Do Solar Panels Increase Home Values?

Are you wondering whether solar panels increase home values or impact the value of surrounding land? If you plan to install a solar project on your land, read on to determine how this might affect your property’s value.

Whether you’re a homeowner, a rural farmer or a commercial property developer, you will be interested to know whether solar panels increase property values.

In this guide, I’ll give you the information you need to figure out whether installing a solar panel system is a worthy investment. I’ll cover energy efficiency, possible savings on bills, whether solar properties are harder to sell, and everything in between.

It doesn’t matter whether you’re after unbiased advice or some guidance on purchasing a property – I’ve got you covered.

Before I get started, it’s important to note that I’ll be approaching this article from two different angles: residential and commercial. If you’re a homeowner, keep reading right here. For landowners, click here.

Now, let’s dive in.

Do Domestic Solar Panels Increase Home Values?

If you’re wondering whether solar panels increase home values, the answer is yes – on multiple fronts. Let’s explore how adding solar panels can boost your home’s value, from improving energy efficiency to providing long-term cost savings.

Solar energy is becoming more desirable to buyers. With government incentives and rising energy costs, investing in solar panels is a smart decision to boost your property’s value.

They save energy and increase energy efficiency

If you’re trying to figure out whether solar panels increase home values, energy efficiency should be one of your considerations.

Solar panels can significantly improve a property’s overall Energy Performance Certificate score, making it more desirable to potential buyers. Plus, you can’t beat the lower energy bills that come around with a higher EPC rating.

Having solar panels in your home can boost its energy efficiency by up to two levels (or 15 points).

This is more desirable than you might think.

Not all buyers will initially see the value of solar panels. But the government is pushing for all buildings to be rated ‘B’ on the EPC scale by 2030. For this reason, solar panels could increase your home’s value by 0.9 to 2 per cent.

In addition, a study by Admiral Money reveals that solar panels can boost home values by as much as 25 per cent.

So, there’s certainly a lot to love about them.

They save you money

If you’ve boosted your home’s energy efficiency using solar panels, you’re likely to save a decent amount on your energy bills.

On the average three-bedroom house, you can expect to save around £362 per year from having solar panels. You’ll also make approximately £158 from the Smart Export Guarantee. Overall, that means you could save a whopping £520 on your energy bills every year. Now, that’s something to shout about.

If you buy a home with existing solar panels, you’ll avoid the upfront installation costs, which typically run around £7,000. So, you’ll benefit from reduced energy costs without having to worry about paying for installation yourself.

Solar-equipped homes can also sell for more, depending on the buyer you’re targeting. This is because solar panels are considered upgrades to a property (much like extensions, conservatories or other home improvements). While individual results may vary, most buyers can appreciate the long-term cost savings from a row of solar panels.

They’re attractive to renters and buyers (the right ones)

Building on what I just mentioned, the right renters are willing to pay up to 13 per cent more for a low-carbon, energy-efficient property. This is particularly relevant given the ongoing energy crisis, partly caused by the Ukraine war.

As of December 2024, the average monthly rent in London was £2,220. So, any significant energy savings are a huge benefit. For landlords, a 13 per cent increase in this figure would bring their overall rental income to an impressive £2,510.60. So, this potential extra income is certainly nothing to sniff at.

Aside from renters, buyers are also happy to pay around 20 per cent more for homes with better energy efficiency than competing properties. With solar panels taking many properties to a B rating and above, it’s a worthy investment. As net-zero limits are looming, this figure is only set to rise.

It depends on the generation

While solar panels appeal to many people, they’re not for everyone.

From my research, there is quite a significant generational gap in terms of solar panel approval. While 74 per cent of Millennials and Gen Z said they were willing to rent a property with solar panels, only 65 per cent of Boomers were willing to.

While this isn’t a massive difference, it does show that the younger generations are more open to energy-saving home improvements.

However, it’s worth mentioning that 69 per cent of National Home Energy Survey respondents stated that they’d buy a house with solar panels. This is up 65 per cent from the previous year, so opinions are slowly shifting.

What About Landowners Considering Large-Scale Commercial Solar Farms?

If you’re a landowner in a region with potential for solar development, you may be sitting on a valuable opportunity to generate extra income. Many rural areas are now seeing investment in large-scale commercial solar farms, giving landowners the chance to lease their land for these projects.

While there might be concerns about the aesthetic impact of solar farms, the lower land values in these rural locations often make solar and wind projects more acceptable. With significant potential returns, it’s worth exploring how these developments could benefit your land and overall income.

There’s a chance to make extra income if you’re you’re in an area already suitable for solar development

When it comes to non-residential properties, most landowners want to make additional income from their land. After all, there’s no point in leaving it sitting pretty if you’re not using it.

As a result, many rural developers have invested in large-scale commercial solar farms. While some may view solar farms as an eyesore, the generally lower land values in these rural areas mean there’s often less opposition to using land for solar or wind projects.

For this reason, many landowners will benefit from having solar panels installed on their land. These projects can generate an impressive income (and offer an ROI of around 10 to 20 per cent), making them worth considering.

