Do Solar Panels Really Add Value to a Home in Chicago?

Over the past year, I've met with several homeowners who believed installing solar panels automatically increased the value of their home by $20,000 to $30,000. While that sounds great in theory, the reality is often much different in the Chicago real estate market. If you're curious about your property's current market value, check out our What's My Chicago Home Worth? page.

Solar panels can certainly reduce utility bills and appeal to environmentally conscious buyers. However, they don't always translate into a higher sale price, and in some cases they can actually make a transaction more complicated.

Buyers Focus on the Home First

When buying a home in Chicago, most buyers pay attention to the things they'll use every day—a modern kitchen, updated bathrooms, hardwood floors, finished basement, or a well-maintained roof.

While lower electric bills are a nice bonus, they're rarely the deciding factor when comparing two similar homes. In my experience, buyers are generally willing to pay more for quality renovations than for an existing solar system.

Owned vs. Leased Solar Panels Matters

Not all solar panel systems are the same.

If the panels are owned outright, they typically transfer with the property like any other improvement.

However, many homeowners financed their solar installation or entered into a long-term lease. That can create additional hurdles during the home selling process.

Depending on the agreement, a buyer may need to:

• Assume the existing loan or lease.
• Qualify with the solar company.
• Accept monthly payments in addition to their new mortgage.
• Work through additional paperwork before closing.

Some buyers simply don't want another financial obligation, even if the monthly savings offset part of the cost.

If you're planning to move within the next 5 to 10 years, it's especially important to understand how a leased or financed solar system may impact your home's resale and the pool of potential buyers. Before signing any agreement, ask what happens if you decide to sell your home before the lease or loan is paid off.

Don't Assume Solar Panels Increase Value

You've probably heard claims that solar panels increase a home's value by 4% to 5%. While some studies have suggested solar may contribute to higher values under certain market conditions, there is no guarantee that every home will receive a premium.

Like any home improvement, value depends on several factors, including:

• The local housing market.
• Buyer demand.
• The age and condition of the system.
• Whether the panels are owned, financed, or leased.
• The overall condition of the home.

In many Chicagoland neighborhoods, buyers are still primarily purchasing the home itself—not the solar system. If you're planning to sell, it's important to understand how to price your home correctly so that features like solar panels are viewed as a benefit rather than an inflated expectation.

The Real Cost of a Leased Solar Panel System

We recently received an estimate for a leased solar panel system. Over the 25-year lease term, the total cost would exceed $63,000. Our current average electric bill is approximately $85 per month. Every homeowner's situation is different, but it's important to compare the total long-term cost of a solar lease against your current utility expenses before signing a contract.

Roof Condition Still Matters

Chicago weather presents challenges that homeowners in warmer climates don't always face.

If your home has solar panels, buyers should pay close attention to the roof's age and condition. A roof replacement becomes more expensive when solar panels must be removed and reinstalled.

For homes with flat roofs, it's also important to have the roof evaluated by a qualified professional. Snow loads, roof design, drainage, and the additional weight of a solar array should all be considered. While properly designed systems can perform well, buyers should verify that the roof was engineered and installed appropriately for local conditions. If you're purchasing a home, our home inspection tips for buyers can help you know what to look for during the inspection process.

Check Insurance Coverage

Another item that's often overlooked is homeowners insurance.

Coverage for solar panels can vary by insurance company and policy. Some insurers include them automatically, while others may require additional coverage or have specific underwriting requirements.

Before buying or selling a home with solar panels, it's worth confirming:

• Whether the system is fully insured.
• If additional endorsements are required.
• Whether the buyer's insurance carrier has any restrictions.

A quick conversation with an insurance agent before closing can help prevent surprises.

The Bottom Line

Solar panels can be a valuable feature for the right buyer, especially when the system is owned outright and properly maintained. But they shouldn't automatically be viewed as adding tens of thousands of dollars to a home's value.

If you're thinking about selling a home with solar panels, it's important to understand how the system is owned, whether any financing is involved, and how it may affect potential buyers.

Every property is different, and pricing a home correctly is still one of the biggest factors in achieving a successful sale.

If you're considering buying or selling a home in Chicago or the surrounding suburbs, I'd be happy to review your property's features—including solar panels—and provide an honest opinion of how they may impact today's market.

---