How Switching to Solar Can Increase Home Value

Switching to solar can increase home value by an average of 4.1% according to a widely cited Zillow study — meaning a median-valued home in Chester County, Pennsylvania, worth approximately $450,000 could gain more than $18,000 in added value simply by going solar.

That figure alone stops most homeowners in their tracks, and for good reason. Solar panels are no longer just about doing right by the environment; they are a tangible, research-backed home improvement that makes properties worth more, sell faster, and cost less to own every single month.

At TerraSol Energies, we’ve been helping Tri-State homeowners in Pennsylvania, New Jersey, and Delaware harness the sun’s energy since 2009.

In this guide, we’ll walk through everything you need to know — from how appraisers value solar to what happens if you lease your system — so you can make the most informed decision possible.

Switching to Solar Can Increase Home Value: What the Research Actually Says

The data behind solar's impact on property value is both compelling and consistent. Two landmark studies form the bedrock of what we know.

For homeowners and business owners looking to switch from traditional utility power, solar panels provide more than just green solutions for getting off the grid; they can actually increase the value of your property.

Research conducted in 2015 by the Lawrence Berkeley National Laboratory, a U.S. Department of Energy-affiliated research laboratory, found that homes equipped with solar panels in California were valued 4% higher than those without them.

According to the research, on average, homebuyers are “consistently willing to pay PV home premiums” of approximately $4 per watt of installed solar capacity. For a standard 6-kilowatt solar PV system, this means that solar can add $24,000 to your home’s resale value.”

The value of solar panels is found in more than just curb appeal; in areas where electricity rates are high, homeowners may be able to make use of energy rebates issued by public utility companies and local, state, or federal energy department incentives such as the Residential Renewable Energy Tax Credit.

While there are certainly plenty of ways to offset the cost of a solar panel system, the overall installation costs have declined 5-7% per year since 2005. The U.S. Department of Energy has tracked the average cost per module for solar panels in residential, commercial, and utility settings over the last 20 years. Since 1998, the price per module for a residential installation has plummeted from nearly $12 per panel to less than $6.

However, these significant drops in solar panel costs have caused the government to begin to cut back on tax credits. For homeowners who are considering adding solar panels to their home, there’s still plenty of time to take advantage of these credits.

Systems in place by the end of 2019 will still qualify for 30% of the installation cost; the credits will drop to 26% for systems installed before January 2021, and 22% for installations prior to January 2022.

If you’re thinking of adding solar panels to your home to increase its value, reduce your reliance on the utility grid, or attract a green energy-friendly buyer, now is the time to take advantage of the declining costs of solar panel installation, while maximizing tax credits and rebates.

The National Renewable Energy Laboratory (NREL) has also published research supporting the value of solar energy systems, noting that homes with solar panels installed tend to sell for more and move off the market faster than comparable non-solar homes.

Meanwhile, the widely cited Zillow study (2019) found that homes with solar panels sold for 4.1% more nationwide than those without them. Applied to local real estate, the math is clear:

These are not hypothetical projections. They reflect what prospective buyers in competitive real estate markets are already demonstrating a willingness to pay — month after month, sale after sale.

The Solar Energy Industries Association (SEIA) reinforces these findings, reporting record-breaking growth in home solar installations across the Mid-Atlantic region. Energy independence, lower electricity bills, and long-term protection against rising utility rates are all drivers of increased demand from home buyers evaluating solar homes.

Interesting to read: 5 Facts You Didn't Know About Solar

Why Solar Panels Increase Home Value: The Core Drivers

Understanding why homes with solar panels command higher sale prices helps you make a stronger case when it's time to sell — and helps you choose the right solar energy system from the start. There are a few ways this value gets created.

1. Energy Savings That Transfer to the New Owner

When many homeowners think about the financial benefits of solar, they focus on their own monthly savings. But savvy home buyers think like investors. A solar home with a fully owned system essentially comes with pre-paid electricity — a future stream of energy savings that transfers directly to the new owner.

According to the National Renewable Energy Laboratory, energy savings from rooftop panels over a 20-year period can easily exceed the upfront installation costs in most Mid-Atlantic markets. When a buyer can calculate exactly how much lower their electric bill will be, that value gets baked into the offer price.

For context, PECO residential electricity rates reached $0.155/kWh in 2025 — a 31% increase since 2019. As electricity rates rise, the value of a system that shields homeowners from those increases grows proportionally. Many homebuyers recognize this and are willing to pay a meaningful premium for that protection.

