Do Solar Panels Increase Home Value? (+ Insurance, Roof Damage And Resale Guide)

Solar panels increase home value by an average of 4.1 % — about $32,800 for an 8 kW system — according to Zillow research across 4.6 million home sales. That is more than double the $15,400 net cost after the 30 % federal tax credit. Homeowners insurance typically increases $10–$25 per month to cover the added value. Properly installed panels do not damage your roof — they actually protect the area underneath. But only owned solar adds value; leased panels can complicate home sales.

When I installed solar, my home insurance went up $14 per month after I called my insurer to add the system to my dwelling coverage. My agent said it was one of the easiest home improvements to insure — no moving parts, no water pipes, no fire risk. Meanwhile, Zillow estimates the panels added about $26,000 to my home's value, far exceeding the $15,400 I paid after the tax credit. Solar is one of the few home improvements that returns more in home value than it costs.

Do Solar Panels Increase Home Value? (Yes — Here Is How Much)

Two landmark studies provide the data:

Zillow (2021): Analyzed 4.6 million home sales and found that homes with solar panels sold for 4.1 % more than comparable homes without solar. For the median US home value of $400,000 in 2026, that is about $16,400 in added value from solar alone.

Lawrence Berkeley National Laboratory: Found a premium of $3–$4 per watt of installed solar capacity. For an 8 kW system, that is $24,000–$32,000 in added value.

Value Added vs Cost Paid

Item	Amount
8 kW system installed cost	$22,000
Federal ITC (30 %)	−$6,600
Net cost	$15,400
Home value added (Zillow 4.1 %)	$16,400 ($400k home)
Home value added (LBNL $4.10/W)	$32,800
ROI on day one	107–213 %

Solar is one of the few home improvements where you get back more than you spend on day one — before counting any electricity savings. Add 25 years of electricity savings ($39,000–$44,000) and the total financial benefit is $55,000–$77,000 from a $15,400 investment.

Solar Panel Home Value Premium By State ($ Per Watt Added)

Solar panels add $2.60–$5.90 per watt to home value depending on the state. States with high electricity rates (Hawaii, New Jersey, Massachusetts) see the largest premiums because buyers value the electricity savings more. For an 8 kW system, the value added ranges from $20,800 in Arizona to $47,200 in Hawaii. The national average is $4.10 per watt or about $32,800 for an 8 kW system — far more than the $15,400 net cost after the 30 % federal tax credit.

Factors That Increase The Premium

High electricity rates: States where grid electricity is expensive (HI, NJ, MA, CA, CT) see the highest premiums because buyers value the savings more
Newer system: A 1-year-old system adds more value than a 15-year-old system (remaining useful life is longer)
Larger system: More kW = more savings = more value added
Owned (not leased): Only owned systems add value. Leased systems may reduce value
Good production data: Buyers who can see monitored production history pay more confidently

Solar Panels And Homeowners Insurance

Solar Panels And Homeowners Insurance: What You Need To Know

Most homeowners insurance policies cover solar panels under dwelling coverage — the same coverage that protects your roof, walls, and built-in appliances. However, you typically need to increase your coverage limit to include the replacement cost of the solar system ($15,000– $30,000). This increases your premium by $10–$25 per month on average. Always notify your insurer before or immediately after installation — failure to disclose the addition could result in a denied claim.

What Is Covered

Most homeowners insurance covers solar panels under dwelling coverage — the same section that covers your roof, walls, and built-in home systems. Covered events include:

Hail damage
Wind damage
Fire
Lightning strikes
Falling trees and debris
Theft (especially for ground-mounted systems)
Vandalism

Not covered: Normal wear and degradation, manufacturer defects, and power output decline. These are covered by the manufacturer warranty (25 years for most panels).

How Much Does Insurance Increase?

Solar panels increase your home's replacement cost, which typically raises your premium by $10–$25 per month ($120–$300 per year). The exact increase depends on:

System replacement cost ($15,000–$30,000)
Your insurer and policy type
Your location and risk profile (hail-prone areas may see higher increases)
Whether your insurer offers a solar discount

The math works: $120–$300 per year in extra insurance is trivial compared to $1,600+ per year in electricity savings.

What To Do When You Install

Notify your insurer within 30 days of installation
Increase dwelling coverage by the system's replacement cost
Keep documentation: installer invoice, equipment serial numbers, warranty certificates
Review annually to ensure coverage keeps pace with any system additions

Do Solar Panels Damage Your Roof?

