Solar Panels & Home Value: What Central California Homeowners Need to Know

Considering solar panels for your Central California home? You’re not alone. Energy efficiency is a growing priority for homeowners, and solar power offers significant savings. But beyond the monthly utility bill, how do solar panels truly impact your property’s value when it’s time to sell?

At Century 21 Jordan-Link & Co., your trusted local realtor in Central California, we’re here to provide clarity. This guide breaks down how solar panels can boost your home’s worth and what you need to know, whether you’re buying or selling a solar-equipped property.

Do Solar Panels Really Increase Home Value?

Yes, they often do! Numerous studies show a positive correlation between solar panel installations and increased home value. According to a 2019 Zillow Economic Research report, homes with solar-energy systems sold for an average of 4.1% more than comparable homes without solar power. For a median-valued home, that can translate to an additional $9,274 or more.

The adoption of solar power is rapidly expanding across the U.S., with Pew Research indicating that nearly half of all homeowners are considering residential solar. High demand naturally makes a property more attractive, potentially leading to faster sales and higher offers.

Location Matters, Especially in Central California

While solar panels offer benefits nationwide, their impact on home value can vary significantly by region. In sun-rich areas like Central California, where energy costs can be a significant factor for homeowners, solar panels often provide a greater boost to property value. The strong demand for energy-efficient homes in our local market means buyers are often willing to pay a premium for properties that already have solar installed.

As your local realtors in Visalia, Porterville, Bakersfield, Hanford, and Fresno, we’ve seen firsthand how an owned solar system can differentiate your listing and attract eco-conscious buyers in our communities.

Owned vs. Leased: What Buyers and Appraisers Look For

This is a critical distinction that directly impacts whether your solar panels add value to your home’s appraisal. When you sell, the appraiser has the final say on the home’s worth, and their assessment of the solar array depends heavily on its ownership structure.

According to Fannie Mae appraiser guidelines, the most common scenarios include:

Owned Panels: If you fully own your solar panel system, it can be included in the appraised value of the property. These are considered a permanent improvement, similar to a new roof or a renovated kitchen.
Leased Panels or Power Purchase Agreements (PPAs): If your solar panels are leased or covered by a PPA, they typically may not be included in the appraised value of the property. In this scenario, the solar system is generally considered personal property of the solar company, and the lease must either be paid off or transferred to the new buyer.
Financed as Personal Property: If the solar panels are financed as personal property (with the panels serving as collateral for the loan), they will not increase the value of the home’s appraisal.
Financed as Fixture to Real Estate: Panels financed as fixtures (permanently affixed to the property) can be used in the appraisal, but only if they cannot be repossessed if the seller defaults on the financing agreement.

Practical Tips for Central California Homeowners

Whether you’re looking to sell a home with solar or buy one, here are some key considerations:

For Sellers with Solar:
- Own Your System: If possible, owning your solar system outright will yield the greatest return on investment and simplify the selling process.
- Have Documentation Ready: If you have a lease or financing agreement, be prepared to provide all terms and energy savings data to potential buyers and their lenders. Clarity smooths the transaction.
- Highlight Savings: Emphasize the long-term energy cost savings to prospective buyers.
- Get a Local Market Analysis: Consult with a local realtor from Century 21 Jordan-Link & Co. to understand how solar specifically impacts values in your neighborhood.
For Buyers Considering Solar Homes:
- Ask About Ownership: Always clarify whether the solar panels are owned, leased, or financed.
- Review Lease/PPA Terms: If the system is leased, thoroughly review the terms of the agreement, including monthly payments, escalator clauses, and transferability.
- Consider System Age & Efficiency: Newer, more efficient systems will typically add more value.
- Work with a Knowledgeable Realtor: Your local real estate expert can help you navigate appraisals, financing, and ensure you understand all aspects of a solar-equipped home.

Frequently Asked Questions About Solar Panels and Home Value

Q: Do solar panels really increase a home’s value?

A: Yes, studies show that homes with owned solar panels can sell for up to 4.1% more than comparable homes without solar. They make properties more attractive to eco-conscious buyers and reduce long-term energy costs, especially in sunny Central California.

Q: Is it harder to sell a house with solar panels?

A: No, not if the solar panels are fully paid off and owned. Homes with owned solar systems often sell faster and at a premium price. If the system is leased, having clear documentation and a plan for transfer can streamline the process.

Q: How much value does solar add to a home in Central California?

A: In Central California, solar panels can add an average of $10,000 to $15,000 to a home’s resale value, though this depends on the system size, energy savings, and specific market demand in your immediate area.

Q: What happens to my solar lease if I sell my house?

A: If you have a leased solar system, the lease must either be paid off before closing or transferred to the new buyer. Your realtor can help facilitate this process and ensure all terms are clear.

Q: Are buyers interested in homes with solar panels?

A: Absolutely! More buyers today are actively looking for energy-efficient homes. Solar panels not only lower utility bills but also signal environmental responsibility, making your property stand out in the competitive Central California market.

Key Takeaways for Homeowners:

Solar panels generally increase home value, particularly if owned.
Location and local market demand are crucial, with Central California showing strong interest.
Understanding ownership (owned vs. leased) is vital for appraisal and sale.
A knowledgeable local realtor is essential for navigating solar home transactions.

Ready to explore the value of solar for your Central California home?

Whether you’re looking to sell your solar-equipped property or purchase an energy-efficient home, the team at Century 21 Jordan-Link & Co. has the local expertise you need.

Contact us today for a personalized market consultation! We’re here to help you maximize your property’s worth and make informed real estate decisions.