Money

Does solar increase home value? What the evidence actually shows

One study is behind almost every number you have read on this. It is good work, and it says less than it is quoted as saying.

Updated September 2026 · Data as of LBNL reports and the Fannie Mae Selling Guide read on 2 September 2026

Written by HyreSolar Research team Research and analysis

Audited by HyreSolar Research team Data audit and fact check

97% of the sample was Californian 3,828 of 3,951 solar sales

2013 is where the data end Study period 2002 to 2013

$2.60/W premium at about eight years old Down from $5.90/W at 1.6 years

The short answer

If you own the system outright, the best available evidence found a real and statistically strong premium. If you lease it, the same researchers looked and found no significant premium at all. The famous figure is $4.18 per watt, roughly $15,000 on an average 3.6 kW system, from a Lawrence Berkeley National Laboratory study. Four things about it are almost always dropped in the retelling: 97% of the solar homes in the sample were in California, the data end in 2013, the premium falls by more than half as a system ages from about eighteen months to about eight years, and it does not scale linearly with system size, so multiplying $4 by a big array is not something the study supports. And whatever any study says, a mortgage lender applies its own rules: on a leased system, Fannie Mae's guide states flatly that the value "cannot be included in the appraised value of the property".

Where the number everyone quotes comes from

Almost every claim you will read about solar and home value traces back to one paper: Selling Into the Sun, published by Lawrence Berkeley National Laboratory in January 2015. It is careful work. It is also quoted in ways its authors were explicit about not supporting.

The headline, verbatim: "an estimated premium of $4.18/W, with a 95% confidence interval of +/- $0.62/W, which corresponds to a premium of approximately $15,000 for an average-sized system of 3.6 kW".

The underlying finding is a regression coefficient rather than a dollar figure: "for each kilowatt of installed PV, sale prices increase by 0.91%", significant at p below 0.001. The study covered 22,822 home sales, of which 3,951 had solar, between 2002 and 2013.

The unit matters more than almost anything else on this page. The premium is expressed in dollars per watt of installed capacity. It is not a percentage added to your home's value. The percentage that does exist is 0.91% of sale price per kilowatt installed, which is a different quantity and cannot be quoted as "solar adds about 1% to a home".

More importantly, the dollar figure is derived from the percentage. The report gives the formula: the premium in dollars per watt is calculated from the coefficient using the mean sale price of non-solar homes in the sample. That means the $4/W number is mechanically a function of local house prices. In a market where homes cost half as much, the same coefficient produces roughly half the dollar premium. It was never a portable constant.

It is a California study wearing a national headline

Of 3,951 solar home sales in the sample, 3,828 were Californian. The entire evidence base outside California is 123 sales across seven states. Lawrence Berkeley National Laboratory, LBNL-6942E, Table 2. Retrieved September 2026.

The single most consequential thing dropped from the retelling is where the houses were.

The study covered eight states. It found 3,951 solar home sales. 3,828 of them were in California. The report says so plainly: California solar homes make up 97% of the sample. Florida contributed 25 sales. Maryland, North Carolina and Pennsylvania contributed 77 between them. Connecticut, Massachusetts and New York contributed 21.

The authors did run the numbers outside California, and published them honestly. The rest-of-US premium was $3.11/W, statistically significant, but with a 95% confidence interval of ±$2.33. That interval runs from roughly $0.78/W to $5.44/W, which is consistent with almost any conclusion you might want to draw. The report's own words: "the smaller sample of homes outside California does not allow for a very precise estimate of the effect size".

None of this makes the study weak. It makes it a study of the Californian market with a small and imprecise look elsewhere, which is exactly how the authors described it: "the results are not necessarily applicable to individual markets and states that might have unique characteristics".

The premium falls fast as the system ages

System age is the finding with the most direct bearing on a homeowner deciding whether solar will pay them back at resale, and it is almost never mentioned.