For developer-built projects, any increase in land value largely depends on the lease in place. For landowners financing their own solar farms, the value of their investment largely relies on the Power Purchase Agreement (PPA) that’s in place with their energy off-taker.

However, regardless of the deal, solar farms are a high-income-generating asset for rural communities. The only notable impact on property values is typically seen in homes near sites that were previously used for agriculture, where there’s an average 3 per cent decrease in value.

In short, solar farms are a net positive!

They tend to have less impact than you’d think

One of the main questions from landowners relates to how intrusive or impactful solar farms might be. While solar farms won’t be completely separate from your day-to-day operations, they have less impact than you’d think. And that relates to both operational implications and the effect on property values.

This is confirmed by property appraiser Richard Kirkland, who explains that many factors influence the impact of a solar project:

Among the many problems with drawing conclusions from such a small difference is that there are many factors at play, including the desirability of the house and the features of the land. The presence of a solar project is one of those factors, and it’s difficult to say how much weight it has.

Kirkland also emphasises that solar projects don’t tend to lead to a pattern of negative effects on surrounding property prices.

So, if you’re wondering whether solar panels will increase or decrease home values, the overall impact tends to be minimal. This makes them a relatively low-risk investment.

Could Solar Panels Decrease Property Values?

They may be an eyesore

We couldn’t write an article on whether solar panels increase home values without mentioning their physical appearance.  Many residents near potential solar projects worry they will devalue the entire area because they’re so large. Although this is only sometimes the case, large-scale solar farms (or rows of panels on homes) may reduce the amount a buyer will pay for a property. 

We’ll say that this is mainly applicable to the Not in My Backyard (NIMBY) crew, but even regular residents worry about property values diving.  Many people are also generally annoyed about the increased presence of solar farms in their local area. For example, there’s been an outcry about Red Barn Solar Farm in Wiltshire. 

The Gazette and Herald state that:

The proposals have been met with anger by some residents who are concerned the development will be an “eyesore” that blights the village.

The residents oppose the panels for different reasons, but many feel that the look of the panels makes the village less attractive. While this is impossible to prove in an absolute sense, it’s certainly worth thinking about. Plus, there’s nothing more worrying for local residents than uncertainty about property prices.

Maintenance costs

While solar panels are generally low-maintenance, there is a chance that you’ll need to pay for upkeep during their lifespan.

An average solar panel service costs between £100 and £200, but this doesn’t necessarily need to be done yearly.

In my book, maintenance costs certainly don’t decrease property values. However, you’ll need to work the cost of upkeep into the final selling price of your property.

After all, it adds up.

They take up a lot of space

The final thing to think about in this rundown of whether solar panels increase home values is space.

While roof-mounted solar panels take up minimal space, entire solar farms take up a lot of acreage. The average space required for a solar farm is usually a minimum of 25 acres of land for every five megawatts of installation capacity.

Smaller projects require a touch less, with 10 acres being average. However, solar farm land requirements can be strict, so you’ll usually need a lot of spare land to play with.

The problem with this is that large solar farms may limit the use of land for other purposes, particularly in rural areas where open space is often a key selling point. If you’re considering installing solar on your land or near your property, the space it takes up could be a concern for potential buyers or renters who value land for agricultural or recreational use. As a result, the land being occupied by a solar farm might not be as attractive, which could lead to a decrease in property value.

So, Do Wind Turbines Decrease Property Values? Well, It’s a Mixed Bag

Solar panels can boost a property’s value by as much as 25 per cent but estate agents have also said that they can put off certain buyers. Whether this is fair is tricky to say, but some buyers simply don’t appreciate the look of solar panels.

However, it’s worth mentioning that with new environmental legislation, property owners will be forced to go green. For many people, low EPC ratings are an immediate red flag, and as I mentioned, solar panels will boost EPC ratings.

While there can be slight decreases in property values, studies rarely consider solar development’s financial incentives. For property owners, this could mean lower utility bills or payments from the solar farm developer. For communities, residents could benefit from reduced taxes.

Ultimately, it’s down to you to decide whether solar farms increase home values – because, realistically, it’s not all about the money.

FAQs

Do solar panels on the front of a house devalue it?

Homes with solar panels on them can sell for more than those without them, as buyers love an eco-friendly purchase. Plus, you can’t deny that they help buyers to save on energy bills.

How often do you need to clean solar panels?

It’s generally a good idea to clean solar panels once a year. While this isn’t a hard and fast rule, many panels can accumulate debris over the winter months. It is a good idea to clear this buildup before spring arrives to ensure optimal performance.

Can you hear solar panels?

As a rule, you shouldn’t hear noise from your solar panels during the day or night. They’re generally quiet.

There You Have It: The Ultimate Rundown on Whether Solar Panels Increase Home Values

If you’d like to learn more about installing a solar project on your land, contact the team at Lumify Energy. We’ll be happy to run you through options for mounting solar projects on your property and discuss just how much you could stand to make.

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