You Spent $30,000 on Solar Panels. How Much Value Did They Really Add to Your Maryland Home?

Home › Articles › Solar Panels and Maryland Home Value

I am Ed Drost, a Maryland State Certified Residential Appraiser (License #30004874), and solar is one of the most misunderstood line items I deal with. Homeowners call me after spending real money and expect a dollar-for-dollar bump. Sometimes they get a meaningful one. Sometimes they get none, and the reason is almost always the ownership structure, not the panels.

Here is the version I would tell you across my desk:

• Owned, no debt on the panels: the system can add real value. A reasonable expectation is some meaningful fraction of what you paid, not the full amount, and less every year as the equipment ages.
• Owned, with a solar loan: value is possible, but the lender may claim the panels as collateral, and that can cancel the value or stall the sale until the lien is paid off or subordinated.
• Leased or PPA: under Fannie Mae's rules I cannot include the panels in the appraised value. For the seller it can also be a liability. It can complicate the buyer's financing and the closing timeline.
• The federal tax credit: if your system was completed after December 31, 2025, the old 30% residential credit no longer applies, so a $30,000 system in 2026 does not net down to $21,000 on your tax return.

Why what you paid is not what it is worth

An appraisal answers one question: what would a typical buyer pay for this property, as it sits, on the effective date? It is not a receipt audit. Your $30,000 contract tells me what the installer charged. It does not tell me what the next buyer will give up in price for a roof full of panels.

Three things pull the contributory value below the sticker price:

1. Depreciation. Panels degrade slowly, inverters usually need replacing before the panels do, and a system loses remaining useful life every year. A five-year-old system is not worth what a new one costs.
2. Buyer payback logic. Buyers do not pay for kilowatts. They pay for the electric bills they will not have to pay. If the savings do not justify the premium, they will not pay it.
3. Incentives that were already paid. What you originally paid is only part of the story. What a buyer would pay to install the same system today, after the incentives available today, is the better yardstick for a replacement-cost view.

The federal credit has changed the math

A lot of older articles, including some of the research notes I see homeowners quote, assume a 30% federal tax credit. That assumption is now out of date for new installs. The residential clean energy credit (Section 25D) ended for expenditures made after December 31, 2025, under Public Law 119-21. In plain terms:

• If your system was installed and completed in 2025 or earlier, the credit may have applied to you, and any unused credit may carry forward. Talk to your tax preparer about your own return.
• If your system is installed in 2026 or later, there is no federal residential credit. A $30,000 system costs you $30,000 before any state or utility incentives, so "net $21,000" and "break-even in six to eight years" claims built on that credit no longer hold.

This cuts both ways for value. A higher out-of-pocket cost makes it harder to recoup the price at sale, and it changes what a buyer would pay to replace the system today. Leasing companies may still claim a separate commercial credit through 2027, and some say they pass part of that on in lower payments, which can make a lease look better to a buyer in the short term. I am not a tax professional, so treat all of this as background, not tax advice.

Maryland incentives that still matter

• Sales tax: Maryland exempts solar equipment from the state sales and use tax. Ask your installer how it showed up in your contract.
• Property tax: Under Md. Code, Tax-Property § 7-242, solar energy property is not subject to real property tax. That is why adding panels should not, by itself, raise your assessment. There is a cross-reference to § 8-240 in the statute, so confirm the specifics with your local assessment office.
• SRECs and net metering: Solar renewable energy credits are personal cash flow, not part of the real estate. Net metering rules in Maryland are changing, with the program scheduled to close to new customers on July 1, 2027. A buyer will want to know whether your system is grandfathered. Check the current status with your utility and the Maryland Public Service Commission.

What the research actually shows

Two studies get quoted constantly. Both are useful. Neither says what the headlines say.

Lawrence Berkeley National Laboratory ("Selling into the Sun"). LBNL studied more than 22,000 home sales, about 3,950 of them with owned photovoltaic systems, across eight states from 2002 to 2013. It found a premium of roughly $4 per watt of installed capacity for host-owned systems, which works out to about $15,000 for a typical 3.6 kW system. Three caveats matter for a Maryland homeowner today:

• It covered owned systems only. Leased systems were not part of the premium.
• The study period ended in 2013. Panel prices and buyer awareness have both changed since then.
• The premium shrank with age. Older systems sold for less per watt than newer ones, which tells me the market depreciates solar faster than a straight line.