The study grouped existing-home sales by how old the solar system was. Systems averaging 1.6 years old carried a premium of $5.90/W. By an average age of 7.8 years, that had fallen to $2.60/W. The premium lost more than half its value in about six years.

The report's own conclusion, verbatim: "The market appears to depreciate PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses and of straight-line depreciation over the asset's life."

That is a striking statement. The market marked these systems down faster than they were physically degrading, and faster than simple straight-line depreciation over their life would imply.

And beyond that the study has nothing to say. It states that its data "are not robust to systems in their second decade", and asks openly: "Does their value level out and decrease at the rate of system degradation? Or do they lose 100% of their value before that? Those questions are recommended for future analyses."

So the honest position for a ten-year-old array is that nobody knows. The best available study stops before that point and says so.

1.6 years old (633 sales)$5.90/W

3.1 years old (613 sales)$5.40/W

4.8 years old (635 sales)$3.67/W

7.8 years old (626 sales)$2.60/W

Premium by system age, with the uncertainty attached

Age group (years)	Mean age	Premium	95% confidence interval	Sales
0.5 to 2.4	1.6 years	$5.90/W	±$1.30	633
2.4 to 3.8	3.1 years	$5.40/W	±$1.33	613
3.8 to 5.9	4.8 years	$3.67/W	±$1.37	635
5.9 to 14	7.8 years	$2.60/W	±$1.51	626

LBNL-6942E, Table 9, existing homes only. Retrieved September 2026.

The confidence intervals overlap between adjacent groups, so the year-by-year path is less certain than the endpoints. The gap between the youngest and oldest groups is not.

The premium does not scale with system size

A second model in the same study added a squared term for system size. The linear term came out at $5.86/W and the squared term at minus $0.53/W, significant at p = 0.013.

In plain terms: each additional watt is worth less than the one before it. The authors suggest why, and their phrasing is careful: "A green cachet might exist for PV homes; that is, buyers might be willing to pay a certain amount for having any size of PV system on their homes and then some increment more depending on the size of the system."

The practical consequence is that the arithmetic everyone does is wrong. Multiplying $4/W by a 12 kW system to get $48,000 is not supported by the study the $4 came from. The larger the system, the more that multiplication overstates.

If you lease it, this is a different question with a different answer

Selling Into the Sun excluded leased systems entirely, and said so three separate times. From the introduction: the research "focuses on only host-owned PV systems and therefore excludes third-party-owned systems". From the abstract and again from the conclusion, the same point, with a recommendation that someone study leases.

Two years later the same lead author did exactly that. Leasing Into the Sun, published January 2017, modelled 20,106 California home sales from 2011 to 2013, including 2,914 host-owned solar sales and 113 third-party-owned ones, and added a paired-sales analysis of 18 matched pairs in San Diego.

Host-owned systems showed a premium of $4.39/W, consistent with the earlier work. Third-party-owned systems showed $2.11/W with a confidence interval of ±$2.24, which is not statistically significant. Pre-paid leases showed no significant premium either. The paired-sales analysis found no evidence of an impact on value, and no evidence that leased-solar homes sold faster or slower.

Now the caution, which belongs with the finding every time it is quoted. The authors wrote: "an absence of evidence of a TPO effect does not necessarily construe evidence of an effect's absence; potentially more data might allow a smaller TPO effect to be discovered." With 113 sales, the test was underpowered.

Their own summary line is the fairest statement available: there is "an absence of clear evidence that TPO systems do the same, either positively or negatively".

So the honest answer on leases is not "a lease destroys your home value". It is that researchers looked in one large market over three years and could not find a premium, and that the study was not powerful enough to rule out a small one. What a lease reliably does change is something separate and more certain, and it is the next section.

What a mortgage lender will actually recognise

A study measures what buyers paid. A lender decides what counts in an appraisal, and that decision is written down. For most American home sales the operative rules are Fannie Mae's, and on this subject they are unusually blunt.

