We often get asked about solar panels and their impact on home value. It’s a smart question, especially in sunny Arizona, where solar seems like a no-brainer. But when it comes to selling your home, not all solar is created equal.
The big difference?
Whether you own your solar system or lease it.
We’ve seen firsthand how the wrong solar setup can turn a potential asset into a significant hurdle during a home sale. Let’s break down the real-world implications of solar ownership versus solar leasing on your Arizona home’s resale value.
The Clear Winner: Owned Solar Systems
When you own your solar system outright, it’s generally a net positive for your home’s value. Think of it like any other valuable upgrade, such as a new roof or a renovated kitchen. It’s an asset that transfers with the property, offering tangible benefits to the new homeowner.
Research consistently shows that owned solar panel systems add measurable value to most homes [1]. Nationally, homes with solar can sell for roughly 3–4% more than comparable homes without solar [2]. In Arizona, some experts estimate that solar installations can increase home value by $1,000 to $1,500 per kilowatt (kW), depending on the system’s age and energy savings. For many Arizona homeowners, this could translate to an increase of $15,000 or more in property value.
Why buyers love owned solar:
- Lower Utility Bills: The new homeowner benefits immediately from reduced or eliminated electricity bills, especially appealing in Arizona’s hot climate.
- No Ongoing Payments: There are no additional monthly lease payments or contractual obligations to assume.
- Equity and Investment: The system is part of the home’s equity, a true investment.
- Reputable Systems: As we often say, if it’s a good quality system with a solid warranty from a reputable company – one you can tell is going to be in business for a very long time, like a Tesla system, for instance – that’s a clear benefit to the new home buyer in terms of really affordable power.
The Potential Pitfall: Solar Leases
This is where we see a lot of confusion and, unfortunately, a lot of headaches for sellers. While a solar lease might seem appealing initially due to no upfront costs, it can become a significant liability when you decide to sell your home.
Leased solar panels generally do not add appraised value to a home [2]. Appraisers view the lease as a contractual obligation, not an asset that belongs to the homeowner. In fact, many appraisers consider the value negligible or even negative.
Here’s why leased solar can be a deal-breaker:
- Transfer Troubles: When you sell your home, the buyer must qualify and agree to assume the existing solar lease. This process can be complex, time-consuming, and often requires the buyer to meet specific credit requirements from the leasing company. We’ve seen too many instances where a buyer loves a home but walks away because they don’t want to take on a long-term lease obligation.
- Aggressive Lease Terms: As we’ve observed, there have been a lot of bad solar companies that have come through and created really unfortunate leases that negatively impact the value of a home. Sometimes, when you add the cost of the lease payment to the actual power consumed, your total power cost can be more than if you didn’t have solar at all. This actively detracts from your home’s value.
- Fewer Offers, Longer Market Time: Homes with leased solar often receive fewer offers and can sit on the market longer. Buyers see the lease as an additional monthly bill and a potential future hassle, rather than a benefit.
- Hidden Costs: Some leases include
escalator clauses, meaning your monthly payments increase over time, making the lease even less attractive to future buyers.
What About PACE Financing?
Property Assessed Clean Energy (PACE) financing is another option for solar installation. While the system is technically owned, the PACE lien transfers with the property and is repaid through property taxes. Some buyers and lenders view PACE liens negatively, as not all mortgage lenders are comfortable with this arrangement [2]. If maximizing resale value is your priority, owning your system outright puts you in the strongest position.
Our Expert Advice for Arizona Homeowners
If you’re considering solar for your Arizona home, or if you already have it and are thinking about selling, here’s what we recommend:
- Prioritize Ownership: If possible, purchase your solar system outright or through a solar loan that you can pay off before selling. This ensures it’s an asset that adds clear value to your home.
- Review Leases Carefully: If you have a solar lease, carefully review the terms. Ask for the last 12 months of utility bills and compare those to your lease payments to understand your total power costs. Be aware of any escalator clauses.
- Work with Reputable Companies: Choose solar installers with a strong track record and good warranties. This provides peace of mind for you and future buyers.
- Consult a Real Estate Professional: Before making any decisions about solar, or if you’re planning to sell a home with solar, talk to a Century 21 Northwest agent. We can walk you through the real numbers, the resale impact, and what buyers actually care about in today’s market.
Future-Proof Your Investments with Century 21 Northwest
Solar energy in Arizona can be a fantastic investment, but its impact on your home’s resale value hinges significantly on whether you own or lease the system. Owned systems are generally a clear advantage, while leased systems can create complications and reduce your home’s appeal to potential buyers.
At Century 21 Northwest, we’re here to help you navigate these important decisions. We believe in empowering you with the knowledge to make smart, financially grounded choices for your home and your future.
References
[1] Opendoor. “Do Solar Panels Increase Home Value? Costs, ROI & What Buyers Really Think.” Opendoor, March 16, 2026.https://www.opendoor.com/articles/do-solar-panels-increase-home-value-costs-roi-what-buyers-really-think
[2] Zillow. “Homes With Solar Panels Sell for 4.1% More.” Zillow Research, April 16, 2019.https://www.zillow.com/research/solar-panels-house-sell-more-23798/
