Solar as a Home Investment: How Going Solar Can Lower Energy Costs and Increase Home Value

For homeowners considering solar, the financial conversation often begins with one question: how much could I reduce my electricity costs?

But there is another potential financial benefit worth considering.

A properly designed solar system may lower the amount of electricity a homeowner needs to purchase from the utility while also making the property more attractive to certain future buyers.

That gives solar something many other home improvements do not have: the potential to provide an ongoing financial benefit while you own the home and additional market appeal when you eventually sell.

Neither benefit is guaranteed. The result depends on system ownership, electricity production, equipment condition, financing, local real-estate demand and the individual property.

Solar Is Different From Many Other Home Improvements

Most home upgrades primarily improve comfort, appearance or functionality.

A remodeled kitchen, new flooring or landscaping may improve how a home looks and may influence resale value, but those improvements do not normally produce something the household otherwise has to purchase every month.

Solar can.

Every kilowatt-hour of solar electricity that is produced and used inside the home can reduce the amount of electricity that must be purchased from the utility.

Over many years, that difference can add up.

For California homeowners, where electricity costs remain high, that can make energy production an important part of the home's financial picture.

The Two Potential Financial Benefits of Solar

A homeowner can think about residential solar in two separate ways.

The second benefit should never be treated as guaranteed.

Solar should ideally make financial sense based on the homeowner's electricity usage and project economics before any assumed increase in resale value is included.

Do Solar Panels Actually Increase Home Value?

Research suggests that owned residential solar systems can add value in some housing markets.

One of the largest U.S. studies was conducted by Lawrence Berkeley National Laboratory.

Researchers analyzed 22,822 home sales across eight states, including 3,951 properties with solar photovoltaic systems.

The study found that buyers were historically willing to pay premiums for homes with homeowner-owned solar systems.

Across the dataset, the average estimated premium was approximately $4 per watt, or around $15,000 for an average 3.6-kW system.

The research analyzed transactions from 2002 through 2013, so those numbers should not be used as a 2026 price guarantee.

Solar equipment prices, system sizes, utility rules and housing markets have changed considerably since then.

What Zillow Found About Solar Homes

A separate Zillow analysis published in 2019 found that homes with solar-energy systems sold for approximately 4.1% more on average nationally than comparable homes without solar during the period studied.

Zillow reported a solar premium of approximately:

• 3.6% in Los Angeles
• 4.4% in San Francisco
• 4.1% across the U.S. sample

Again, those figures are historical market research, not a forecast of how much a particular California home will sell for today.

What Determines How Much Value Solar May Add?

Solar does not exist separately from the rest of the property.

Buyers, appraisers and real-estate professionals may consider many factors when evaluating a solar-equipped home.

• local housing demand
• property location
• overall condition of the home
• local electricity prices
• system ownership
• system age
• remaining useful life
• solar production history
• equipment quality
• roof condition
• remaining warranty coverage
• battery storage
• documentation and permits
• local comparable sales

This is why homeowners should avoid assuming that spending $20,000 on solar automatically makes their home worth $20,000 more.

Owned Solar and Leased Solar Are Not the Same at Resale

Ownership structure can make a major difference when a home is sold.

Owned Solar

If the homeowner owns the system outright, the equipment can generally be included with the sale of the property like another major home improvement.

A buyer may see value in purchasing a home where the solar system is already installed and producing electricity.

California's Solar Consumer Protection Guide notes that purchasing solar with cash or a loan may increase home value, although the outcome depends on the property and market.

Solar Loans

A homeowner with an outstanding solar loan should understand what must happen when the property is sold.

Depending on the financing agreement, the loan may need to be paid off or otherwise resolved during the transaction.

Homeowners should read the financing agreement before listing the property rather than assuming the obligation will automatically transfer to the buyer.

Solar Leases and Power Purchase Agreements

Leases and PPAs work differently because the homeowner generally does not own the solar equipment.

The buyer may need to qualify to assume the agreement, or the seller may need to buy out or otherwise resolve the contract.

The California Public Utilities Commission warns that selling a home can be more complicated when a property has a solar lease or PPA.

NationPro USA covers these ownership structures in more detail in its guide to California solar leases and PPAs .