Fannie Mae recognises four structures: borrower-owned panels, leasing agreements, separately financed panels where the panels are collateral for a debt distinct from the mortgage, and power purchase agreements. The treatment differs sharply between them, and it is the practical answer to "will this show up in my sale price".

Owned outright, standard rules apply. If the panels were bought for cash, included in the purchase price, financed and repaid in full, or secured by the existing first mortgage, then normal appraisal, insurance and title requirements govern, and contributory value is assessed like any other improvement.

Leased or on a PPA, the answer is a flat no. The guide states: "The value of the solar panels cannot be included in the appraised value of the property." It goes further, excluding the panels from the loan-to-value calculation as well, even where a precautionary filing exists, because the lease status takes priority.

Separately financed, it depends on one clause in your loan documents. "Separately financed solar panels must not contribute to the value of the property unless the related documents indicate the panels cannot be repossessed in the event of default on the associated financing." If your lender can repossess the panels, they do not add appraised value. If a filing sits in the land records ahead of the mortgage, "it must be subordinated".

And if nobody can tell who owns them, the answer defaults to no. Where documentation is insufficient and ownership is unclear, "no value for the panels may be attributed to the property value on the appraisal" unless the lender obtains a search confirming the panels are not claimed as collateral.

That last rule is worth sitting with. Paperwork you cannot produce has the same effect as a lease: the value goes to zero for appraisal purposes. Keeping the purchase documents and any lien release is not administrative tidiness, it is what preserves the value the study measured.

What counts in the appraisal, by how you paid

How the system is held	Counts toward appraised value?	The operative rule
Owned outright	Yes, on standard appraisal rules	Cash, included in the purchase price, financed and repaid, or secured by the first mortgage
Leased	No	"The value of the solar panels cannot be included in the appraised value of the property"
Power purchase agreement	No	Same rule as a lease; also excluded from the loan-to-value calculation
Separately financed, not repossessable	Yes	The appraiser is instructed to consider the panels, provided they cannot be repossessed on default
Separately financed, repossessable	No	The appraiser is instructed not to give contributory value, because the panels are collateral for another debt
PACE-financed	Worse than no	The loan is not eligible for delivery to Fannie Mae unless the PACE balance is paid in full before or at closing
Ownership unclear	No	No value may be attributed unless a search confirms the panels are not claimed as collateral

Quoted from the Fannie Mae Selling Guide, B2-3-04 Properties with Solar Panels and B5-3.4-01 Property Assessed Clean Energy Loans, read 2 September 2026.

The PACE row is the one that surprises sellers. It is not a valuation question at all: an unpaid PACE assessment can make the buyer’s financing ineligible, which in practice means it gets paid off out of the sale.

LBNL has published criticism of how its own field is used

We looked for evidence cutting against the popular claim, and found the sharpest of it inside Berkeley Lab's own publication list. A 2015 paper on the state of this literature concluded that "the results of studies have been overgeneralized and oversold, and embodied flawed methods", and that there has been "little if any discernible uptake of these practices by the appraisal practice at large".

We include that because a page arguing for careful reading of one study should not then suppress a criticism of the field that study belongs to. It does not overturn the finding. It is a caution about the confidence with which the finding is repeated, which is the same caution this page is making.

What to do with all this if you are deciding

1
Separate the two questions
Does solar save me money on electricity, and will solar come back at resale? They have different answers, different evidence and different confidence levels. The savings question is far better evidenced than the resale one.
2
Know which structure you are buying
Owned, leased, PPA, separately financed, or PACE. That single choice determines whether a lender will let the system count in an appraisal at all, before any study is relevant.
3
Do not budget a resale premium at $4 per watt
It is from a 97%-Californian sample, from data ending in 2013, it falls by more than half as the system ages, and it does not scale linearly with size. If you want a planning figure, treat the study as evidence that owned solar has historically been worth something at resale, not as a price list.
4
Ask what happens if the loan is repossessable
If your financing lets the lender take the panels back, Fannie Mae’s rules say they do not contribute to appraised value. That is a term in your loan documents, and it is worth reading before signing rather than at closing.
5
Keep every document
Purchase invoice, financing agreement, any lien release, warranty documents, and the interconnection paperwork. Where ownership cannot be documented, the appraisal treats the value as zero.
6
If you are buying a home that already has solar
Establish the structure before you make an offer, because a lease or an unpaid PACE assessment changes what your own financing can do. Ask for the agreement, not a description of it.

