Can solar panels increase your home’s value?

You’ve probably heard solar panels can reduce your electricity bill and lead to major savings over time, but can they also increase your home’s resale value? Over the last few years, researchers have discovered that in fact, they do.

While installing solar panels may seem like a costly investment, a recent study by the Lawrence Berkeley National Laboratory (the Berkeley Lab) found that Americans are willing to pay more for homes that have solar photovoltaic (PV) systems. The study estimates that buyers typically pay about four dollars per watt of solar power installed, meaning that a five-kilowatt system can lead to an added value of $20,000. Even given the costs of solar panel installation, the study suggests homeowners end up making money when selling their homes.

It’s less clear whether solar panels add value when homeowners rent solar power systems instead of buying them outright. Because of the upfront costs associated with solar panels, many Americans choose to rent PV systems. These leases often last for 20 years and can make selling your house more complicated. Nonetheless, a 2016 survey by the Berkeley Lab found that leased solar energy systems don’t reduce a home’s overall value and in some cases add value. Overall, real estate experts are finding that in an era when homebuyers are looking to go green, investing in solar panels — whether you buy or lease them — is likely to make your home more valuable.