No — when properly installed. Professional installation uses:

Lag bolts anchored into roof rafters (not just sheathing) for structural security
Aluminum flashing that slides under shingles and seals around each bolt — preventing leaks
Proper torque specifications that secure the bolt without over-compressing

The area of roof under the panels is actually in better condition than the exposed roof because it is shielded from UV radiation, rain, hail, and temperature cycling. When panels are removed after 25 years, the roof underneath looks newer than the surrounding area.

When Roof Damage Can Occur

Risk factor	What happens	How to prevent
Old roof (under 10 years remaining)	Roof fails before panels do; removal costs $1,500–$3,000	Replace roof before installing solar
Poor installer (no flashing)	Water enters around lag bolts	Hire reputable installer, check reviews
Wrong mount for roof type	Tile cracking, membrane puncture	Ensure installer uses correct mount type
Missed rafter (bolt in sheathing only)	Weak attachment, potential pullout in wind	Professional installers use rafter finders

See Solar Panel Installation Guide for mounting by roof type.

Solar Panels And Selling Your Home

Owned Solar (Cash Or Loan): Adds Value

Zillow's 4.1 % premium applies to owned systems
The system transfers to the buyer at closing like any other home improvement
Provide the buyer with: production history, warranty documentation, maintenance records
Highlight annual electricity savings in the listing ($1,600+/year is a strong selling point)

Leased Solar: Complicates The Sale

The buyer must agree to assume the remaining lease term
Some buyers refuse — narrowing your buyer pool
If the buyer refuses, you must buy out the lease before closing ($5,000–$15,000)
Real estate agents report that leased solar can slow sales by 1–3 months
Leased panels do not add to your home's appraised value

This is one of the strongest arguments for buying rather than leasing. See Solar Financing — Lease vs Buy for the full comparison.

Are Solar Panels Safe?

Concern	Reality	Risk level
Fire	0.006 % incident rate (NFPA). Most incidents from wiring faults, not panels	Very low
Health / radiation	Panels produce DC electricity, not ionizing radiation. Zero health risk	None
Structural load	~2.5 lbs/sqft. Well within residential roof limits (~20 lbs/sqft typical)	None
Hail	Tempered glass rated for 1" hail at 50 mph (IEC 61215)	Very low
Wind	Racking rated for 90–150 mph depending on zone. Flush-mount is most wind-resistant	Low
EMP	Panels are solid-state with no sensitive electronics. Would likely survive	Very low
Firefighter safety	NEC 690.12 rapid shutdown reduces voltage to under 80V in 30 seconds	Addressed by code

Solar panels are one of the safest additions you can make to a home. No moving parts, no combustion, no water, no gas. The 0.006 % fire incident rate is lower than many common household systems.

Property Tax Exemption

Over 30 states exempt solar panels from property tax assessments. This means your home value increases (4.1 % average) but your property taxes do not increase. States with solar property tax exemptions include: California, New York, New Jersey, Massachusetts, Connecticut, Texas, Florida, Arizona, Colorado, Illinois, Maryland, Virginia, and many others. Check DSIRE for your state.

Common Misreadings

"Solar panels decrease home value." The opposite. Zillow and LBNL data consistently show a 4.1 % / $3–$4/W premium for owned solar systems across all US markets studied.
"Insurance will not cover my solar panels." Most standard homeowners policies cover solar under dwelling coverage. You just need to increase your coverage limit and notify your insurer.
"Solar panels will damage my roof and void my roof warranty." Properly installed panels do not damage roofs. Most major roofing manufacturers (GAF, CertainTeed, Owens Corning) confirm that properly flashed solar penetrations do not void the roof warranty. Get this in writing from your roofer.
"Leased solar adds the same value as owned." It does not. Zillow's premium applies to owned systems. Leased systems are a liability transfer, not an asset. Some buyers pay less for homes with solar leases because of the contract obligation.
"Solar panels are a fire hazard." The 0.006 % incident rate is extremely low. Modern systems with NEC 690.12 rapid shutdown are safer than ever. By comparison, dryer fires (the #1 household appliance fire cause) affect roughly 0.05 % of homes annually — 8× higher than solar.

Bottom Line

Solar panels are one of the best home investments available in 2026. They add $24,000–$32,800 in home value for an 8 kW system that costs $15,400 after the tax credit. Insurance increases by $10–$25/month — trivial compared to $130+/month in electricity savings. Properly installed panels do not damage your roof. The only caveat: buy, do not lease — only owned systems add value, and leased systems can complicate home sales.

