Do solar panels add to home values? How much & are they worth the investment?

do solar panels add value to your home

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 add value to your home?

But the question of how much do solar panels increase home values 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 you want to include solar panels in your property investment plans, you’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 is somewhere in the range of £3,500 to £7,300. And once you’ve installed these panels, you will likely need to think about storing what’s generated.

Home batteries will allow you to store the electricity produced, maximising your utilisation. But, home-energy storage will easily add around £2,000 to your final bill. 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 265 watts. But there can be huge fluctuations. Some may generate as little as 190 watts. Whereas others could see 363 kWh per year.

Of course, these results are dependent on the sun.

Last year, the UK “enjoyed” 1,530 hours of sunshine. A good year by all accounts, boosted by a “rather sunny summer”. Yet, in places like Greece, Malta, and Spain, locals can expect well over 3,000 hours of sunshine per year. Across the Atlantic, citizens of Las Vegas and Arizona enjoy around 4,000 hours.

are solar panels worth it

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. 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 do solar panels add value to your home will be asked by many more people soon.

It can be difficult to formulate an exact number for how much you’ll save on energy bills with solar panels. There are simply too many variables at play. But the Energy Saving Trust estimates you could save just over £450 per year by installing panels on your roof. Also, you could even sell excess power you’ve generated back to the grid. Pushing your potential returns higher.

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

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

Source: Energy guide, Which?, The Eco Experts, The Met Office, British Business Energy, Statista, The Independent, Ideal Home

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

When it comes to if solar panels add value to your home, we’re faced with a mixed picture. Research from Admiral Money recently found solar panels can boost a property’s value by as much as 25%.

But, estate agents at Petty Son & Prestwich warned that installing solar panels may actually put off your would-be buyers. Limiting your return to a “big, fat zero percent”.

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, many landlords and property investors are already avoiding properties with low EPC ratings.

Installing solar panels is an obvious way to improve your property’s green credentials. By investing in this technology now, along with other potential upgrades such as double glazing, you could see your target market make much more favourable offers.

Estate agents have reported some buyers would be willing to pay a 20% premium on homes with high energy efficiency standards. The average UK house price was £294,000 in December 2022. A 20% premium on this would equate to over £352,000.

Meanwhile, renters may be willing to pay up to 13% more in rent for a low-carbon, energy-efficient property. Average rents in London recently hit £2,480, according to Rightmove. Outside of the capital, they reached £1,172. A 13% increase would amount to £2,802.40 and £1324.36, respectively.

Source: Landlord Today, Express, Mortgage Introducer, RICS, ONS, Commercial Trust, Metro

do solar panels increase home value

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 you with funding in mere days. Allowing you to get the ball rolling on installation plans before demand skyrockets.

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

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

When focusing on the question if solar panels add value to your home, you should also ask yourself what routes can I take. No matter how you want to proceed, we’ll try to match you with an appropriate solution.


MFS are a bridging loan and buy-to-let mortgage provider, not financial advisors. Therefore, Investors are encouraged to seek professional advice.

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