California Has Another Solar Property-Value Consideration

California currently has an active solar energy system new-construction exclusion for qualifying installations.

Normally, adding something of value to real property can increase the property's assessed value for property-tax purposes.

Under this exclusion, a qualifying active solar energy system is generally not added to the existing assessed value simply because the system was installed.

The California State Board of Equalization states that qualifying systems completed before January 1, 2027 may receive the exclusion.

In practical terms, that means a homeowner may add qualifying solar equipment without the installation itself automatically increasing the existing property-tax assessment while the exclusion applies.

Property owners should confirm their individual situation with the local county assessor.

California Electricity Prices Strengthen the Energy-Savings Case

Home value is only one part of the solar investment calculation.

For most homeowners, the more immediate financial benefit is electricity production.

U.S. Energy Information Administration data through June 2026 shows California residential electricity prices averaging approximately 32.83 cents per kilowatt-hour year-to-date.

The U.S. residential average over the same period was approximately 18.11 cents per kilowatt-hour.

Individual rates vary by utility and rate plan, but California's statewide prices help explain why reducing utility purchases can carry substantial financial weight.

NationPro USA discusses those costs further in why California electricity rates are so high .

Solar Creates Value Through Electricity Production

The financial logic is relatively simple.

Electricity produced by the system and used inside the home is electricity the homeowner may not need to purchase from the utility.

That is why the most important system metric is not simply the number of panels.

Homeowners should understand:

• the system size in kilowatts
• estimated annual production in kilowatt-hours
• how much electricity the household currently uses
• when the household uses electricity
• the applicable utility rate plan
• how much solar electricity is expected to be used inside the home
• how much is expected to be exported

Battery Storage Can Add Another Layer of Home-Energy Value

Modern California solar systems are increasingly paired with battery storage.

A battery can store part of the electricity produced during daylight hours and make that energy available later.

Depending on system configuration and utility rules, battery storage may help homeowners:

• use more of their own solar electricity
• reduce utility purchases during selected peak-rate periods
• store daytime solar for evening use
• keep selected circuits powered during qualifying outages
• manage household electricity use more strategically

For a future buyer, an existing solar-plus-battery system may therefore offer more than rooftop electricity generation.

It may provide an already-installed home energy-management and backup-power system.

Learn more in NationPro USA's guide to home battery storage and solar energy .

A Battery Does Not Automatically Increase Home Value Either

Just as with solar panels, homeowners should avoid attaching a guaranteed resale premium to battery storage.

Battery age, chemistry, capacity, warranty, condition and system configuration all matter.

A relatively new battery with clear documentation and transferable warranty coverage may be viewed differently from an aging battery nearing the end of its expected service life.

Not Every Solar System Adds the Same Resale Appeal

The quality of the installed system can influence how easily a future buyer understands and evaluates it.

System Age

A newer system with many years of expected production remaining may be more attractive than an older system approaching major component replacement.

Equipment Quality

Established equipment brands with clear warranty coverage can make it easier for buyers to understand what is installed.

Production History

Monitoring records can help demonstrate how much electricity the system has actually produced.

Warranty Coverage

Keep copies of panel, inverter, battery and workmanship warranties and determine whether those warranties transfer to a future owner.

Installation Quality

Clean electrical work, properly mounted equipment, approved permits and a professionally installed system can help give future buyers confidence.

Roof Condition

The relationship between the solar system and the roof matters.

A buyer may be less enthusiastic about solar if the roof underneath it requires replacement immediately after closing.

Documentation Can Matter When You Sell

Homeowners should keep solar records just as they would paperwork for a major remodel or roof replacement.

Keep copies of:

• the installation contract
• equipment model numbers
• permits
• utility interconnection approval
• warranty documents
• solar production records
• battery information
• service history
• loan payoff information where applicable

Clear documentation can make it easier for a buyer, agent, appraiser or lender to understand the system.

Think Beyond the Future Selling Price

Evaluating solar only through a future home-price premium misses much of its possible financial benefit.

Imagine a homeowner owns a solar system for ten years before selling the property.

During those ten years, the system may have produced tens of thousands of kilowatt-hours of electricity.