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Frequently Asked Questions

Do solar panels increase home value?

Yes. Zillow research across 4.6 million home sales found that homes with solar panels sell for 4.1% more on average than comparable homes without solar. Lawrence Berkeley National Laboratory found a premium of $3 to $4 per watt. For an 8 kW system, that is $24,000 to $32,000 in added value — significantly more than the $15,400 net cost after the 30% federal tax credit.

How much do solar panels add to home value?

The national average is $4.10 per watt or about 4.1% of home value. For an 8 kW system: roughly $32,800 in added value. The premium varies by state: Hawaii ($5.90/W), New Jersey ($5.20/W), and Massachusetts ($4.90/W) see the highest premiums because electricity rates are high and buyers value the savings more. Arizona and Texas see lower premiums ($2.60–$2.80/W) despite having more sun.

Does solar increase home value on Zillow?

Yes. Zillow's 2021 study of 4.6 million home sales across the US found a 4.1% average price premium for homes with solar panels. Zillow's analysis controlled for home size, location, age, and other factors to isolate the solar premium. The premium was consistent across different markets, with higher-electricity-rate areas showing larger premiums.

Do solar panels affect homeowners insurance?

Yes, slightly. Solar panels increase your home's replacement cost, which typically raises your insurance premium by $10 to $25 per month ($120 to $300 per year). Most standard homeowners policies cover solar panels under dwelling coverage. You should notify your insurer when you install solar and increase your dwelling coverage limit to include the system's replacement cost.

Does home insurance cover solar panels?

Usually yes. Most homeowners insurance covers solar panels under dwelling coverage for events like hail, wind, fire, lightning, and falling debris. You may need to increase your coverage limit to include the replacement cost. Some insurers offer solar-specific endorsements. Damage from normal wear, degradation, and manufacturer defects is NOT covered by homeowners insurance — that falls under the manufacturer warranty.

Do solar panels damage the roof?

Not when properly installed. Professional installers use lag bolts into rafters with aluminum flashing that seals penetrations against leaks. The area of roof under panels is actually protected from UV degradation, rain, and hail — it lasts longer than the exposed roof. Damage can occur from poor installation (missed rafter, no flashing, wrong fasteners) or installing on a roof with fewer than 10 years of life remaining.

Do leased solar panels increase home value?

No, and they can actually complicate home sales. Because the leasing company owns the system, the panels are not your property and do not add to your home's value. When selling, the buyer must agree to assume the remaining lease or you must buy it out. Some buyers refuse homes with solar leases, narrowing your buyer pool. Zillow's 4.1% premium applies only to owned systems.

Are solar panels safe?

Yes. The fire incident rate for solar PV systems is approximately 0.006% according to NREL and NFPA data — lower than many common household appliances. Modern panels meet NEC 690.12 rapid shutdown requirements for firefighter safety. Solar panels produce DC electricity, not ionizing radiation, and pose no health risk. Structurally, panels add about 2.5 lbs per square foot — well within residential roof load limits.

Does removing solar panels damage the roof?

Minimally. When panels are removed, the mounting holes must be properly sealed with roofing cement or new flashing. If the roof was properly maintained under the panels, removal and sealing takes a few hours and costs $500 to $1,500 for a professional. The bolt holes are small (typically 5/16 inch) and are easily patched. The roof under panels is often in better condition than the surrounding exposed roof.

Do solar panels affect property taxes?

In most states, no. Over 30 states have property tax exemptions for solar energy systems, meaning the added home value from solar does NOT increase your property tax assessment. For example, California, New York, New Jersey, Massachusetts, Texas, Florida, and Arizona all exempt solar from property taxes. Check DSIRE (dsireusa.org) for your state's policy.

What is the solar panel fire risk?

Very low. NFPA data shows a fire incident rate of approximately 0.006% for solar PV systems. Most incidents are caused by improper wiring, damaged connectors, or defective components — not the panels themselves. NEC 2017 and later editions require rapid shutdown systems that reduce rooftop DC voltage to under 80V within 30 seconds, significantly improving firefighter safety.

Sources

Marko Visic

Physicist and solar energy enthusiast. After installing solar panels on my own house, I built TheGreenWatt to share what I learned. All calculators use NREL PVWatts v8 data and peer-reviewed formulas.