Do Solar Panels Really Increase Your Home's Resale Value?

By Arizona Home Group

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You’d think in a place like Arizona, where the sun shines down 335 days a year, solar panels would be a no-brainer, but that’s not the case. And if you’ve ever wondered whether getting solar panels is worth it, the answer might surprise you.

Does solar add value to your home? The overall answer is: probably not. It can even hurt your resale value.

Here’s why: Many people lease their solar panels instead of buying them outright. While leasing might seem smart since you don’t have to pay $40,000 or $50,000 upfront, it can actually hurt your home’s resale value and make selling more complicated.

When you sell your home, most people do so before the 20-year lease is up. This means the new buyer has to take over those lease payments. They can’t just remove or take the panels to their next home. Add the fact that those lease payments often go up over time.

So now, the buyer has to qualify for both the mortgage and those monthly lease payments. This can mess with their debt-to-income ratio, which might mean they cannot afford a smaller home or qualify for a mortgage at all. That’s why homes with leased solar panels often take longer to sell and go for less money. Buyers need extra motivation to take on that financial responsibility.

If you’ve got $40,000 or $50,000 lying around, does it make sense to invest in a solar system? Having solar panels might bump up your home’s value, but probably not by much. Maybe you’ll see an extra $10,000 reflected in the appraisal, but you probably won’t get back the full cost unless you plan to stay home for decades.

Another thing to keep in mind is that solar panels don’t eliminate your electricity bill; they only reduce it. When you add the lease payment to what you’re still paying the utility company, the monthly savings aren’t as great as you might think.

What actually increases home value? Buyers care more about kitchens, bathrooms, and flooring; those upgrades consistently deliver higher ROI than solar panels. I’ve shown plenty of homes to buyers, and they light up at the sight of a sparkling new kitchen or bathroom. Solar panels? Not so much.

Solar isn’t bad—it just might not be the financial win you’re hoping for. If you’re contemplating solar panels, take some time to think it through. Avoid leasing them unless you plan to stay in your home for the full 20 years of that lease. There are smarter ways to spend that cash, and it’s just not a smart move for resale value.

Remember, this isn’t a knock on solar energy itself; it’s about understanding the implications of your choices. If you have more questions, please reach out at (602) 571-3730 or AHGadmin@gmail.com. We’re here to help.