2. Energy Independence Is a Modern Buyer Priority

Beyond simple cost savings, solar energy delivers a quality of life that resonates with today's home buyers: energy independence. The ability to generate your own electricity from the sun’s energy — rather than being subject to utility rate hikes and grid outages — is increasingly seen as a premium feature, on par with a finished basement or an updated kitchen.

Renewable energy is now recognized as the future of home energy, and properties that have already made that transition are viewed as forward-thinking investments. This is especially true in Chester County, Montgomery County, and South Jersey markets, where environmentally conscious buyers represent a growing share of home buyers.

3. Faster Sales and Stronger Offers

Homes with solar panels don't just sell for more — they sell faster. A Lawrence Berkeley study found that solar homes sold about 20% faster than non-solar comparables. In a competitive market, that speed advantage reduces sellers' carrying costs and signals confidence in a home's value to prospective buyers.

For many homeowners approaching retirement or planning a move, the combination of increased property value, lower energy costs during ownership, and a quicker home sale represents one of the most compelling financial benefits available through any single home improvement project.

How Appraisers Value Solar Energy Systems

One area where many homeowners are caught off guard is the appraisal process. Solar energy systems are still a relatively new category for real estate appraisers, and valuation methods are not yet fully standardized across all markets.

The two most common approaches appraisers use are:

Income Approach: The appraiser calculates the present value of the future energy savings the solar panel system will generate over its remaining useful life. This method is favored for owned systems with strong documentation of electricity produced and current electricity rates.

Sales Comparison Approach: The appraiser looks at recent sale prices of comparable homes with and without solar panels in the same area. In markets with significant solar home sales data — like Chester County, PA — this method can be very favorable.

To ensure your solar energy systems are properly valued at sale, keep detailed records of your solar panel system's production history, installation costs, warranty documentation, and any government incentives received.

This documentation makes an appraiser’s job easier and supports a higher property value determination.

The Solar Energy Industries Association has published guides for appraisers that are helping standardize these methods across more markets — a positive trend for property owners with solar who want to see their investment fully recognized.

Property Taxes and Solar: What Homeowners in PA, NJ, DE & MD Need to Know

The relationship between solar installations and property taxes varies considerably across our service area — and it's one of the most important financial details to understand before and after installing solar panels.

Pennsylvania homeowners: PA does not offer a property tax exemption for residential solar installations. The increased property value created by solar panels installed on your home will be reflected in your assessed value — and your annual property taxes will increase modestly.

At Chester County’s average effective property tax rate of approximately 1.2%, a $22,800 increase in assessed value adds roughly $274 per year. This is a known and manageable cost that should be included in your full financial analysis — and TerraSol will walk through it with you before you make any decisions.

New Jersey and Maryland property owners enjoy a significant advantage: the full sale price premium from solar installations is tax-free for property tax purposes.

A NJ homeowner in Burlington County whose solar panel system adds $40,000 to their home’s assessed value pays no additional property taxes on that gain — while still capturing the full premium at sale. This is one of several reasons that NJ homeowners consistently see the strongest financial returns from solar in our service area.

Do Solar Panels Increase Home Value in Pennsylvania, New Jersey & Delaware?

While the national studies provide a strong baseline, local conditions in our service area make solar's financial benefits even more pronounced.

Pennsylvania: Property Tax Exemption for Solar

This is a detail that far too few property owners in Pennsylvania know: the state offers a property tax exemption for the added value of solar installations.

Under PA law, the increased property value from a solar energy system is excluded from your property tax assessment. That means you capture the full resale value and appraisal benefit of solar — without a corresponding increase in your annual property tax bill.

This is a significant local differentiator. In Chester County, where property taxes are already among the highest in the state, this exemption protects homeowners from what could otherwise be a meaningful ongoing cost increase.

For more details on how tax credits and incentives work at the state and federal level, see our guide on taking advantage of solar energy tax credits.

New Jersey: High Electricity Rates Increase ROI

New Jersey's electricity rates are consistently among the highest in the nation, which is exactly what makes solar so powerful here.

The higher the electricity rates you’re offsetting, the faster your system pays for itself and the more meaningful the lower electricity bills become to future home buyers evaluating your property.

NJ’s Successor Solar Incentive (SuSI) program also provides ongoing income through Transition Renewable Energy Certificates, adding another layer of financial benefit to New Jersey solar installations.

Delaware: Net Metering and Green Energy Fund

Delaware maintains retail-rate net metering — meaning the more electricity your system produces, the more credit you earn for electricity exported to the grid. Delaware’s DNREC Green Energy Fund also provides cash rebates that reduce upfront costs for qualifying installations.

When home buyers in all three states run the numbers on a home with solar energy systems, they see a realistic path to significantly lower electricity bills and meaningful energy savings over time — which is reflected in the price they're willing to pay.

