Do Solar Panels Increase Home Value?

 

Almost every permitted improvement to your home, would increase it's value. This is also true for solar panels. According to a 2019 Zillow report “Homes With Solar Panels Sell for 4.1% More". However, the increase in home value varies, sometimes substantially, by region. If solar panels are popular in your area, they may provide a bigger boost to your home value than in less popular areas.

Higher demand

Energy efficiency is a growing concern, and solar panels are a well-known resource in improving efficiency and helping the environment. Many homeowners are attracted to the lower electric bill, thus making homes with solar panels more desirable and in higher demand.

Owned or Leased?

When you sell your home to a buyer who will need financing to purchase it, the appraiser will determine whether the solar array on your roof increases the appraised value or not.

According to the appraiser guidelines at fanniemae.com:

• The panels are owned. Owned panels may be included in the appraised value of the property.
• The panels are leased or covered by a Power Purchase Agreement. Leased panels may not be included in the appraised value of the property.
• The panels are financed as personal property. If the solar panels are financed as personal property (and therefore serve as collateral for the loan), they will do nothing to increase the value of the home.
• The panels are financed as fixture to real estate. Panels that are considered fixtures (permanently affixed to the property) can be used in the appraisal but only if they can’t be repossessed should the seller default on the terms of the financing agreement.