Can Solar Panels Increase the Resale Value of Your Maryland Home?

In This Guide: We discuss factors that help homeowners accurately assess the impact of solar panel installations on their home’s potential resale value. With the right solar panels, homeowners can reap immediate savings while creating long-term financial benefits that make it easier to sell their property later.

As utility prices continue to climb, Maryland homeowners wonder if they can offset rising bills with home improvements. One of the most popular incentives is a solar panel installation. In Maryland, demand is driven by the state’s solar carve‑out, its state‑sponsored incentives, and the Solar Renewable Energy Credit (SREC) market. Homeowners are also motivated by the opportunity to lower future energy costs. This demand can translate to higher home resale values in Maryland, depending on certain factors.

What Is the Impact of Solar Panels on Resale Value?

According to data collected from Zillow’s home sales records, solar system installations increase home values, but the potential range is wide, from 1.7% in Nebraska to 9.2% in Michigan. Maryland is among the highest, with a 7.7% average resale price increase for solar-powered real estate.

Compare these results with Zillow’s 2019 data, which showed a national average resale price increase of 4.1% for homes with solar panels. The increase in value suggests that demand for solar is rising as the technology improves, its benefits become better known, and individual states provide incentives for homeowners to upgrade, potentially shortening their payback timelines.

Essential Takeaway

Solar panel systems have a tangible impact on resale value, on average, due to increased demand for energy-efficient real estate, better technology, and more accessible state-sponsored incentives, such as the SREC market. While the SREC market does not directly impact resale value, it can make your resale timeline more flexible by providing extra income and giving prospective buyers another reason to choose a solar-equipped home.

Factors That Influence Return on Investment for Solar Panels

While solar panels increase property values on average, multiple factors determine the real-world value increase homeowners will experience. The main factors include:

1. Location: Solar systems are not valued equally across regions. In some rare instances, solar panels can slightly reduce home values, rather than add to them. However, in Maryland, the climate provides abundant sunlight, which helps panels produce more power and shorten payback times.

Note: Cloud cover can reduce power production, but cold temperatures can increase panel efficiency. Local solar panel installers can help you learn more about how Maryland’s climate will impact solar production in different seasons.

2. Local Solar Prices: Solar panel prices vary by region, labor costs, material prices, and other factors. In more expensive regions, selling a home with solar panels can be both easier and more profitable since demand is higher and the value added to the property is more noticeable.

3. System Type: Systems with higher-quality PV cells, better roof orientation, larger output, and a battery backup are often worth more, adding more value to the home.

4. Installation Date: Older systems may be depreciated, reducing their sale value. Additionally, older systems may need to be repaired, serviced, or replaced before listing the home to make sure the solar system adds maximum value and functionality to the property. 

5. Replacement Value: Depreciated systems will have a lower replacement value, but the installation date is not the only factor. Systems with more expensive materials or a greater number of defective parts will have a higher replacement value, lowering the value the system adds to the sale.
   
6. Local Incentives: More local incentives mean more opportunities for homeowners to use a solar system to earn extra income and shorten their payback timelines. For buyers, these incentives imply future value beyond the system itself.

Note: Maryland residents have access to several incentives to increase the value of their solar systems, including the SREC market. Using net metering, utility providers track the solar system’s energy production and credit homeowners for the excess energy, making solar-equipped homes more attractive and competitive for buyers.

7. Ownership Status: Solar panels can be financed in different ways, each with advantages and disadvantages to the resale process. While a solar lease payment can be transferred to a new owner, the company would own the system, not the homeowner, so incentives such as SREC sales would not apply. Solar loans can also be transferred, which would transfer ownership and responsibility for the monthly payments.

Note: Solar installations purchased with cash add the most value to home resales, as the new owner has full control over the system without additional lease terms or payments.

Local Installers Help Maryland Homeowners Maximize Their Property Value

At Energy Select, our team designs and installs energy-efficient solar arrays for Maryland homeowners. To maximize resale impact and make the most of your investment, our team conducts a thorough on-site solar assessment to identify the type and orientation of the solar array that will deliver the highest ROI in your situation. We offer same-day solar quotes, so you can always make the right solar investment decision for your situation.

Contact our team and schedule a consultation to learn more about how solar panels can increase the value of your Maryland home and how our local team can help.