How to Calculate the Added Value of Solar When You Sell Your Home

When selling a home with solar panels in New Jersey, one of the most important questions is: How much is the solar system worth to a buyer today? The value is not simply what the system originally cost — it’s based on the remaining financial benefits the system will produce.

Important: Only owned solar systems increase home value. Leased or third-party owned systems do not, but they may reduce energy costs during the lease.

Most solar systems provide economic value, but ownership matters:

Owned/Purchased Systems:

1. • Energy Savings – Reduced electric bills over the remaining life of the system.
   • State Incentives – Remaining income from SRECs, TRECs, or SREC-II (ADI) payments, depending on the program the system qualified for.

Leased/PPA Systems:

1. • Energy Savings vs. Lease Costs – Savings are calculated as projected energy production minus total remaining lease or PPA payments.
   • No Incentive Value – SRECs and other state incentives belong to the third-party owner and do not increase the home's resale value.

To determine the added value of solar at resale:

• • For owned systems: Calculate the Net Present Value (NPV) of remaining incentive payments and projected future utility bill savings.
  • For leased systems: Calculate the NPV of projected energy savings minus remaining lease/PPA costs over the remainder of the system’s service life.

NPV adjusts future cash flows into today’s dollars using a reasonable discount rate. This gives buyers, sellers, appraisers, and real estate professionals a financially sound estimate of what the solar system is worth right now — not what it was worth when installed.

Because New Jersey solar programs vary by installation date and have different term lengths (10 or 15 years), and because electric rates continue to rise over time, an accurate valuation must account for:

• • The system’s Permission to Operate (PTO) date
  • The remaining years in the applicable incentive program (for owned systems)
  • Current SREC/TREC/ADI values (for owned systems)
  • Utility rate inflation
  • System degradation over time
  • Remaining lease or PPA costs (for leased systems)

Using these factors ensures that the solar system is valued based on its future income-producing potential for owned systems, or net financial impact for leased systems, which is what truly drives resale decisions in today’s market.