Does Solar Increase the Value of a Home?

November 12, 2022  |  Solar Energy

Installing solar panels on a property has numerous benefits. It’s a reliable, green source of energy that’s free after initial installation costs. Installing solar energy is a worthy investment, whether you own a residential or commercial property. One overlooked benefit of installing solar panels is its effect on the value of your property as well as its tax implications. So if you’re wondering: does solar increase the value of a home? Well, read on!

The Effect of Installing A Solar Energy System On Your Property Value

Installing solar panels increases the value of your property immensely. According to a study by Zillow, homes with solar panels sell for 4.1% more. From this study, we can conclude that solar installation increases the value of your property.

Besides an increase in property value, a solar energy system can make your property more sellable than a property without it. Buyers across the country are willing to pay approximately $15,000 more for a home with an average-sized solar energy system. The study suggests that homes with solar panels sell faster than those without.

Why Does Installing Solar Panels Increase Property Value?

There are numerous reasons why installing solar panels increases the value of your property. These include:

EV Charging

With a solar energy system on your property, you can easily charge an electric vehicle at your convenience. You don’t have to pull over to a charging station along the highway to charge your car. Also, you can choose to charge during the day or at off-peak night hours and benefit from net metering.

Buyers are highly likely to choose a home installed with solar panels if they own an EV, as it’s convenient for them.

Low Spending on Electricity

The average spending on electricity bills for a home in California is $201 monthly or $2412 annually. This amount is higher in case you have an EV or more home appliances. Some homes incur monthly bills above $500. Having solar panels installed means lower spending on electricity bills. With large enough solar panels, you can feed excess energy into the grid, earning credits. 

A home with a solar energy system translates to lower electricity bills. Such properties have more value and are highly likely to sell faster than those without. Some buyers prefer to spend more when purchasing a home and spend less on utility costs. 

Sustainability

With growing emphasis on sustainability and adoption of renewable energy, solar powered homes are more appealing and have a higher value than those without solar. Solar is a renewable source of energy that appeals to many buyers. Many buyers prefer homes that reflect their sustainable culture and environmental values. 

Using renewable solar energy reduces your carbon footprint and helps slow down the impacts of climate change. More people are willing to pay more for a home that helps them positively impact the environment and the planet.

Installation Costs

Many people want to install solar panels on their property. However, the process is complicated and comes with numerous costs. Therefore, it makes sense for them to buy a home with a pre-installed solar energy system, even though it comes at a higher price.

Solar Incentives

Most property owners benefit from financial incentives and metering programs as a result of promoting renewable solar energy. Some of these benefits include:

  • Federal Solar Tax Credit
  • Solar Renewable Energy Credits
  • Net Metering

The Federal Solar Tax Credit allows you to deduct upto 30% of installation costs from the federal tax owed. The Net Metering program enables homeowners to feed excess solar energy produced into the electricity grid and earn credits equivalent to the amount of electricity generated. You can then purchase back the electricity during off-peak hours at a highly reduced price.  Depending on your location, you can benefit from the numerous local and federal tax credits available. These incentives are highly beneficial as they help offset various costs.

How Does Installing Solar Panels Increase Property Taxes? 

While solar installation increases the value of your property, it has some implications on your taxes. In some states, installing solar panels can potentially increase property taxes.

The best thing for California residents is that solar installation does not increase property taxes, at least until 2025. The Property Tax Exclusion for Solar Energy Systems exempts property owners from paying additional taxes due to increased property value. When you install a solar panel system, your home valuation will go up automatically. However, you won’t pay additional taxes due to the value added by the solar energy system.

This incentive is highly beneficial, as people can buy property without worrying about additional taxes. 

Day One Solar Helps Increase the Value of Your Home

With all data pointing at increased home value after solar installation, it’s best to work with a trusted installation company. They can provide an accurate cost overview, savings, and return on investment. 

Day One Solar is committed to helping Santa Cruz residents adopt solar energy hassle-free and cost-effectively. We help property owners with a wide range of solar installations, including solar panels, heating systems, batteries, and more. As a leading solar installation and maintenance company, we help property owners reduce reliance on the electricity grid and enjoy the benefits of going solar. 


Reach out to us, and we’ll help with all matters related to solar!