As solar energy becomes more accessible and affordable, many homeowners are asking a key question: Do solar panels increase home value? And if they do, by how much? The short answer is yes—solar panels can increase the resale value of your home, especially when installed by a reputable company and maintained properly. But the complete answer is a bit more nuanced.
This article will help you understand what factors influence the rise in value, how much you could gain, and how solar panels offer other financial incentives that make it a good investment.
What Factors Affect an Increase in Value?
Solar panels can increase your home’s value and make your property competitive in a crowded real estate market. Homes with solar energy systems often sell faster than those without, especially in neighborhoods where green features are in demand.
Many factors affect your home’s value, so let’s break down how solar panels can help increase a home’s value.
Location
Location plays a big role in a home’s value. Luckily for homeowners, Colorado is one of the best solar states due to its number of sunny days and strong net metering policies. Buyers in Colorado are more likely to see the long-term financial benefits of solar, and homes in major Colorado cities, like Denver, Fort Collins, and Colorado Springs, may attract a higher number of solar-conscious buyers than markets where utility rates are lower or solar adoption is less common. Local incentives, discussed in more detail below, also help create interest.
Ownership Structure
Homes with owned solar systems, paid for in full or financed through loans, tend to see higher value increases than homes with leased systems. Buyers prefer ownership because they don’t have to assume someone else’s lease, monthly payment, or contract restrictions. An owned system is treated more like a home upgrade (like a renovated kitchen), whereas a leased system can be seen as a liability or ongoing obligation.
Age and Size
The size and age of your solar panel system can also factor into how much value it can add to your home. A house with solar panels nearing the end of their warranty period may not provide as much value as newer ones.
Longevity
When evaluating solar, it’s important to consider not just savings today, but how long you’ll be around to enjoy them. If you expect to move in the next year or two, the financial payoff might be smaller, although you could still benefit from increased resale value. If you plan to stay long-term, solar can offer both monthly savings and a long-term increase in property value
How Much Does Solar Increase Home Value?
A house with solar panels offers two major selling points: long-term utility savings and a smaller carbon footprint. Buyers recognize that solar can reduce or even eliminate their electric bills and are willing to pay a premium for that advantage.
In fact, a study from Zillow found that houses with solar panels sold for more than comparable homes without solar. They found that homes sold for 4.1% more on average, which they calculated was over $9,000 for a median-valued home.
Remember that the housing market fluctuates, so this number isn’t exact. The value of your home will always depend on the factors previously mentioned, like your system’s size and age.
What Tax Incentives Do Colorado Homeowners Get for Going Solar?
In Colorado, homeowners benefit from climate-focused federal incentives and state-specific tax breaks that make solar even more affordable. If you live in Colorado, you can get tax incentives for solar panels up to 30% if you install equipment during the tax year. Another notable tax exemption is the Colorado Sales and Use Tax Exemption for Renewable Energy Equipment, which exempts homeowners from paying state sales tax on eligible solar energy systems and related components. Residential homes are also exempt from Colorado property taxation, so there are quite a few incentives to going solar.
Are There Any Other Potential Financial Benefits of Residential Solar Power in Colorado?
Residential solar in Colorado offers homeowners several meaningful financial advantages—some immediate, others long-term. The most obvious benefit is the reduction in monthly electricity bills. With Colorado’s average electric rates and abundant sunshine, many solar owners can offset a significant portion of their annual utility costs—some even eliminate their bills entirely. Over the system’s life, this can translate into tens of thousands of dollars in savings.
Homeowners can also take advantage of net metering programs offered by many of the state’s major utilities, including Xcel Energy and Fort Collins Utilities. Net metering allows you to earn credit for the excess electricity your system produces and feeds back to the grid. Those credits are then applied to your future usage, lowering your out-of-pocket energy costs.
Do Solar Panels Affect Home Insurance?
Another common concern homeowners have is, “Do solar panels increase home insurance?” In most cases, the answer is no—solar panels typically have a minimal effect on insurance premiums. However, it’s still a good idea to notify your insurance provider when you install a system.
Some insurers may recommend a policy update to ensure the full replacement cost of the panels is covered in the event of damage, such as from hail or fire.
In general, adding solar panels is seen as a value-adding improvement, much like renovating a kitchen or replacing a roof. As long as you work with a licensed installer and update your policy accordingly, insurance concerns should be minimal.
How Can You Get Started with Solar?
So, do solar panels increase home value? In most cases, the answer is a confident yes. Solar reduces your monthly utility bills and appeals to future buyers who want lower energy costs and eco-friendly living. The exact value added depends on system quality, ownership, and location, but the benefits are clear in solar-forward markets like Colorado.
If you’re planning to add solar panels to your home or need help maintaining or upgrading an existing system, Remove and Replace Solar is here to help. We serve homeowners across Colorado with high-quality removal, reinstallation, and repair services.At Remove and Replace Solar, we help homeowners across Colorado take the next step with confidence. Whether you need a full installation, panel upgrades, or reinstallation after a roof repair, our team is ready to guide you. Reach out today for a custom estimate and see how solar can work for your home.
Loading...