Do Solar Panels Increase Home Value? How Much & Are They Worth the Investment?

Solar panels are a popular feature for eco-conscious homeowners. They can be a strategic consideration for property investors as they may lower your energy costs. But do solar panels increase home value?

And if so, by how much do solar panels increase home values? This is a tricky one to answer. There are many factors we need to consider. Any increase in value will be affected by the underlying costs involved, demand in the market, and of course – the weather.

If one wants to include solar panels in their property investment plans, they’ll need to balance a complicated equation.

What considerations do you need to take into account?

For any investment, success will be dependent on costs. If bills spiral, profit margins may diminish. Solar panel installation bills will vary widely across the UK, being affected by everything from raw materials to property types.

Generally, though, the average UK cost of a new solar panel installation for a 2-3 bedroom house is somewhere in the range of £8,000 to £12,000[1], according to Check a Trade. Figures from the Energy Saving Trust have the price of a typical 3.5 kilowatt-peak PV solar panel system at £7,000[2].

Meanwhile, the Federation of Master Builders details the average cost of solar panels, including installation and a battery, ranges between £4,850 and £13,000[3]. Evidently, how much one pays will depend on the size of the property involved, and how advanced the actual solar panel system is.

Also, once these panels are installed, owners will likely need to think about storing what’s generated. Home batteries will allow homeowners to store the electricity produced, maximising their utilisation. But, home-energy storage can easily add anywhere between £1,500 and £10,000 to a final bill[4]. Beyond the costs, there are also variations in yield that’ll need to be considered.

It’ll be gut wrenching to install a costly solar panel, only to generate paltry amounts of energy from it. The average solar panel in the UK has power output of around 350 watts[5]. But there can be huge fluctuations. Some more powerful panels may generate as much as 500 watts.

Of course, these results are dependent on the sun.

Last year, the UK “enjoyed” 1,274 hours of sunshine[6]. Yet, in places like Greece, Malta, and Spain, locals can expect well over 2,500 hours of sunshine per year[7].

Demand may still be there

But, despite these potential drawbacks, solar panels could hold a lot of potential for property investors and consumers. Solar panels convert the sun’s energy into electricity, and there is plenty of demand for electricity in the UK.

While consumption has been in decline in recent years, the UK still remains one of the largest electricity consumers in the world, according to Statista[8]. What’s more, with the UK and wider world so focused on going green, we may find ourselves encouraged to use more electricity by the powers that be over the coming years. The question of how much do solar panels increase home value will be asked by many more people soon.

It can be difficult to formulate an exact number for how much one can save on energy bills with solar panels. There are simply too many variables at play. But the Energy Saving Trust estimates between £190 and £310 a year could be shaved off with a panel installed[9]. Also, it’s possible to sell excess power generated back to the grid, pushing the potential savings higher.

While these figures may appear relatively small at first glance, one needs to remember that solar panels can offer more to property investors than their underlying utility.

Solar panels can dramatically affect a property’s value, on top of their ability to save energy, and reduce costs.

In terms of value added – it’s a mixed picture

When it comes to if solar panels increase a home’s value, we’re faced with a mixed picture. Research from The Eco Experts recently found that solar panels can boost a property’s value by as much as 14%[10]. But some would-be buyers may consider solar panels to be “ugly”, which may limit a home’s selling potential.

Despite this, there can be no doubt about the direction the market is heading. Environmental legislation is on the way which will force property owners to prioritise a green agenda. In fact, Ed Miliband, the Energy Secretary, has said it’s “just common sense” to have more homes fitted with solar panels, and plans are in place to force builders to fit them to the “vast majority” of new build homes in England[11].

Installing solar panels is an obvious way to improve a property’s green credentials. By investing in this technology now, along with other potential upgrades such as double glazing, one could see their outlook improve.

In fact, a recent survey of homeowners revealed that many are prepared to pay a 10% premium for properties with eco-friendly features[12]. Meanwhile, according to Handelsbanken’s Property Investor Report 2025, 92% of property investors find that tenants are willing to pay more for greener homes[13].

Specialist finance can support your solar panel investment plans

There’s no getting around it, installing solar panels will likely prove costly. But these costs may only rise from here. Demand is rising for greener options in the property market. Soon, homeowners and property investors may rush to upgrade their homes as new legislation looms.

Those who can move quickly will have the upper hand. Fortunately, specialist finance can help with this – in more ways than one.

Our light development loans can provide property investors with funding in mere days. Allowing them to get the ball rolling on installation plans before demand skyrockets.

Also, our auction loans can help bidders jump on any dilapidated opportunities they find, and bring underutilised spaces into the 21^st century. Or maybe they’ll want to expand on the commercial side of things?

Perhaps they’ll want to invest in a panel manufacturing business and expand their capabilities ahead of anticipated demand. Our commercial funding could allow them to move into a larger production hub, or upgrade equipment.

When focusing on the question of if solar panels increase a home’s value, borrowers should also ask themselves what routes can they take. No matter how they’ll want to proceed, we’ll try to match them with an appropriate solution.