Does Solar Increase the Value of My Home?

by AL REX, CPA & Realtor

Does Solar Increase the Value of My Home?

Yes. Solar does increase the value in the eyes of most buyers, but there are certain parameters to consider and be wary of when pondering the installation of solar in your home.

Home Value. I’ve interviewed several lenders, appraisers, solar companies, and home owners. All believe that solar adds somewhere between 40% to 80% (of its cost) to the value of your home. I feel it is closer to the 40% number, but that doesn’t mean you shouldn’t install solar. Increasing the value by installing solar is a bonus. Your primary reason to add solar should be to eliminate or minimize your electric bill today and in the future as utility costs continue to rise. The federal 30% tax credit is still available and these are dollars in your pocket. For example, if you purchase a $20,000 solar system, your 30% credit back is $6,000. If your tax bill to the IRS is $14,000 for the year, it now becomes just $8,000.

Will solar become more valuable to a home in years to come? The consensus is that solar will become more popular as consumers gain more familiarity with this industry and will also pay a higher price for a home with solar already installed as the years progress.

Should I lease solar or buy? I recommend paying cash or financing solar to take advantage of the 30% tax credit. There are lenders who can provide financing or a Home Equity Line of Credit (HELOC). If you lease, the 30% tax credit is not available to you. Also, I recently sold a home with a “leased” solar system, and while a majority of the prospective buyers did appreciate the lower utility bills, the thought of taking on a twenty year lease was viewed as a negative. When appraisers find that solar is leased, they typically add zero value to the home.

Be sure to choose a reputable company with solar as their main line of business. A lot of small companies are trying to do solar on the side, and may not get the best results. Also, check references from their past clients.

Because the utility savings payback may take between five to eight years, don’t install solar if you plan to move in two to three years. Enjoy the 30% tax credit, but be sure to gain several years of savings as well. For more information give me a call or contact the Solar Electrical Power Association (SEPA) at 202-857-0898.


Al Rex has been a top selling realtor in Carlsbad for the past ten years, where he and his family reside. Visit his website at www.carlsbadhousefinder.com to get updated MLS information, or to find a floor plan for your own home.


Al Rex
CPA & Realtor • BRE# 01377312
7030 Avenida Encinas, Suite 100, Carlsbad, CA 92011
760-473-8572
Al@AlRexRealty.com