Do Solar Panels Raise Perceived Property Values?

no effect

I don’t think it’s as simple as if they add value. If they are owned without a lien then yes, they add value. However, if the buyer has to assume a lease or loan payment on the panels, that devalues the entire property in my experience. I’m hopeful this will change over time but for now, that’s what I’m seeing. As REALTORS, we should be promoting education about solar panels and other sustainable features.

If the owner is leasing the home, the panels are an advantage for tenants.

If paid off, then yes it would increase the value of the house. but in several cases I had with buyers, once they found out what the monthly payment for these panels was, they were no longer qualified for the loan as it added another payment to mortgage, insurance and property taxes. so it stood in the way of buyer being able to buy the house.

I would think that the answer partially lies in the answer to the question of who is responsible for repairs to the roof if a new owner does not wish to have solar. Also if the home needs a new roof at some point, who then pays for the removal and replacement of the solar system. Surely the solar providers have addressed those issues. Buyer of solar systems need to address those issues so they can be able to give an accurate sellers disclosure.

Decreases if it’s on lease.

Solar panels do reduce the electric bill, but the payback period is very long.

I hope this survey distinguished between whether or not the solar panels are owned, owned and paid for, or leased. If owned and paid for in full, I can’t help but believe it would increase the value of the property.

I think they’re an eyesore. Would NEVER put them on my roof or buy a home that has them. I’m not convinced the ROI is worth it.

No, they cause damage, have to be removed for roof repair & reinstalled, most often not paid off at time of property transfer.

Last summer with my electric rate increase my bill for 4000 kwh went from $360 to $800. I put solar panels on my barn and last month’s bill was $-30. This months bill was $-40. Therefore I say that they have more value than a pool or new front door…

I don’t think I can give an answer to this question without selling one with solar and either finding a really good comp without solar or selling one without myself. I don’t know if buyers are willing to pay a lot more for a house with solar or not. I don’t see them paying more for a house with the updated windows in my area that are suppose to save on electric costs. They like them but don’t see a difference in prices for those homes.

Of course, it depends on the market and if the data can be extracted from that market that indicates whether the panels contribute to, take away from, or have no effect on value.

What’s worse is that homeowners believe the value of the home is increased by the amount they paid for the panels!

http://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/#Properties.20with.20Solar.20Panels
Everyone should understand what is required of appraisers when considering solar panels.

Appraiser here. In central Texas, it’s pretty rare for solar panels (owned, not leased) to add value. I don’t know why, I just know what the data says. I’ve done appraisals in neighborhoods where 50% of the homes have solar panels, and they don’t sell on average for any more than the ones with solar. Personally, given the choice between two duplicate homes, one with solar panels, I would take the solar panels and reduced electricity cost. But I’ve analyzed probably 50-60 properties with solar over the past 2-3 years, and almost never find any premium attached to them.

In reviewing a home with solar panels for a listing, the homeowners were proud of having them and have touted on Nextdoor their electrical bill. What they don’t say in touting their electrical bill is what are they paying for the solar panels and does that offset the reduction in electrical bills? So I did my due diligence and spoke to appraisers to ask what they would value the panels at and that value was low to zero. Not because of whether there was a loan or not but because of the life expectancy and value of the panels. My… Read more »

Question that needs to be asked to solar companies AND roofers: “If I need a new roof what’s the cost of removing and replacing solar panels– that is, in addition to shingle replacement? And will insurance cover?”. Answer to an acquaintance of mine was $20k and insurance did not cover.

As with all real estate, it depends. It depends on the market reaction, if there are other properties that have sold with panels, and if those sold properties actually sold for more based on paired sale analysis with properties without panels. Cost does not equal value and there is some aesthetics issues some buyers have with panels. There’s also the maintenance costs with panels. It’s not cut and dry, as an appraiser I would say in most of the markets I work in solar panels, even those that are paid off, may bring some value, but cost is well over… Read more »

decrease if not owned – no effect if owned

I am a certified appraiser in the DFW area and here is my take on it: If they are owned and no lien then they MIGHT add overall market value to the house. Every market area is different on if solar panels will add value. Your best bet is to do a paired sales analysis to determine if the market is willing to pay for the solar panels. In my experience sometimes they will add $10K, sometimes $20K. But in order for an appraiser or lender to consider them adding any value, they have to paid off.

Think depends on the neighborhood. Also think agents need better education about what it means to Sellers and Buyers when solar panels are involved in a sell or purchase.

I don’t know if it actually decreases value but it makes it much more difficult to sell. Days on Market are much longer than average in my market.

Absolutely , Solar Panels in my opinion are an added value factor to a prooperty.

Solar panels are a detriment to selling, and a bad long term financial decision, in most cases (maybe all cases).

It’s my understanding an appraiser doesn’t give value to a home in regards to solar panels. If the buyer is purchasing with a loan there’s several points to consider. Since the appraiser doesn’t give value for the panels that leaves the new buyer with additional funds to the table to pay the seller for the panels. If there’s an outstanding lien the buyer must qualify to assume the panels and at that time the dti increases for the buyer. If the panels aren’t assumable or the buyer can’t qualify to assume and still qualify for the new loan due to… Read more »

Until solar panels have a more reasonable ROI, they will not add value. It’s simple economics. Note on panels are 10 to 20 years and the average home owner stays in the home for 7 years. Unless you can pay cash for them, they are just another monthly liability.

This is a hot topic, and just another educational topic we have to add to our luandry list of Realtor’s point of reference for customers, potential clients and clients. While we are being cross examined by the courts on how and why as Realtors commissions are earned.

I had a listing that was hard to sell because the Buyer didn’t want to take over the contract for the house. The Seller ended up paying off the contract.

The problem with solar panels is that they EAT UP YOUR EQUITY because most solar contracts require payment in full when you sell your house. It is rare that they actually lower your electric bills unless you have the $10K battery to store your own energy. I recently sold a house where the Client had to pay off $55,000 (Yes, thousand$$$) of her solar contract in order to sell her house. In my opinion, they are a complete waste of your EQUITY.

Increase if paid off or nearly paid off. Decrease when the start of lease is recent and the monthly amount of it is high.

Panels, if done correctly and with storage, and if paid off, not with a lease, do increase a homes value.

They do not add value to the home if there is a lien for payoff. Read the appraisal reports & ask an appraiser. 🙂

I asked an appraiser and he said it adds zero value so far. Many do not like the look it creates on a roof plus when you need to reroof, how much added expense to remove the panels and then reinstall them.

It’s not a simple yes or no! The questions to be asked are how old are they, are they fully paid for and if not, how will they be paid off?

I do not know who was asked in this poll and perhaps there are parts of the USA that they do increase value. However, I have never seen them…even paid off…actually increase the value of the home. And, they are a deterrent when someone owes money and is trying to pass on that debt to the new buyer. It is sad that these solar panel companies are preying on the elderly and specifically use words that indicate they will raise the value of their home. I feel like this is something that NAR should take action against!

If the panels are owned or leased, it depends on who is going to assume the payment. If the buyer(s) have to assume the payment, it can affect their debt to income ratio which may disqualify them for the loan. If the panels are paid for or paid for at closing then there’s a possibility that there may be some value added to the property because it can make it more desirable to the buyer, who in turn may be willing to pay a little more for the property. In any case, there’s never a dollar for dollar value for… Read more »

They are definitely a challange and of 6 transactions I can remember last year, the seller had to pay off in order to sell. The question is if roof needs to be replaced how much will it costs to take off and put on again?

There are too many variables at each location for the answer to have much value. They should of added a 5th selection of “depends”.