Skip to main content
Press Enter

Why Homeowners Go Solar

Homeowner Real Estate Solar Green home diversity

Homeowners invest in solar panels for many reasons — including energy independence, lower utility bills, a reduced carbon footprint, and more. The solar system’s impact on home value is usually not the primary reason to invest in solar, but it is still a critical factor reinforced by solar contractors to close the deal. After all, purchasing a solar system is one of the most significant investments homeowners make in their homes.

But is it true? Does solar actually build equity in your home? In general, yes. In 2015, Lawrence Berkeley National Laboratory released a report that showed national premiums for rooftop solar installations netted between $4-$5/watt. In 2019, Zillow released findings that showed solar panels increased a home’s sales price by an average of 4.1%.

But in practice — on an individual transaction basis — far too often the answer is no.

Take the case of K.T., a homeowner in Arizona. His appraiser declined to add value to the home because of an outstanding solar loan on the owned system, even though the impetus for the appraisal was to obtain a cash-out refinance to pay off the solar loan. Or Max P., an Arizona homeowner who spent $45,000 on solar panels and batteries on a fixer-upper. When he refinanced in early 2021, the appraiser didn’t assign any value to the renewables. Or Cait H., a Virginia homeowner, who refinanced their home in 2021. The appraiser assigned no value to the solar panels on the roof and refused to adjust the finding even when presented with a review by a second appraiser that found a number of flaws in the appraisal.

In the words of a solar contractor that recently contacted Pearl: “We have had a few clients walk away from solar because their real estate agents are telling them it adds no value to their homes and would not be a worthwhile investment.” Are those agents wrong because of an LBNL study or a Zillow study? Or are they correct, based on what they have seen in their marketplace? To help answer that question, let's explore some common reasons that a solar system’s value isn't captured.

Why Solar Value Gets Lost During the Real Estate Transaction

Solar home real estate marketing selling solar
  1. Confusion about how the system is financed. While there are many factors that impact a homeowner’s decision to buy or lease, it’s important to understand and educate the homeowner regarding future ramifications. For example, if the panels are leased or installed with a Power Purchase Agreement (PPA), lenders take the position that because they are owned by a third party, they should not be considered in the appraisal. Even when systems are owned, appraisers may consider the system personal property if they were purchased with a solar loan secured by a UCC-1 filing (which is roughly analogous to a lien), since the system could be repossessed in the event of a default.
  2. Lack of installation information and documentation. It may be obvious that there are panels on the roof, but in the majority of transactions, home sellers are not given the details needed to “prove” the value of their investment. Details like the size of the system, manufacturer, age, inverter type, history of power production, financing, and ownership are often not shared with the homeowner. “I can’t tell you how many times I ask for information and don’t get it,” says Maria Nucci, a New Jersey-based appraiser. “I interviewed a homeowner recently about a refi and asked if there was anything unusual about the property, and he didn’t even mention his solar panels. He didn’t know if he owned the system. I asked about paperwork and he said ‘I don’t know.’”

  3. Inexperienced professionals. While research proves that PV solar systems add value and are a desired homebuyer feature, most agents and appraisers are unfamiliar with solar. “Real estate agents can be intimidated by solar,” says Pamela Brookstein, from the Chicago-based nonprofit Elevate, which offers training on selling solar and energy-efficient homes to real estate agents across the U.S. “They usually don’t know anything about it, and they have limited time to learn.” And while training for appraisers is available, many appraisers have not taken it. That problem is made more serious because lenders don’t even know that there is a difference between appraisers being competent for solar versus those that are not. As a result, lenders will often commoditize appraisers in much the same way that homeowners commoditize contractors — their thinking is that they are all the same. Currently, there isn’t an industry evaluation standard, and many professionals don’t understand how solar works or lack the training to sell or value the panels properly. The result is that home sale professionals typically ignore solar during the sale and appraisal transaction.

What Contractors Can Do to Safeguard Customers’ Investments in Solar

As a solar expert, we know that quality, customer service, and reputation are your competitive calling cards. But even the most service-oriented contractors don’t know what they don’t know. Here are three tools and industry guidelines now in the marketplace or slated to debut soon that you can employ to safeguard your customers’ investments.

Solar contractors high five
  1. Sign up for updates regarding legislation like the SAVE Act and home registries like RESNET, GBR, and Pearl that are working to make data more widely available in the MLS so agents and appraisers can more accurately find comps.
  2. Recommend appraisers use tools like the Pearl Solar Equity Calculator® to estimate discounted cash flows for use in an income-based approach to determine valuation.

  3. Consider joining the Pearl Network to offer customers solar certifications that capture home-specific data at the time of installation and make it easy to share electronic documents with appraisers and real estate agents.

“I was super excited to see that there was a third-party evaluator like Pearl because there’s a huge value in having an unbiased opinion,” says Max P., an Arizona homeowner. Max's initial appraisal for his solar home came back at $535,000. Less than a month later, he had it reappraised — this time with a Pearl Solar Certification attached. "After getting our home Pearl Certified, we saw a $30,000 jump in the appraisal value — from $535,000 to $565,000,” Max says.

While solar is a burgeoning market, there’s still a lot of education and collaboration that needs to happen to ensure the homeowner-to-homebuyer cycle works in concert. “Energy-efficient, high-performing homes have lots of valuable features that aren't readily visible, which often leads to inaccurate appraisals,” said Pearl Agent Jacob Watkins in a recent Real Estate Success Story. “That's where Pearl really steps in with solutions because they bring all those hidden gems to light.”

After getting our home Pearl Certified, we saw a $30,000 jump in the appraisal value — from $535,000 to $565,000.

Max P. Pearl Certified Homeowner — Arizona

Join the Pearl Network.

Only Pearl Network Contractors are authorized to offer Pearl Certification — and only contractors who have demonstrated exceptional quality and service are accepted into the network. Call 1.844.PEARLØØ or complete the form to learn how joining the Pearl Network can drive leads, close more opportunities, and set you apart from the competition.


Pearl Certification is transforming the housing market. We’re making a visible difference nationwide for homeowners and the businesses that serve them.