Zillow. Zillow reported that homes with solar sold for about 4.1% more than comparable homes without it. That number is national, from a study of 2018–19 sales. It does not single out Maryland, and I would not put a Maryland-specific percentage on it. Percent-of-price studies also tend to reflect where solar is common and where electricity is expensive, which is not the same as the Baltimore suburbs.

What I would not promise you

You will see claims online that owned solar adds 45% to 65% of its cost, or exactly 3% to 4.5% of a Maryland home's value. I have not found a Maryland study that supports those specific figures. A range like that can be a fair rule of thumb in some neighborhoods and a fantasy in others. What I will say is this: the research supports the idea that owned solar often earns a positive adjustment, usually less than the full installed cost, and it is strongest where I can find local sales that prove it.

How I appraise solar panels in Maryland

I use the same approaches I use for any other feature, and I rely on the one the market gives me the best evidence for.

1. Paired sales (sales comparison)

This is the gold standard. I look for recent sales of similar homes nearby, with and without owned solar, and measure the price difference. The hard part is finding enough of them. In many Baltimore-area neighborhoods there are two or three owned-solar sales in a year, not a dozen. When I cannot isolate a matched pair, I do not invent an adjustment. I either support one another way or I make none, and I explain why in the report.

2. Income approach (the present value of energy savings)

When paired sales are thin, I can estimate what the system will save the next owner and discount that stream to a present value. The Appraisal Institute's Residential Green and Energy Efficient Addendum (Form 820.05) is the standard place to document the system, and PV valuation methods build on it. Two cautions. First, this approach is only as good as the production data, the electric rate, the remaining life and the discount rate I use. Second, the income method should not be the only leg the opinion stands on. It is a cross-check, not a substitute for market evidence.

3. Depreciated cost

I estimate what an equivalent system would cost to install today and subtract physical depreciation and functional obsolescence. Panels degrade gradually, and the inverter is usually the first major component to need replacement. A five-year-old system is not valued like a new one.

What helps me support the value

If you want an appraiser to give your system credit, put these in front of me at the inspection:

• The purchase and ownership documents: contract, proof of payment, and anything showing you own the system outright
• Twelve months of production data and your electric bills
• Warranty terms, including whether they transfer to a buyer
• The permit and interconnection approval, plus the system size and age
• A completed Form 820.05 if one is available
• Proof there is no UCC filing or lien against the panels, or the paperwork showing it was released

Without documentation, I may not be allowed to count the system, even if you own it. Fannie Mae's guidance says that when ownership is unclear, no value may be included unless the lender confirms through a UCC search that no outside lender claims the panels as collateral.

What is different about solar in Maryland

A few local factors help owned solar hold its value here:

• No added property tax for the panels. Section 7-242 of the Tax-Property Article says solar energy property is not subject to real property tax, so the system should not raise your bill by itself. The statute cross-references § 8-240, so confirm current treatment with your county assessment office. (Some write-ups say the exemption varies by county. I would verify before you rely on it.)
• Electric rates that make savings meaningful. The higher the rate you avoid, the more a buyer values the offset. I use the actual utility rate for the property (BGE, Pepco, Delmarva or a co-op), not a statewide average.
• A moving net-metering target. Maryland's net metering program is scheduled to close to new customers on July 1, 2027. Systems already enrolled should keep their status, but a buyer will ask, so have the interconnection paperwork ready.
• SRECs are yours, not the house's. Solar renewable energy credits generate cash for the owner. They are personal property, not real estate. If you want them to transfer to the buyer, say so in the contract. Otherwise assume they stay with you.
• Tax assessments and appeals. Solar does not change the rules for contesting a bad assessment. If you think your assessment is wrong for other reasons, my guide to Baltimore property tax assessment appeals walks through it.

Owned, financed, leased or PPA: why the structure decides everything

Same panels, same roof, very different outcomes. Here is how I and most lenders treat each structure.

Sources: Fannie Mae solar panel guidance and Freddie Mac Guide Section 5601.4. Individual lenders may add overlays, so always confirm with the buyer's loan officer.

