Phoenix Solar Homes: How Solar Panels Add Value to Your Home

By Rob Madden

appraisals, home, owned, selling, solar, value

Phoenix, Arizona, has long been known for its sunny climate and booming real estate market. As more homeowners are looking for ways to save on energy costs and reduce their carbon footprint, solar panels have become an increasingly popular addition to Phoenix solar homes. In this article, we will explore the various factors that contribute to the added value of residential real estate with solar panels, as well as the potential return on investment for homeowners considering this eco-friendly upgrade.

The Growing Demand for Solar Energy in Phoenix, AZ

As energy prices continue to rise and environmental concerns grow, there has been a significant increase in the demand for solar energy systems in residential properties. Homebuyers in Phoenix are becoming more environmentally conscious and are seeking ways to save money on their electricity bills. This increased demand for solar panels is driving up the value of homes that have already installed these systems.

Solar Energy Market in Phoenix

Phoenix, Arizona, being one of the sunniest cities in the United States, has a thriving solar energy market. The abundant sunshine makes it an ideal place for solar panel installations, which can harness the sun’s energy and convert it into electricity for household use. As a result, the demand for Phoenix solar homes has been on the rise, with more people looking to invest in properties that come with solar panels pre-installed.

State Incentives and Policies

In addition to the favorable climate, Arizona offers a range of state incentives and policies that encourage homeowners to transition to solar energy. These incentives include tax credits, rebates, and net metering programs that help to lower the upfront cost of solar panel installations, making it a more appealing option for homeowners. This supportive environment further boosts the value of Phoenix solar homes.

How Solar Panels Increase Home Value

There are several ways in which solar panels can increase the value of a residential property. According to the National Renewable Energy Laboratory, every dollar saved on energy bills due to solar panels can increase a home’s value by approximately $20. Furthermore, a study by Zillow revealed that homes with solar panels sell for about 4.1% more than those without them.

Energy Savings

One of the primary reasons solar panels add value to a home is the energy savings they provide. By generating electricity from the sun, solar panels can significantly reduce or even eliminate a homeowner’s reliance on grid electricity. This translates to lower monthly utility bills and long-term savings for the homeowner, making solar homes more appealing to potential buyers.

Environmental Benefits

Solar panels provide clean, renewable energy, which can help homeowners reduce their carbon footprint and contribute to a more sustainable future. As environmental consciousness grows, more homebuyers are attracted to properties with eco-friendly features like solar panels. This increased demand can lead to higher property values for Phoenix solar homes.

Reduced Dependence on Grid Electricity

Solar panels can also reduce a homeowner’s dependence on grid electricity, providing a more stable and reliable source of power. This can be particularly appealing in areas where power outages are frequent or electricity costs are high. In Phoenix, where electricity rates can be volatile, having a solar energy system can be an attractive selling point for potential buyers.

Factors Influencing the Added Value of Solar Panels

The added value of solar panels on a residential property depends on various factors, including the location, local electricity rates, and the quality of the solar panel system.


As mentioned earlier, Phoenix’s sunny climate makes it an ideal location for solar panels. However, the value added by solar panels can also be influenced by local factors such as energy costs, the frequency of power outages, and the availability of state incentives and policies.

Local Electricity Rates

Higher electricity rates can make solar energy systems more attractive to potential buyers, as they can save more money by generating their own power. In Phoenix, where electricity rates can be higher than the national average, solar panels can be a valuable addition to a home, potentially increasing its resale value.

Quality of the Solar Panel System

The quality of the solar panel system can also impact the value it adds to a property. High-quality, efficient solar panels from reputable manufacturers can generate more electricity and provide better long-term performance. This can translate into higher property values for Phoenix solar homes.

Owned vs. Leased Solar Systems

When considering the value of a solar energy system, it’s important to distinguish between owned and leased solar panels. Owned solar panels are purchased outright by the homeowner and are considered an asset that can be transferred with the sale of the property. Leased solar systems, on the other hand, are owned by a third-party company, and the homeowner pays a monthly fee to lease the equipment.

Owned Solar Panels

Owned solar panels tend to add more value to a property, as they provide all the benefits of solar energy without any ongoing lease payments. Homebuyers are generally more willing to pay a premium for a property with owned solar panels, as they can enjoy the energy savings and environmental benefits without having to take on a lease agreement.

