The short answer is yes. Installing solar panels can raise your home’s value by as much as 6.9%, depending on several key factors such as local electricity rates, system ownership, and demand for energy-efficient homes.
However, the real return on investment depends on where you live, how your system is financed, and how efficiently it performs over time. Below, we break down everything you need to know about how solar impacts home value, costs, financing, and long-term savings.
How Solar Panels Add Value to a Home
Homes equipped with solar systems consistently sell for more than comparable properties without them. National studies indicate that solar-powered homes can command 4–7% higher sale prices, translating to tens of thousands of dollars in added equity.
For example, a 6.9% increase on a $500,000 home equals roughly $34,500 in added value. On a $900,000 property, that premium can exceed $60,000.
Key Factors That Influence Value
Local electricity rates: States with higher utility costs often see greater value from solar since homeowners save more each month.
System age and efficiency: Modern, high-efficiency panels offer better performance and longevity, translating into higher resale value.
Ownership vs. lease: Owned systems add significant equity, while leased systems can complicate home sales due to transfer contracts.
Market demand: In eco-conscious regions, buyers actively seek out solar homes for sustainability and cost savings.
Is Installing Solar Worth It?
Whether solar panels make sense for your home depends on local policies, energy prices, and your budget. If your area offers generous incentives or has expensive electricity, solar is often a sound investment. A professional solar installer can analyze your property’s exposure, energy usage, and financing options to help you make an informed decision.
Pros and Cons of Installing Solar Panels
Like any major home improvement, solar panels come with both benefits and trade-offs.
Benefits
Increased property value and faster home sales
Dramatically lower energy bills
Eligibility for state and federal tax credits
Clean, renewable energy source that reduces your carbon footprint
Drawbacks
High upfront installation cost
Financial savings vary by state and local utility policies
Aesthetic concerns in historic or HOA-restricted areas
Leased systems may limit home sale flexibility
Solar Panel Installation Costs
Solar installation costs have fallen dramatically in recent years—nearly $15,000 less on average compared to two decades ago. As of the end of 2025, typical residential system costs around $29,000 before incentives.
With the federal Residential Clean Energy Credit, homeowners can deduct 30% from the total, reducing the average cost to roughly $20,500. Many states and municipalities also offer additional rebates or credits to lower the cost further.
What Affects the Cost of Solar?
System size: Larger systems generate more energy but cost more upfront.
Panel quality: Premium panels cost more but last longer and perform better.
Battery storage: Adding a solar battery can increase your total by $10,000 or more.
Financing method: Paying in cash provides maximum savings, while loans spread out payments but add long-term costs.
Solar Financing Options
If paying in cash isn’t practical, there are multiple financing solutions available:
Personal loans: Quick and flexible, though they may carry higher interest rates.
Home equity loans or HELOCs: Offer lower rates and possible tax deductions.
FHA 203(k) loans: Combine home purchase or refinance with energy upgrades.
Contractor financing: Offered by installers for convenience but may include higher fees.
Choose a financing plan that aligns with your income, goals, and expected time in the home to optimize your return.
Tips to Maximize Solar Value
According to EnergySage insights director Emily Walker, “Homeowners should maintain documentation—proof of ownership, warranties, and energy production records—to reassure future buyers.”
Other ways to protect and enhance your investment include:
Monitoring system performance regularly
Scheduling periodic maintenance checks
Considering battery storage upgrades for backup power and resale appeal
Reviewing transfer clauses before signing lease or PPA contracts
Are Solar Panels Right for You?
In many states, solar panels are a proven way to reduce long-term costs and increase property value. Yet, benefits vary depending on your local incentives and energy market. In sunny, high-cost regions, solar can deliver a strong return; in areas with cheap electricity or limited incentives, returns may be smaller.
Consulting a reputable local solar expert is the best way to determine whether solar energy aligns with your home’s financial and environmental goals.
Frequently Asked Questions About Solar and Home Value
Do solar panels increase home value?
Yes. Homes with solar systems often sell for 4–7% more than comparable homes without them, especially in states with strong solar incentives.
How much value can solar add to a home?
The increase depends on your home’s value and system size. For example, a 6.9% increase on a $600,000 home equals about $41,400 in added equity.
Are there states where solar adds less value?
Yes. In areas with low utility rates or limited incentives, the added home value may be smaller. Always research your state’s rebate programs and policies.
Do solar panels make it harder to sell your house?
Generally, no. Solar panels can make your home more appealing by lowering operating costs and showcasing modern efficiency. In fact, solar homes often sell faster than comparable properties.
How long does it take for solar panels to pay for themselves?
Most systems pay for themselves within six to ten years, depending on energy usage, incentives, and system efficiency.
Do solar homes sell faster?
Yes. Data from the National Renewable Energy Laboratory shows solar homes sell up to 20% faster than non-solar homes.
Is solar a good long-term investment?
Absolutely—especially for homeowners planning to stay put for several years. The combination of energy savings, tax credits, and increased home value typically outweighs the initial cost.
Final Thoughts
Solar panels offer both immediate and long-term financial advantages. Beyond reducing utility costs, they position your property as a modern, eco-friendly home that appeals to today’s energy-conscious buyers. While installation costs can be significant, the combination of federal tax credits, local incentives, and increased resale value makes solar a compelling investment for many homeowners.
For the best results, evaluate your energy needs, consult a certified solar installer, and explore all available rebates and financing programs in your area. With the right approach, solar energy can power not only your home—but also your financial future.
King & Edge Real Estate Agents in Boise, Idaho
As experienced Boise real estate agents, we are honored to have the opportunity to serve you and be a part of your real estate journey. Let us guide you towards a successful and rewarding experience, where your goals become our goals, and your vision becomes a reality. Contact us today and discover the unparalleled service and expertise that sets King & Edge Real Estate apart as we help you sell your home in Boise or find your place to call home.
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Manda Edge Boise Real Estate Agent
Manda, a Boise resident since 1992, deeply appreciates the charm and seasons of Treasure Valley and possesses extensive knowledge of its growth and market trends. Manda is renowned for her exceptional service, professionalism, communication skills, and integrity in pursuing her clients' goals. In 2021, she co-founded King & Edge Real Estate with Stacey King, emphasizing shared values and strong client relationships. The team has since closed over $100m in sales and donated $100,000+ to local charities. Manda holds memberships with REALM Global and the Institute for Luxury Home Marketing and has received multiple awards for her exceptional contributions to real estate, including the 2021 Boise Regional Realtors Professionalism Award.