Method and limitations

What we read

Both Berkeley Lab reports in full: Selling Into the Sun (LBNL-6942E, January 2015) and Leasing Into the Sun (LBNL-1007003, January 2017), retrieved as complete PDFs. Every figure, confidence interval and quotation on this page comes from the reports themselves rather than from a summary of them. The Fannie Mae Selling Guide sections were read directly.

The reports were reached through the Department of Energy's OSTI repository, because Berkeley Lab's own publication site refuses automated retrieval.

What we do not publish

The widely quoted Zillow figure. It appears in almost every article on this subject. We could not reach its source, and we do not republish a statistic we have not read at source, however often it is repeated elsewhere.

Any figure for what solar adds to a home in your state. No such figure exists in the evidence. The one study large enough to support state-level estimates has 25 sales in Florida and 21 across three northeastern states.

Freddie Mac's treatment. Its guide is served as a JavaScript application that returns no content to automated retrieval, so this page describes Fannie Mae's rules only and says so.

Age of the evidence

The primary study's data end in 2013. Since then panel prices have fallen substantially, California has replaced its net metering regime twice, battery attachment has grown from negligible to common, and the federal credit schedule has changed more than once. Every one of those plausibly affects what a buyer will pay for an existing array.

We are not aware of a study of comparable scale covering the current market. If one exists we would rather cite it than this, and this page will be updated if we find it. Until then, the honest description of the state of knowledge is that the best evidence is more than a decade old.

Questions

How much does solar add to home value?

The most cited figure is $4.18 per watt, about $15,000 on an average 3.6 kW system, from a 2015 Berkeley Lab study. Treat it as evidence that owned solar was worth something at resale in California between 2002 and 2013, rather than as a number to put in a budget. It is 97% Californian, it depreciates by more than half over about six years, and it does not scale linearly with system size.

Does a leased solar system add value to my home?

Berkeley Lab tested exactly this and found no statistically significant premium for third-party-owned systems, in California between 2011 and 2013. Their own caution matters: with 113 leased-home sales the test was underpowered, so this is an absence of evidence rather than proof of no effect. It is not a finding that leases reduce value. What is certain is the lender treatment: on a lease or PPA, Fannie Mae states the value cannot be included in the appraised value.

Does solar add a percentage to my home value?

Not in the way that phrasing implies. The study’s finding is that sale prices rise 0.91% per kilowatt installed, which is a rate per unit of capacity rather than a flat percentage for having solar. And the dollar version of that figure is calculated from local home prices, so it is larger in expensive markets and smaller in cheap ones by construction.

Does an older solar system still add value?

Less, and the decline is steep. Systems averaging 1.6 years old carried a $5.90 per watt premium; by 7.8 years it was $2.60. Berkeley Lab noted the market depreciated these systems faster than they physically degrade. Beyond about fourteen years the study has no data and explicitly says the question is open.

Will an appraiser include my solar panels?

It depends on how you hold the system, and the rules are written down rather than left to judgement. Owned outright, standard appraisal rules apply. Leased or on a PPA, the value cannot be included. Separately financed, it counts only if the documents show the panels cannot be repossessed on default. If ownership cannot be documented at all, no value may be attributed.

What happens if my solar was financed with PACE?

It becomes a closing problem rather than a valuation one. Fannie Mae states that properties with items financed by a PACE loan are not eligible for delivery unless the PACE loan is paid in full before or at closing. In practice that generally means the balance is retired out of the sale proceeds.

Do solar homes sell faster?

