Do Solar Panels Increase Home Value? Here’s What Every Homeowner Should Know

As homeowners look for ways to increase property value and reduce expenses, solar panels have become an increasingly popular option. But do they actually add value to your home? And can they provide additional income? Let’s break down the key benefits of going solar and how it can positively impact your real estate investment.

Do Solar Panels Increase Home Value?

Yes! Studies consistently show that homes with solar panels sell for more than those without. According to a report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, homes with solar panels sell for an average premium of around $15,000 compared to similar homes without them.

The increase in home value depends on factors such as:

• Energy Savings: Buyers recognize the long-term savings on electricity bills, making solar-powered homes more attractive.

• Ownership vs. Lease: Owned solar panels add more value than leased systems since buyers prefer not to take on lease agreements.

• Local Market Demand: In states like Massachusetts, where energy costs are high and there are strong incentives for solar adoption, homes with solar panels are in greater demand.

• Age and Efficiency of the System: Newer, more efficient solar panels will contribute more to a home’s value than an older system nearing the end of its lifespan.

How Solar Panels Generate Income

Beyond increasing home value, solar panels can actually create income in several ways:

1. Lower Energy Bills

By producing your own electricity, you reduce or even eliminate your monthly utility costs. In Massachusetts, where electricity rates are among the highest in the country, the savings can be significant.

2. Net Metering Credits

If your solar panels produce more electricity than you use, the excess energy is sent back to the grid, and you receive credits on your electricity bill. This system, known as net metering, allows you to offset future energy costs.

3. Solar Renewable Energy Certificates (SRECs) or Incentives

Massachusetts previously offered Solar Renewable Energy Certificates (SRECs), which allowed homeowners to earn money by selling credits to utility companies. This program has since been replaced by the SMART Program (Solar Massachusetts Renewable Target), which provides fixed monthly payments to solar owners based on the amount of energy their system produces. The SMART Program helps homeowners generate additional income over the years and can be transferred when selling the property.

4. Tax Credits and Rebates

The federal government offers a solar investment tax credit (ITC), which allows homeowners to deduct a portion of their solar installation costs from their taxes. In 2024, the ITC remains at 30%, making solar installation more affordable.

Is Solar a Smart Investment for Your Home?

If you plan to stay in your home for several years, solar panels can provide significant financial benefits through energy savings, incentives, and increased resale value. However, if you’re planning to sell in the near future, it’s important to ensure that the system is fully owned, relatively new, and appealing to buyers in your market.

Whether you’re considering solar as a way to boost your home’s value or generate additional income, it’s essential to weigh the costs and benefits. If you're curious about how solar panels might impact your home’s value in your specific neighborhood, let’s connect—I’d be happy to provide insights based on the local market!