Planning to sell in 3–5 years? Installing solar panels now lets you capture both the energy savings during ownership and the full sale price premium when you list.

TerraSol has completed hundreds of home solar installations in Chester County, Delaware County, and South Jersey — and our customers report that solar is consistently viewed positively by real estate agents and prospective buyers in these markets. See our completed residential solar projects.

Energy Savings Stack on Top of the Property Value Increase

The home value increase from solar panels works alongside — not instead of — the energy savings that solar electricity generates year after year. Together, these two streams of financial return make solar panel installation one of the most efficient home improvement investments available to homeowners in our region.

Consider a homeowner in West Chester, PA, who installs a 10 kW solar energy system today. Over the 8–10 years before reaching their solar payback period, they accumulate $12,000–$18,000 in avoided electricity costs.

When they sell the home, the solar panel system adds another $22,800–$40,000 to the sale price — depending on which valuation methodology their appraiser applies. The combined return — energy savings plus increased property value — far exceeds the installation costs, even in 2026 without the federal residential solar tax credit for purchased systems.

In New Jersey, the financial benefits compound even further. A homeowner in Burlington County with a 10 kW solar energy system earns approximately $700–$850 per year from the NJ SREC-II program on top of electricity bill savings, while the full sale price premium from solar adds to their home’s resale value with no corresponding property tax penalty. Over 25 years, total net returns for NJ solar homeowners regularly exceed $50,000.

Maximize Your Solar System’s Value

Getting the most out of your solar investment — both in daily energy savings and ultimate resale value — comes down to a few key decisions:

• Buy, don't lease. Own your system outright or finance it. Avoid solar leases and power purchase agreements if maximizing home value is a priority.
• Size your system correctly. An undersized system leaves money on the table; an oversized system may produce more electricity than your household needs. TerraSol’s energy analysis ensures your system is right-sized. For tips on optimizing performance, see our guide on how to maximize your solar power system.
• Maintain documentation. Keep all permits, warranties, production records, and installation invoices. This documentation is essential for appraisers and prospective buyers.
• Understand winter performance. Solar panels do produce power in winter — though at reduced output on cloudy days. Our guide on the effects of winter on your solar energy system explains what to expect and how to plan accordingly.
• Monitor your production. Regularly reviewing your system's output ensures it's performing as designed and flags any maintenance needs before they affect your system's value.

For home solar installations across Chester County, Delaware County, Gloucester County, and northern Delaware, TerraSol Energies has the local experience and certified installation teams to ensure your system is done right the first time.

Learn more about how solar power is reshaping energy costs and home ownership at our article on how solar power is beginning to change the world.

Ready to Add Real Value to Your Home? Talk to Us!

If you're a homeowner in tri-state and you're wondering how switching to solar can increase home value for your specific property, the best first step is a conversation with our team.

At TerraSol Energies, we've helped hundreds of property owners across the Tri-State area with home solar installations that reduce energy costs, improve quality of life, and add documented value at the time of sale.

To learn more about switching to solar power, or to find the right residential or commercial solar system for you, contact us at (888) 873-9995 or visit us online at https://www.terrasolenergies.com/.

Electricity rates are rising, incentives remain strong, and the evidence is clear: switching to solar can increase home value, lower your monthly energy costs, protect you from future rate increases, and connect your property to the clean energy future that today's home buyers are actively seeking.

Frequently Asked Questions

Does solar increase home value if I lease the panels?

No. Solar leases and power purchase agreements do not meaningfully increase your home's appraised value in the same way owned systems do. Because the solar company retains ownership of the panels, the asset does not transfer to the buyer as part of the property. Leased systems can also complicate the real estate transaction, as the lease must be transferred to the buyer. If you're considering selling, it may be worth exploring whether buying out your lease makes financial sense.

Will solar panels increase my property taxes in Pennsylvania?

No. Pennsylvania offers a property tax exemption specifically for the added value from solar installations. Your property's assessed value will not increase as a result of installing solar, meaning you capture the full financial benefit without a corresponding property tax increase.

Do homes with solar panels sell faster?

Yes. Research from Lawrence Berkeley National Laboratory found that solar homes sold approximately 20% faster than comparable non-solar homes. In markets with active solar home sales data — including Chester County, PA and South Jersey — homes with solar panels are increasingly sought after by energy-cost-conscious home buyers.

What government incentives are currently available for installing solar?

The federal government's 30% Investment Tax Credit (ITC) is available through 2032 under the Inflation Reduction Act. Pennsylvania, New Jersey, and Delaware each offer additional state-level incentives, including net metering, SREC/TREC programs, and, in some cases, cash rebates.