Does Solar Increase Home Value? (With Numbers)

There are various reasons people invest in solar electricity systems for their homes. These include reducing the impact on the environment, lowering monthly running costs, or in places with an unstable electrical power supply to improve the stability and availability of electricity to the home.

Whether or not solar increases the home value depends mainly on where the home is located. In the USA, there are ten states where solar has an upward effect on home values. Likewise, in different parts of the world, some solar installations increase a home’s value.

Can you tell if installing a solar electricity system will positively affect your home’s resale value? In this article, let’s analyze the different factors which affect home values and where solar systems fit in.

Does Solar Increase Home Value?

In certain parts of the USA, Europe, and the rest of the world, a solar installation positively impacts the sale price.

The size of that impact is dependent on many different factors.

Climate change is here to stay, and the awareness of that fact is widely accepted. The individual homeowners need to become part of the solution, rather than the problem, which has made most citizens of first-world countries look at where they can get involved.

From simple things like more controlled waste disposal, purchasing EV’s through to installing Solar in homes and moving off the grid is becoming more and more widely accepted.

The main motivations to install a solar electricity system in the home are:

  1. To become part of the green movement by investing in renewable energy sources.
  2. To reduce monthly energy costs.
  3. With electricity utilities being stretched to the limit, solar energy can stabilize a home’s electricity supply.

Although it may not be the primary consideration, asking if a solar installation increases a home’s value is still relevant.

In a recent survey, 80% of home buyers stated that energy efficiency is important. The question, of course, is, is the buyer prepared to pay a premium for a house with an installed solar system?

Where Does Solar Have The Most Impact On House Prices?


Before  looking at specific areas, let’s look at factors that may influence this:

  1. The climate characteristics of the area. Warm sunny areas will achieve a better yield from solar systems, and therefore the solar installation will have a more significant impact on the monthly household expenses. The opposite is true in cold climates with inclement weather and little sun.
  2. How much electricity does a house consume? A home with high electricity usage (for example, heated flooring) will benefit from a solar installation. For homeowners who know their houses have a high electricity consumption, the upfront premium will be worthwhile compared to the longer-term savings.

With these factors in mind, the following ten states in the USA showed an improvement in average home prices on building with solar installations. The prices are based on a medium value home.

StatePercentage increase in selling price$ increase
New Jersey9.9%$32,281
North Carolina4.8%$8,996
New York3.6%$10,981
South Carolina3.5%$5,866

Based on an average installation cost of US$10,000, sellers in five states achieved a real return on investment by installing solar systems.

A factor not always be considered is that, although a solar power installation may not significantly impact the home’s resale price, the increase in the home’s saleability is improved. As a result, a house may sell more quickly and may not be on the market as long.

How Does Solar Compare To The Other Factors In A House Sale?


The traditional factors which influence a home’s sale are:

  1. The perceived status of the neighborhood, proximity to shopping centers, schools, and medical help
  2. The specification of the house (number of bedrooms, bathrooms, garages, etc.)
  3. The home’s finishes.
  4. Condition of the buildings and garden
  5. How the asking price compares to other similar properties in the area.
  6. How safe the house is, the crime rate in the area, police presence, etc.
  7. How accessible is the home within the neighborhood? Further afield, how accessible is the neighborhood? Are there reliable transport options for the commuter?

Assuming the property for sale meets all these criteria, solar may well be a deciding factor between two similar properties. The importance of a solar system’s ability to add a premium to the home selling prices will consider several factors.

The deciding factors can be:

  1. What size system is installed? Is the system able to achieve significant savings by being entirely off the grid, and if so, what is the value of those savings?
  2. What is the home’s electricity consumption level? Does it have big consuming items such as heated floors?
  3. Is the system sufficiently sized to run wholly off-grid, or is it a grid-connected system that only provides some financial relief and continuity if the utility supply is interrupted?
  4. The age and type of solar system installed. If an older installation uses lead-acid batteries, the added value will be minimal. The batteries may have a short remaining life and be replaced at a considerable cost in the future.
  5. The quality and age of the solar panels will also influence the perceived value that the solar system is seen to add.
  6. How big is the roof, and can it accommodate more solar panels to allow for growth in the solar installation?
  7. How reliably does the utility provide the electricity? Some countries have very constrained electricity supply from the local utility. These countries often suffer from planned outages (load shedding). In these cases, a solar system that provides sufficient off-grid electricity for the home will be one of the primary considerations for the prospective buyer.
Solar Increase Home Value


Installing a solar power system should not primarily be driven by a possible improvement in the property’s resale value. However, depending on where you are, there is no question that it is a good price influencer. 

As utility electricity supplies become more constrained, solar may assume greater importance in valuing a home value.

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