The paired-sales analysis in the 2017 leasing study looked at speed of sale across 18 matched pairs in San Diego and found the mean and median differences were very near zero, giving no evidence of a change in how quickly the homes sold. That is a small sample in one market, and it addresses leased systems specifically.

Should I install solar to increase my home value?

The evidence does not support treating resale value as the reason. It is more than a decade old, heavily Californian, and it shows the premium falling quickly with system age. The stronger case for solar is the electricity it produces while you live there, which is far better evidenced and which you can calculate for your own house and utility rate.

Written and audited by

HyreSolar Research

Primary-source research, data analysis and fact checking

We are a research desk, not a sales floor. We read the statute, the tariff, the code section, the federal filing or the manufacturer data sheet ourselves, and we publish the figure with the document it came from and the date we retrieved it. Where a number cannot be traced to a primary source, we publish the shorter page and say what we could not verify. That rule has cost us whole sections, and it is the reason the rest can be trusted.

160: primary sources read and cited
220: figures with a retrieval date
115: federal and state government sources
66: researched pages published

How this desk works

Primary sources only. Statutes from the legislature’s own publishing system, federal data from the agency that collects it, code text from the adopted edition, manufacturer claims from the data sheet. We do not cite an article that cites a source; we go and read the source.
Every figure carries its provenance. A named document and the date we retrieved it, so you can check it and so you know how old it is. Retrieval dates are not decoration: an EIA rate from May is a different fact from an EIA rate from August.
We publish what we could not verify. Every research page carries a section naming the things we tried to establish and could not, and why. A paywalled standard, a state website that refused the request, a manufacturer that publishes no figure at all.
We separate measurement from modelling from our own reasoning, and label which is which on the page. A laboratory measurement, an assumption inside a modelling tool and our own inference are three different kinds of claim and they are never presented as one.
We do not sell solar, and we take no payment for placement, ranking or a favourable mention. Nobody buys a position on this site.

Data as of LBNL reports and the Fannie Mae Selling Guide read on 2 September 2026. Authorship on this site is organisational: the analysis belongs to the desk rather than to a named individual, and we do not publish credentials we do not hold. Our editorial policy sets out how we source, date and correct what we publish.

Sources & retrieval dates

Hoen et al., Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes (LBNL-6942E) — Lawrence Berkeley National Laboratory, January 2015. Source for the $4.18/W premium and its confidence interval, the 0.91%-per-kilowatt coefficient, the derivation formula, the 97% California sample composition, the per-age premiums, the non-linear size term, and every stated limitation quoted on this page. Retrieved 2 September 2026.
Hoen, Rand and Adomatis, Leasing Into the Sun: A Mixed Method Analysis of Transactions of Homes with Third Party Owned Solar (LBNL-1007003) — Lawrence Berkeley National Laboratory, January 2017. Source for the host-owned premium of $4.39/W, the non-significant third-party-owned result of $2.11/W, the paired-sales and time-on-market findings, and the authors’ caution that an absence of evidence is not evidence of absence. Retrieved 2 September 2026.
Fannie Mae Selling Guide, B2-3-04 Properties with Solar Panels — Source for the four recognised ownership structures and their treatment: the standard-rules position for owned panels, the rule that leased and PPA panel value cannot be included in appraised value, the repossession condition on separately financed panels, the subordination requirement for a senior fixture filing, and the default to no value where ownership is unclear. Retrieved 2 September 2026.
Fannie Mae Selling Guide, B5-3.4-01 Property Assessed Clean Energy Loans — Source for the rule that a property with a PACE-financed system is not eligible for delivery unless the PACE loan is paid in full before or at closing. Retrieved 2 September 2026.
Mills, A Critical Assessment of Proxy Methods for Valuing Photovoltaic Systems (LBNL-1003835) — Lawrence Berkeley National Laboratory, 2015. Source for the finding that results in this literature "have been overgeneralized and oversold, and embodied flawed methods", and that valuation practices have seen little uptake in the appraisal profession. Retrieved 2 September 2026.

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