Are Solar Panels Included in Home Appraisals?

Yes, solar panels are included in home appraisals when you own them outright or financed them with a loan that keeps them attached to the property. Leased panels and those under a power purchase agreement are excluded, because a third party owns the equipment. For owned systems, national market data suggests a meaningful premium: Zillow found solar-equipped homes sold for about 4.1% more than comparable homes without solar, and Lawrence Berkeley National Laboratory research put the buyer premium near $15,000 for an average system.¹²

Ownership Is the First Question the Appraiser Asks

Whether your panels count toward appraised value comes down to who owns them. If you paid cash or used a standard solar loan, the panels belong to you and transfer with the house at closing. The appraiser can adjust value upward to reflect them.

Under a solar lease or a power purchase agreement, a third-party company owns, operates, and maintains the system, and you buy the electricity it produces.³ Because the panels are the solar company’s property rather than a fixture of the home, appraisers exclude them. Fannie Mae’s selling guide states this directly: separately financed panels cannot contribute to appraised value unless the financing documents confirm the panels cannot be repossessed if the borrower defaults.⁴

How Much Value Owned Panels Typically Add

Zillow’s analysis of homes sold in 2018 and 2019 pegged the national premium for solar-equipped homes at 4.1%.² On a $400,000 home, that’s roughly $16,400. Lawrence Berkeley National Laboratory research found premiums averaging about $5.50 per installed watt, which worked out to roughly $17,000 for a typical system.¹

These are averages, and local conditions move the number. Premiums run higher in areas with expensive electricity, strong sunshine, and active solar markets. They shrink for older systems near the end of their warranty period, or in areas where utility rates are low. And when comparable solar sales are scarce, appraisers fall back on the cost to install an equivalent new system less depreciation for age and condition; the Department of Energy benchmarks the modeled market price near $3.15 per watt, with actual installed prices closer to $2.50 per watt in recent conditions.⁵

What Can Block Value Even When You Own the Panels

UCC-1 Filings and Solar Liens

When a solar loan is written, the lender usually files a UCC-1 financing statement, a public notice of the lender’s security interest in the panels as collateral. A standard UCC-1 is filed with the state. A fixture filing is a UCC-1 recorded in the county land records with your property’s legal description, and it shows up in a title search.

Mortgage lenders and title companies generally require the UCC-1 to be resolved before closing. If the solar loan is paid off, ask the lender for a UCC termination statement so the lien is formally released. If the loan is still active, coordinate a payoff and release timed to your closing. Fannie Mae requires lenders to review any UCC fixture filing to confirm it doesn’t create a barrier to transferring clear title.⁴

Loan Program Rules

Every major loan program excludes leased equipment from appraised value. The rules for owned systems vary slightly.

FHA loans: The appraised value cannot include any equipment the borrower does not fully own, including leased panels. The lender also reviews the lease terms to confirm they don’t restrict transfer of the property. For owned systems, FHA appraisers describe the installation in the improvements section and adjust in the sales comparison grid when the market supports it.⁶⁷
VA loans: VA purchase loans can cover energy-efficiency improvements including solar, and the sale price cannot exceed the appraised value. The appraiser’s treatment of the system directly affects how much financing the buyer can secure.⁸
Conventional (Fannie Mae) loans: Owned panels can contribute to value. Financed panels with a UCC fixture filing can also contribute if the lender reviews the filing and confirms it doesn’t block a sale. Leased panels are excluded.⁴

System Features the Appraiser Weighs

Not every installation is treated identically. A handful of physical characteristics push the number up or down.

Panel efficiency. Modern residential panels run from about 19.5% to 24.1% efficiency, with mid-range models between 19.5% and 21.5% and premium models reaching 22% to 24.1%. Higher-efficiency panels generate more electricity per square foot, which supports a stronger valuation. Older panels below current standards may take a depreciation adjustment because a buyer could install better equipment for a similar price.

Orientation. South-facing panels in the Northern Hemisphere produce the most consistent output. East- or west-facing systems generate less, especially during peak afternoon hours when electricity is most expensive. Lower projected output means smaller projected savings, and a smaller value adjustment.

Roof condition and system age. If the roof will need replacement soon, the panels have to come off and go back on, and that cost gets subtracted from the system’s value. A newer roof with 15 or more years of life left removes that discount.

Warranty transferability. Many manufacturers offer 25-year performance guarantees that transfer to the new owner. A transferable warranty with significant coverage remaining reduces buyer risk and supports a higher value. Some transfers are automatic; others require paperwork before or shortly after the sale. Confirm the process with your manufacturer or installer before listing.

Documentation to Give the Appraiser

Appraisers work with what they have. Handing over a complete packet before the walkthrough gives you the best shot at full credit.

Installation contract showing system size in kilowatts, panel and inverter make and model, and total cost paid.
Interconnection agreement with your utility confirming the system is tied to the grid.
Twelve months of utility bills from before and after installation, so the appraiser can see actual savings.
Manufacturer and installer warranty documents, with confirmation that they transfer to the next owner.
Proof of ownership. If you financed the system, include the payoff statement or UCC termination.

Fannie Mae offers an optional addendum to its standard appraisal form (Form 1004) that gives the appraiser room to describe green features, record energy savings, and note third-party certifications. Ask whether your appraiser uses it, and get the documents to them early enough to use during the inspection rather than after.

If Your Panels Are Leased or Under a PPA

You have two paths. The first is transferring the agreement to the buyer. Most contracts allow this, but the buyer usually has to meet the solar company’s credit requirements, and there may be a transfer process or fee. The second is buying out the agreement so the now-owned panels can be included in the sale and the appraisal. Most contracts include a buyout provision, though the price varies with how far you are into the term.

Either path takes coordination well before closing. Buyers and their lenders want clarity on whether the panels convey with the property. If you’re transferring, give the buyer the contract terms, remaining payment schedule, and any escalation clauses. If you’re buying out, get the exact payoff amount and timeline from the solar provider so the buyout is complete before the appraiser visits.

1
Lawrence Berkeley National Laboratory. An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices
2
Zillow Research. Homes With Solar Panels Sell for 4.1% More
3
US EPA. Solar Power Purchase Agreements
4
Fannie Mae. Special Property Eligibility Considerations
5
Department of Energy. Solar Photovoltaic System Cost Benchmarks
6
HUD. FHA Single Family Housing Policy Handbook 4000.1
7
HUD. FHA Single Family Housing Appraisal Report and Data Delivery Guide
8
Veterans Affairs. Purchase Loan