A few details in that table are where deals get won or lost:

• Fannie Mae's rule on financed panels turns on repossession. If the panels are treated as personal property and the lender can take them back on default, I cannot give them value. If they are a fixture that cannot be repossessed on default, value may be considered.
• Freddie Mac's rule on lease and PPA payments is not a blanket "always counts against the buyer." Payments may be excluded from debt-to-income when the lease delivers a set amount of energy for a fixed payment with a production guarantee, or when a PPA payment is based only on the energy actually generated. When those conditions are not met, the payment counts. Solar loan payments generally do count.
• Missing paperwork is itself a problem. If ownership is unclear, the lender may need a UCC "personal property" search before any value can be included.

The pitfalls of selling a home with leased solar panels

A lease or PPA can be a fine deal for the person living in the house. The trouble starts when that person sells. In most sales the buyer simply takes over the lease at closing, and for many deals that goes smoothly. When it doesn't, these are the places it breaks.

1. The panels add $0 to the appraised value

Fannie Mae says the appraiser may not include the value of leased or PPA panels in the appraised value. I still describe the system and comment on marketability, but the panels do not lift the number. If you were hoping the roof would help your price, it won't.

2. The buyer's loan has to absorb the payment

A lease payment of roughly $75 to $250 a month is common, though yours may differ. Whether it counts against the buyer's debt-to-income ratio depends on the contract. Fannie Mae and Freddie Mac both allow the payment to be left out of DTI when the lease delivers a specific amount of energy for a fixed payment and carries a production guarantee that compensates the borrower if the panels underperform. If the payment floats, steps up, or has no guaranteed output, it counts as a recurring debt. If it counts and the buyer is already near the limit, a few hundred dollars a month can matter. Have the buyer's lender review the lease early.

3. Escalator clauses

Many leases and PPAs include an annual price increase. Reported contract escalators run from about 1% to 5% a year, with most large providers' contracts in the 2% to 3% range. Some leases have no escalator at all, so ask, and be wary of anything much above 3%. Early on, the payment can sit below your utility rate. Over a 20- to 25-year term, a compounding escalator, combined with panels that lose output over time (about 0.5% a year is a common assumption), can push the cost per kilowatt-hour past what the utility charges. Smart buyers and their agents will read the schedule and run the numbers. Read it yourself first.

4. UCC filings and closing delays

Solar companies commonly protect their equipment with a UCC-1 financing statement, sometimes recorded as a fixture filing in the land records. A buyer's lender wants first-lien position and may refuse to fund until the solar company delivers a subordination agreement or a UCC-3 termination. Industry guidance commonly puts that at two to six weeks, and longer if the lease was sold to a servicer or the installer went out of business. Solar company transfer desks do not run on a 30-day escrow clock, so I have seen it push past contract dates. Start the request 60 or more days before you list.

5. The solar company approves the buyer, too

Even when the buyer's mortgage is approved, the solar company runs its own credit check before it lets the lease transfer. Providers set their own standards. A minimum score around 650 is commonly reported, with some contracts asking for 680 to 700 or more. A buyer approved for an FHA loan, which can accept much lower scores, can still fail the solar company's test. Ask your provider for its criteria in writing.

6. The buyout and removal trap

If the buyer won't take the lease, you have three options, and none is free:

• Buy out the system. Your contract sets the formula, usually one of three: a printed schedule of dollar amounts by contract year, the net present value of the remaining payments, or fair market value. Early in the term the number can be far higher than people expect. Quotes of $15,000 to $35,000 or more are commonly reported, with the highest figures in years 1 to 5 and lower ones later. Get the real number in writing.
• Prepay the remaining lease. You pay the balance so the buyer gets the power with no payment, though the buyer still has to accept equipment on the roof.
• Remove the system. Expect early-termination fees, plus removal and roof repair costs, commonly reported in the range of a few thousand dollars. Roof penetrations and aging shingles can also come up at the home inspection.

Dollar figures in this section are commonly reported ranges, not guarantees. Your contract controls.