Leased Solar Panels

Leased solar panels can be more complicated when it comes to selling a property. Since the solar panels are owned by a third-party company, the new homeowner would need to either take over the existing lease or negotiate a buyout with the solar company. This can be a deterrent for some buyers, and as a result, leased solar systems may not add as much value to a property as owned solar panels.

Solar System Age and Condition

The age and condition of a solar energy system can also influence the value it adds to a property. Newer solar systems, with more efficient technology and longer remaining warranties, are likely to add more value to a home than older systems that may require maintenance or upgrades.

System Age

Solar panels typically have a lifespan of 25 to 40 years, depending on the quality and maintenance of the system. A newer system can provide more years of energy generation for the new homeowner, making it a more valuable asset. Conversely, an older system nearing the end of its lifespan may not add as much value to a property.

System Condition

A well-maintained solar energy system in good condition can also add more value to a property. Homebuyers are more likely to be attracted to a solar system that has been properly maintained and cared for, as it can provide better long-term performance. If you’re considering selling your Phoenix solar home, make sure to keep up with regular maintenance and address any issues with the system before listing the property.

Appraisal Considerations for Solar Homes

When it comes to appraising the value of a solar home, it’s essential to work with an appraiser who understands the benefits and value of solar panels. Appraisers can use various methodologies to determine the added value of a solar energy system, including the income approach, cost approach, and cost comparison approach. The income approach, which estimates the forward-looking value of the energy cost savings, is generally recommended for appraising solar homes.

Appraisers should also consider factors such as the local solar market, electricity rates, and the quality of the solar panel system when determining the added value of a solar home. By working with an experienced appraiser who understands the intricacies of solar energy, you can ensure that your Phoenix solar home is accurately valued.

Selling Your Phoenix Solar Home

If you’re considering selling your Phoenix solar home, there are several steps you can take to ensure a smooth and successful sale.


Prospective buyers will be interested in documentation showing that the solar panel system was installed properly and is saving you money on your electricity bills. Make sure to have records of your solar panel installation, warranty information, and previous utility bills on hand to show potential buyers.

Hiring a Qualified Real Estate Agent

Working with a knowledgeable real estate agent who is familiar with the solar energy market can help ensure that your solar home is accurately priced and marketed to potential buyers. An experienced agent will know how to highlight the benefits of your solar panels and help you navigate the selling process.

Preparing Your Home for Sale

Before listing your Phoenix solar home, make sure to properly maintain and clean your solar panels. A well-maintained solar energy system will be more attractive to potential buyers and can help you achieve a higher sale price.

Purchasing a Phoenix Solar Home

When buying a Phoenix solar home, it’s essential to do your due diligence and consider various factors that can impact the value of the solar energy system.

Solar Panel Ownership

As discussed earlier, it’s crucial to determine whether the solar panels are owned or leased by the homeowner. Owned solar panels generally add more value to a property, while leased solar panels may require additional negotiations or lease transfers during the sale process.

Age and Condition of the Solar System

Inquire about the age and condition of the solar system before purchasing a solar home. A newer system with more efficient technology and longer remaining warranty coverage will likely provide more long-term value than an older system nearing the end of its lifespan.


Solar panels can add significant value to residential real estate in Phoenix, thanks to the city’s sunny climate, supportive state policies, and growing demand for solar energy. Homeowners who invest in solar panels can enjoy energy savings, environmental benefits, and the potential for increased property value when it comes time to sell. By considering factors such as location, electricity rates, and the quality of the solar panel system, homebuyers and sellers in Phoenix can make informed decisions about the value of solar homes in their area. So if you’re a Phoenix homeowner with solar, don’t miss out on the opportunity to maximize the value of your home. Make sure you work with an experienced real estate agent who can help you highlight the benefits of your solar system and properly value your home. Contact us today to learn more about how we can help you sell your Phoenix solar home for top dollar.

Rob Madden

About the author

Rob Madden is an experienced real estate broker in the Phoenix metro area, having worked in the industry for over 28 years. He has helped many home buyers and sellers navigate the local real estate market, and is considered a trusted expert in the field. Rob is committed to making the buying or selling process as seamless and straightforward as possible for his clients, and provides hands-on assistance at every stage of the transaction. In his free time, Rob enjoys being a Scoutmaster for a local Scouts BSA troop, hiking, backpacking, photography, and playing pinball.

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