to gross cost. The federal residential credit has now ended for systems placed in service after December 31, 2025, so for a buyer comparing your house with adding solar to another one, the net cost of the alternative is the gross price, less only whatever state or utility incentive survives. On the studies' own logic, that pushes the premium for an owned system up relative to the incentive era. We found no published study of sales after 2025, so treat this as a reasoned expectation, not a finding.

The same logic also caps the old numbers. A buyer will not pay more for your system than it would cost to install a comparable one, and today's comparison price is far lower than in the study years. This site's comparison line, the U.S. Department of Energy's Q1 2025 residential benchmark of $2.95 per watt DC (modeled market price for an 8 kW system, 2024 dollars), is below the $4 per watt premium the 2015 study measured and well below the study-era gross costs. So the $15,000 figure cannot be carried forward as dollars per watt: a new system's whole installed price per watt is now lower than what buyers paid for a used one in 2013. The defensible ceiling for a system in 2026 is the cost of a new equivalent, reduced for age, and the worksheet below works it through.

New homes, small systems and the green cachet

Two smaller findings explain some of the spread in the numbers you will see. First, new homes, which in California now arrive with a code-minimum system sized by a formula in the state energy code (how the Title 24 minimum is calculated). The 2015 study found premiums of $3.58 per watt for new homes with solar against $4.51 for existing homes, a difference that was not statistically significant. The earlier California work had found a much wider gap, existing-home premiums near $6.50 per watt and new-home premiums near $2.50, which the 2015 authors traced largely to very expensive homes, over $1 million, that the earlier work included and the new study excluded. They also noted that a builder could not claim the federal credit, only the buyer could, and calculated that if buyers had paid for that credit the new-home premium would have been about $1.26 per watt higher, about $4.84, rather than the $3.58 measured, which suggests builders or buyers discounted solar on new homes.

Second, system size. The study's size model found that the premium per watt was highest for the smallest systems and declined as systems got larger, as if buyers paid something for having solar at all and then an increment for each additional kilowatt. The authors called this a possible green cachet, echoing the Dastrup study's finding that premiums were larger where more hybrid cars were registered. For a seller, the practical meaning is that doubling the size of a system does not double its premium, which is one more reason to size a system for the electricity you use rather than for resale.

What the appraiser and the lender will do with your panels

A premium only reaches the closing table if the buyer's lender lets the appraisal include it, and ownership decides that before any study does. Fannie Mae's Selling Guide, the rulebook for the conventional mortgages Fannie Mae buys, sorts solar into three main cases, plus unclear ownership. Panels the owner bought with cash, included in the home's purchase price, financed and repaid in full, or secured by the first mortgage fall under the standard appraisal rules, and an appraiser may give them value. Panels that are collateral for a separate loan can count toward value only if the documents show they cannot be repossessed for default on that loan; if the loan is collateralised but does not appear in the land records, the appraiser is told not to give the panels contributory value. Leased panels and panels under a power purchase agreement cannot be included in the appraised value at all.

Even with owned panels, an appraisal can still undervalue them because comparable sales are scarce. In the appraisal study, after removing sales that could not be paired with a similar home without solar, sales where the listing never mentioned the panels, and sales that were not at market value, only 20 percent of the original 208 homes with solar were usable. The authors reported that some underwriters demand a solar comparable before accepting any premium, and recommended that appraisers be allowed to use cost and income estimates instead. They found the income approach, using the Sandia-developed PV Value tool, valued systems conservatively rather than generously. If you are selling, the lien and UCC guide explains how to clear a filing before it becomes the buyer's lender's problem, and the leased solar sale guide covers the contract transfer that replaces a premium when the panels are not yours.

A seller's worksheet: a defensible range for your own system

No study prices your house, but the evidence supports a range you can defend to an agent or an appraiser. The approach mirrors the cost method appraisers use when comparable sales are missing: start from what a buyer would pay to install the same system new, then reduce it for age, and keep the result inside what the local market shows. Work it with stated inputs. An owned, paid-off 8 kW system, six years old, on a house where a comparable new system would be priced at the benchmark of $2.95 per watt: the new-equivalent cost is 8,000 watts times $2.95, or $23,600.

Now apply the age pattern from the 2015 study as a ratio rather than as dollars, because its dollar figures belong to 2013 prices. Systems about 4.8 years old commanded about 62 percent of what the newest systems did ($3.67 against $5.90 per watt), and systems about 7.8 years old about 44 percent ($2.60 against $5.90). Applied to the $23,600 new-equivalent cost, those ratios give a range of roughly $10,400 to $14,700 for a system between five and eight years old. That range is an illustration built from two dated sources, not an appraisal, and its job is to anchor a conversation: if a buyer's agent says the panels are worth nothing, or a listing agent says they add the full $23,600, both claims sit outside what the evidence supports.

What moves your house toward the top of the range is paperwork. Buyers and appraisers discount what they cannot verify, so assemble proof of ownership and payoff, the original contract and permit, the inspection sign-off and permission to operate, warranty documents and their transfer terms, and at least a year of production records from the monitoring account, ideally compared with the system's original estimate. Make sure the listing names the panels, their size and their ownership; the appraisal study found that unlisted solar was one of the reasons sales could not be used at all.

For buyers: what you are paying for

A buyer looking at a house with solar is effectively buying a used power system with a remaining life, and the Department of Energy's consumer guide to buying a house with solar frames the questions accordingly: how old the system and the roof are, who installed it and whether they still operate, what warranties remain, what the production records show, and whether the panels are owned or leased. It cites the Berkeley Lab finding of a premium of about $15,000 for an average-sized system, and points to the PV Value tool for estimating what the production is worth.

Use the studies in the other direction, too. A premium near the cost of a new system is hard to justify for panels that are several years old, given how fast the measured premiums fell with age, and a premium near zero ignores the system's real output. The appraisal study found no consistent difference in days on the market between homes with and without solar, so a seller's claim that the panels will make the house sell faster is not supported by that evidence. If the panels are leased, Fannie Mae's rules keep them out of the appraised value; what you are taking on is a contract, and its terms, not the hardware, decide whether it is an asset or a cost.