Do Solar Panels Increase Home Value?

As homeowners consider investing more heavily in renewable energy, the decision often comes down to whether or not installing solar panels will boost their home's market value.

Homes equipped with solar installations can see an increase in value, attracting buyers willing to pay a premium for energy efficiency. However, the extent of this value-added feature varies widely depending on geographic location, local electricity costs, and the size of the installation, among other factors.

This variability raises the question: under what circumstances do solar panels make financial sense for homeowners?

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Key Considerations for Selling with Solar Panels

• Solar installations don't boost home values as much as you might think. In many cases, they don't increase sale price at all.
• However, homes with solar panels have increased marketability and may sell faster.
• Solar panels are more likely to increase the value of properties that are already considered premium, like new construction, executive homes, and move-up buyer markets.
• In addition, home solar systems in Calgary typically have a payback period between 7 and 15 years, far lower than the 25-plus-year lifespan. Long-term owners can enjoy years of free energy.
• Calgary's abundant sunshine makes it a good candidate for those interested in home solar.

Can Solar Panels Increase Home Value?

How much do solar panels increase the value of your home? It's a valid question—solar panels have a lifespan of 25+ years, and few homeowners will stay in the same house that long.

Logically speaking, it makes sense that solar panels would boost your sale price. What homeowner doesn't want lower electricity bills for decades? That should translate into a hefty selling premium, right?

But here's the honest truth: when you stop looking at studies and start looking at what actually happens during a home sale, buyers don't usually pay extra because of solar.

Why? Because emotion is the primary driver of offer price.

When a buyer tours your home, they form impressions in seconds based on what they see and feel. Curb appeal, cleanliness, and natural light them feel welcome. Kitchen updates make them excited to cook. Hardwood floors and modern bath fixtures make them ooh and aah.

These features directly appeal to buyer emotions and make them more attached to the house. And when they're attached to the house, they're willing to pay more so they don't lose it. That's why they're so common on "best pre-sale home improvements" lists.

Even less glamorous updates appeal to emotion when they're tied to comfort and functionality. New big-ticket essentials like an HVAC or roof give a buyer a sense of security.

Solar panels aren't essential for a house to function. Energy savings aren't something buyers can touch and experience during a showing. They affect logic, not emotion, so they rarely trigger a higher offer on their own. Most buyers see solar as a bonus, not something worth paying a premium for.

In some cases, you do see a benefit. The right buyer sees the value. The home sells faster and for a higher price. But even then, buyers aren't going to just add the cost of the system to their offer. You might see 1–3% impact, mostly indirectly.

In most cases, solar helps with market differentiation, not price. In a competitive buyer's market, they'll pick your home over the neighbour's because the panels make it feel more modern and offer lower operating costs. But they won't pay much more for it.

And sometimes, solar doesn't matter at all, or actively deters buyers. The buyer doesn't understand the benefits, or they question the reliability, or they're an entry-level or investor buyer who doesn't want to pay for a pricey system they don't strictly need. The extra work of transferring financed panels can drive buyers away.

Solar makes the most sense when you're buying for the long-term savings on your energy bill, not for resale value. Be sure to look into government incentives for solar—grants, low-cost loans, and tax credits can significantly accelerate your breakeven point.

Why Buyers May Want Solar Panels

Buyers may prefer homes with solar panels for several compelling reasons. They're likely attracted to the substantial savings on energy bills, a benefit that starts immediately upon installation. Beyond financial incentives, they might also align with the values of solar panels, which help contribute to environmental sustainability and offer energy independence. Paired with the use of sustainable building materials, a solar-equipped house can offer tremendous efficiency.

Savings on Energy Bills

Homeowners who install solar panels are likely to see significant savings on their utility bills, ranging from 5% to 20% on the lower end to as high as 90%. Those savings could represent thousands of dollars each year for homeowners living in Alberta, where electricity prices are considerably higher than the national average.

This reduction in monthly utility bills is one of the main reasons why solar panels add value to a property. Buyers are attracted to homes with installed—and especially fully owned—solar systems because they anticipate lower energy costs, making these properties more appealing in the real estate market.

The savings on energy bills are substantial over time. Solar energy offers a stable alternative, protecting homeowners from unpredictable increases in energy costs. Moreover, solar energy is a clean energy source. By choosing homes with solar panels, buyers support environmental sustainability while also securing financial benefits.