A checklist before you list or buy

If you are selling

1. Find out how you own it. Owned, financed, leased or PPA. Pull the contract.
2. If leased or financed, call the provider 60 to 90 days before listing. Ask for the written buyout figure, the transfer process, the credit criteria and the lien release or subordination steps.
3. Disclose it up front. Put the structure, remaining term, current payment and escalator in the listing remarks. A surprise during escrow is what kills deals.
4. If owned, build the packet: purchase contract, proof of payment, 12 months of production data, warranty transfer terms, permit and interconnection approval, and Form 820.05 if you have it. Hand it to the appraiser at the inspection.
5. Decide on SRECs. State in the contract whether they transfer.
6. Plan for a concession. In a buyer-leaning market, expect to be asked for a price reduction or a buyout at closing.

If you are buying

1. Ask whether the system is owned, financed, leased or PPA, and request the documents.
2. Have your lender review the lease or loan terms before you go under contract.
3. Check whether the net-metering status transfers to you.
4. Look at the roof and inverter age. Ask what the warranty covers and whether it transfers.
5. Run the numbers on the escalator, not just the first-year payment.

Common questions

Do solar panels increase home value in Maryland?

Owned panels often do, but usually by less than they cost, and the amount depends on local sales evidence, the system's age and size, and your electric rates. Leased and PPA panels do not add to the appraised value.

Will my appraiser add $30,000 for a $30,000 system?

Almost never. Cost is not value. An appraiser looks at what the market pays, adjusted for depreciation and the savings a buyer will realize.

Does the federal solar tax credit still apply?

Not for systems installed after December 31, 2025. The Section 25D residential credit ended for expenditures after that date. If your system was completed in 2025 or earlier, ask your tax preparer how it applies to you.

Will solar panels raise my Maryland property taxes?

The statute says solar energy property is not subject to real property tax (Tax-Property § 7-242), so the panels should not raise your bill by themselves. Confirm with your assessment office.

Can I sell a house with leased solar panels?

Yes. Most often the buyer takes over the lease at closing. It can slow a sale if the buyer's lender, the solar company's credit check or lien paperwork causes delays, so start early.

Does a solar lease hurt a buyer's mortgage approval?

It can. Whether the payment counts in the buyer's debt-to-income ratio depends on the contract terms and the loan program. Have the buyer's lender review it early.

What documents should I give the appraiser for owned solar?

Purchase contract and proof of ownership, 12 months of production and utility data, warranty terms, permits and interconnection approval, Form 820.05 if available, and proof there is no UCC lien on the panels.

Do SRECs transfer to the buyer?

Only if the contract says so. SRECs are personal property, not part of the real estate.

Sources

• Lawrence Berkeley National Laboratory, Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes
• Zillow Research, 2019 study on homes with solar panels (national)
• Fannie Mae, Selling Guide Announcement SEL-2020-04 (solar panels; B2-3-04 and B4-1.3-05)
• Fannie Mae, solar panel appraisal and underwriting guidance
• Freddie Mac Single-Family Seller/Servicer Guide, Section 5601.4 (solar)
• Appraisal Institute, Residential Green and Energy Efficient Addendum (Form 820.05)
• Md. Code, Tax-Property § 7-242 (solar energy property)
• Congressional Research Service and Public Law 119-21 on termination of the Section 25D credit
• EnergySage, Maryland solar incentives and net metering
• Solar.com, Selling a Home With Leased Solar Panels
• LHFS solar panel policy summarizing UCC-1 and DTI handling by ownership type
• Consumer Reports, Should You Lease or Buy Solar Panels?

This article is general information, not legal, tax or financial advice. Loan program rules and incentives change, so confirm current requirements with your lender, tax professional or attorney before you act.

More articles

Estate, Probate & Date-of-Death

What Is a Retrospective Appraisal?

A retrospective appraisal tells you what a property was worth on a past date. How it differs from a standard appraisal, when you need one, how far back it can go, and what it costs.

November 3, 2026 · 8 min read

Baltimore Property

Your Baltimore Property Tax Assessment Went Up. Here's How to Fight It Before You Overpay.

The 45-day SDAT deadline, which reassessment group you are in, what a $65,000 value correction is worth in the City vs. the County, and a 7-step appeal process.

October 31, 2026 · 10 min read

Appraisals & Lending

Still Paying Mortgage Insurance? Your Baltimore Home's Value Could Help You Eliminate PMI

Two ways to end PMI, the LTV math, and why your servicer, not a private appraisal, usually decides. Fannie Mae's 75% and 80% current-value tests explained.

October 30, 2026 · 10 min read

Related pages