The Impact of Solar Panels on Fresno Home Appraisals: Are They Worth the Investment?
Catherine Sawatsky | October 6, 2026
Home Selling & Home Improvement
Catherine Sawatsky | October 6, 2026
Home Selling & Home Improvement
With Fresno's hot summers and long stretches of sunshine, solar panels have become a common feature on homes throughout the Central Valley. For homeowners, solar can mean lower electricity costs, greater energy independence, and a more energy-efficient home. But what happens when you decide to sell?
One of the most common questions Fresno homeowners ask is whether solar panels actually increase a home's appraised value. The answer is more complicated than simply adding the cost of the system to the home's value. Solar can contribute to a home's marketability and value, but the impact depends on several factors, including ownership, system age, energy production, financing, comparable sales, and how buyers in the local market respond to the feature.
Solar panels can contribute value to a home, but there is no universal dollar amount that an appraiser automatically adds for having solar.
Current Fannie Mae appraisal guidance specifically identifies solar photovoltaic systems and solar panels as energy-efficient features that should be addressed in the appraisal. However, the guidance also states that appraisers cannot make a mechanical dollar-for-dollar adjustment based solely on the installation cost or projected energy savings. The appraiser must consider how the market actually reacts to the feature. That distinction is important. If you spent $40,000 installing solar, that does not necessarily mean your home's appraised value automatically increases by $40,000.
The value comes from the market's response to the entire package.
Research from Lawrence Berkeley National Laboratory has found that buyers have historically paid premiums for homes with photovoltaic systems.
One widely cited Berkeley Lab study of California home sales found average premiums of approximately $3.90 to $6.40 per installed watt, with most results clustering around $5.50 per watt. The study also found that premiums declined as systems aged.
A later multi-state Berkeley Lab study involving more than 22,000 home sales found that buyers consistently paid premiums for homes with PV systems, with an average premium of approximately $15,000 for an average-sized 3.6-kilowatt system in the study period. These studies provide useful historical evidence, but they should not be treated as a guaranteed formula for today's Fresno market.
Today's solar technology, electricity rates, financing arrangements, battery storage, and buyer expectations are different.
One of the first questions a buyer, lender, and appraiser may need answered is:
Who actually owns the solar system?
There is a major difference between a homeowner who owns the panels and a homeowner who has a third-party solar agreement. If the system is owned outright, the solar installation is generally part of the property being sold. If the system is leased or subject to a power purchase agreement, the situation is different.
Fannie Mae's current appraisal guidance states that solar panels leased from or owned by a third party under a power purchase agreement or similar arrangement must be treated as personal property rather than included in the appraised value of the real property. That doesn't necessarily mean leased solar is a problem.
But it does mean buyers and sellers should understand exactly what agreement is attached to the property before entering into a transaction.
If you have a solar loan, lease, or power purchase agreement, gather the paperwork before putting your home on the market.
Important information may include:
The California Public Utilities Commission also warns that selling a home with a solar lease or PPA can involve additional costs if a buyer does not want to assume the agreement.
Having this information ready can make the transaction much easier.
Imagine two Fresno homes that are otherwise very similar. One has a newer, fully owned solar system. The other does not.
If comparable homes with similar solar systems are selling for more, those sales can provide useful evidence of contributory value. This is why comparable sales matter so much. An appraiser isn't simply asking, "How much did the homeowner spend on solar?"
The more important question is:
How much are buyers actually willing to pay for a home with this type of solar system?
Fannie Mae's appraisal guidance requires consideration of energy-efficient features in the sales comparison process and allows appraisers to use other approaches when appropriate, while still requiring analysis of actual market reaction.
A brand-new solar system and a system approaching the end of its useful life should not necessarily be viewed the same way. As solar equipment ages, buyers may have questions about:
Older panels may still provide substantial benefits, but the market's reaction can depend on the system's condition and remaining life.
If you're selling a home with older solar, having maintenance and production records available can help provide context.
A listing that simply says "solar panels" doesn't tell a buyer very much. A stronger presentation explains what the system actually does.
Useful information may include:
California's Energy Commission also requires solar assessment documentation for qualifying new construction, including verification of solar access and shading conditions. For resale purposes, documentation can help buyers better understand the system they're purchasing.
Fresno homeowners understand how much air conditioning can matter during the summer. Energy efficiency can therefore be an important part of the overall home-buying conversation.
However, solar should be considered as one part of a home's energy profile rather than the only feature that matters.
Buyers may also pay attention to:
A home with solar and other energy-efficient improvements can present a more complete energy-efficiency story.
If you're considering installing solar today because you plan to sell several years from now, don't base your investment decision on an older homeowner's experience. California's current rules are different from the earlier Net Energy Metering structure.
The California Public Utilities Commission explains that customers applying for interconnection on or after April 15, 2023 generally fall under the newer Net Billing Tariff, also known as the Solar Billing Plan. Under this structure, electricity used directly in the home offsets energy costs, while exported electricity receives compensation based on its value to the grid rather than the traditional retail-rate credit. The CPUC notes that battery storage can help customers maximize savings under the current structure by storing solar energy for later use.
That means homeowners considering solar should evaluate the economics of their specific system rather than assuming older net-metering benefits still apply.
Another common misconception is that adding solar automatically means your property taxes will increase by the value of the system. California has a specific active solar energy system exclusion from property tax assessment.
The California Board of Equalization explains that qualifying active solar energy systems installed on existing structures generally are excluded from assessment, meaning installation does not increase the existing property's assessed value. The current statutory exclusion is scheduled to sunset January 1, 2027, so homeowners should verify the rules in effect when installing a system.
This is different from a real estate appraisal.
Property tax assessment and market value are not the same thing.
A solar system can be excluded from certain property tax assessments while still contributing to a home's marketability or value in a sale.
This is where homeowners should be careful. Installing solar shortly before selling does not guarantee that you'll recover the entire installation cost through a higher sale price. If you're considering solar primarily as a resale strategy, look at the numbers carefully.
Consider:
Solar can provide value while you own the home through reduced electricity costs, even if the eventual appraisal adjustment doesn't equal the original installation price.
The investment decision should therefore be based on both ownership benefits and potential resale benefits.
If you're getting ready to list a Fresno home with solar, don't wait until the appraisal is scheduled to start gathering documentation.
Create a solar information file containing:
You’ve got questions and we can’t wait to answer them.
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