Better For the Environment

Solar panels represent a significant step toward environmental sustainability, markedly reducing a home's dependency on fossil fuels. Most of Calgary's best master-planned communities—a type of neighbourhood exploding in popularity—offer sustainable features. In some cases, solar panels come standard on all homes!

By generating clean, renewable energy, these installations play a pivotal role in combatting climate change, slashing greenhouse gas emissions that traditional energy sources emit. Homeowners and buyers alike are increasingly drawn to these environmental benefits.

Putting it into perspective, over 80% of buyers believe energy-efficient features are important in their housing choices. Though solar panels will increase the cost of building a house in Calgary, those willing to make the initial investment will see savings over an extended period.

Energy Independence

Energy independence ranks high on the list of reasons people are drawn to homes with solar panels. As utility costs climb, more homebuyers turn to solar power as a solution.

Investing in solar reduces reliance on unpredictable energy markets and promises considerable savings on electricity bills. Homes equipped with solar energy systems can also appeal to those who prioritize self-sufficiency. These properties offer a hedge against future energy price hikes, making them particularly attractive in regions with escalating utility rates.

Factors That Influence Solar Panel Value

Before investing in solar panels, you should know that several factors can impact how much value you'll be able to add. The climate and position of the panels on the roof can either optimize or reduce the system's efficiency, affecting overall energy production. Just as importantly, you'll want to consider the age and condition of the panels, coupled with regional energy costs.

Climate

Local climate conditions play a pivotal role in the effectiveness of solar panels, significantly impacting their energy production and the subsequent increase in home value. In sunnier regions, solar panel systems can thrive, maximizing energy output and offering greater savings on electricity bills.

Calgary is the sunniest city in Canada, so homeowners here have extra incentive to go solar.

The value added by a solar panel system isn't just about the solar potential in optimal conditions; broader weather patterns also play a significant role. For example, areas with fewer cloudy days annually experience more consistent solar energy production. This reliability can significantly reduce homeowners' reliance on traditional power sources, leading to substantial savings over time.

Position on Roof

The placement of solar panels on a roof significantly impacts their efficiency and a home's market value. South- or west-facing roofs with minimal shading maximize energy output, making the property more appealing to buyers in regions with high electricity costs.

Homes in West Calgary are excellent candidates due to their elevated city location, which provides mountain views and sun exposure. A well-positioned system can turn solar into a standout feature, enhancing both savings and sustainability.

Age of Panels

As solar panels age, their efficiency slowly declines, affecting their contribution to home value. Newer installations with longer warranties are more attractive, offering higher energy output and fewer replacement concerns.

However, there's a common misconception that solar panels "expire" after 25 to 30 years. That's the warranty, not the lifespan. A 25-year-old panel may still produce 80–90%+ of its original output, and will likely continue doing so for years. (Some of the first modern solar panels from the late 1980s and early 1990s are still producing more than 80%!)

If you're shopping for new-construction homes or building a custom home, consider installing solar panels during construction or upon purchase to get the most value.

Condition of Panels

Beyond age, the condition of solar panels influences their impact on home value. Well-maintained systems with documented upkeep and performance metrics reassure buyers and enhance marketability. Neglected or damaged panels, however, can deter interest due to potential repair costs.

Luckily, solar panels are very low-maintenance. There are no moving parts to wear out, and rain and snow are usually sufficient to keep the panels clean. They're also tougher than you might expect; for example, they're engineered to withstand hailstorms without issue.

Energy Costs in the Area

Higher electricity rates make solar-equipped homes more attractive due to substantial long-term savings. As utility prices rise, buyers see greater value in solar installations, which reduce energy expenses and align with sustainability trends.

Government incentives can further enhance the financial benefits of owning solar.

Ownership

Homeowners who own their solar panels have the fewest hurdles to overcome during a sale. The panels count as fixtures, just like the HVAC and built-in appliances. Buyers simply purchase the house and reap the benefits.

Financed and leased systems aren't as valuable and can complicate home sales. Most buyers don't want to take over payments and contracts.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

See if Solar Panels Are a Smart Investment for Your Home

Solar panels have the potential to boost home values and make a home stand out in a competitive market; they can also attract eco-conscious buyers, leading to faster-selling properties. However, it's important to be realistic about resale value. If you're selling in just a few years, you probably won't recoup your costs.

On the other hand, if you're buying panels for the energy savings rather than resale, there's a strong case for the financial benefits of long-term ownership. Investigate the possibilities for your specific property. If the numbers make sense, you could reap the rewards for decades.