Part of that electricity may have reduced what the homeowner otherwise would have purchased from the utility.

At the end of those ten years, the homeowner may then sell a property that already has an energy-producing system installed.

The better financial framework is therefore:

Solar Should Make Sense Before You Assume Any Resale Premium

Homeowners should not install solar solely because they expect the system to dramatically increase their future selling price.

A stronger approach is to first determine whether solar makes sense based on the home's actual energy economics.

Review:

• 12 months of electricity usage when available
• current utility rates
• roof condition
• solar exposure and shading
• system size
• estimated annual production
• system price
• financing costs
• battery requirements
• expected length of homeownership

If the system makes sense based on those numbers, any future resale benefit becomes an additional reason to appreciate the investment rather than the only reason for making it.

What If You Plan to Sell the Home Soon?

The length of time you expect to own the property should influence the decision.

A homeowner expecting to stay for many years has more time to benefit from the electricity the system produces.

Someone expecting to sell in the near future should pay closer attention to:

• system ownership
• loan payoff requirements
• lease or PPA transfer provisions
• roof condition
• local solar-home comparable sales
• warranty transferability

California's Solar Consumer Protection Guide specifically recommends asking what happens to your solar agreement if you sell the home.

Your Roof Can Become an Energy-Producing Part of the Property

Homeowners traditionally think of a house as a place to live and a long-term asset.

Rooftop solar adds another function.

Part of the property can produce electricity that the household would otherwise need to purchase.

For California homeowners, where utility electricity is expensive, that distinction matters.

Solar can therefore be evaluated not simply as equipment attached to the roof, but as part of the home's long-term energy plan.

NationPro USA's California solar guide covers current solar planning, pricing and utility considerations in more detail.

Questions to Ask Before Treating Solar as a Home Investment

Before signing a solar agreement, ask:

• How much electricity does my home currently use?
• How much electricity is this system expected to produce each year?
• What is the total cash price?
• What is the financed price?
• Do I own the equipment?
• What happens to the solar agreement if I sell?
• How old is my roof?
• Does battery storage make sense for my usage?
• Which warranties transfer to a new homeowner?
• What documentation will I receive after installation?

Homeowners can review additional questions in NationPro USA's guide to things to know before going solar .

Solar Home Value FAQs

Do solar panels increase home value?

They can. Historical U.S. housing studies have found price premiums for homes with homeowner-owned solar systems. The actual effect varies by property, system, market, equipment age, electricity costs and other factors, so no specific resale increase is guaranteed.

How much value can solar add to a California home?

There is no universal percentage. Historical Zillow research reported premiums of 3.6% in Los Angeles and 4.4% in San Francisco during the period studied, while Berkeley Lab research also found premiums for owned solar. Those figures should be viewed as historical research rather than predictions for an individual 2026 sale.

Does owned solar add more value than leased solar?

Owned solar can generally be transferred with the property more simply than a lease or power purchase agreement. California's Solar Consumer Protection Guide notes that leases and PPAs can make a sale more complicated because the buyer may need to assume the agreement or the seller may need to resolve or buy out the contract.

Does installing solar increase California property taxes?

California currently provides a new-construction property-tax exclusion for certain qualifying active solar energy systems. Qualifying installations completed before January 1, 2027 may receive the exclusion, meaning the solar addition itself generally is not added to the existing assessed value while the exclusion applies.

Does battery storage increase home value?

A home battery may add buyer appeal by providing energy-management and backup-power capabilities, but there is no guaranteed dollar amount. Battery age, capacity, warranty, condition and system design can affect how a buyer views it.

Can a solar lease make it harder to sell a home?

It can make the transaction more complicated. A buyer may need to qualify to assume the lease or PPA, or the seller may need to buy out or otherwise resolve the agreement according to the contract terms.

Should I install solar only to increase resale value?

No. Solar should first make sense based on electricity usage, system cost, projected production, utility rates, financing and expected length of homeownership. Any future resale benefit should be treated as an additional possible benefit.

What documents should I keep after installing solar?

Keep the installation contract, equipment information, permits, utility interconnection approval, warranties, production records, service history and financing or loan information. These documents can help future buyers understand the system.