Arizona has some of the best solar potential in the country, and solar panels have become a common sight on homes across the East Valley. But not every solar system affects a home’s value the same way. Whether the system is owned, financed, or leased changes how an appraiser treats it, how a buyer reacts to it, and how smoothly a sale goes.
With over 300 sunny days a year, Arizona ranks among the top states for installed solar capacity, so it is common to tour a home with panels already on the roof. The question that matters most for value is not whether a home has solar, but who owns it. Owned systems and leased systems are treated very differently by appraisers, lenders, and buyers, and understanding the difference can shape both a purchase decision and a listing strategy.
Owned Solar Panels: The Value Case
National data generally supports a premium for owned solar. Zillow’s widely cited analysis found that homes with owned solar sold for about 4.1 percent more on average than comparable homes without it, and a 2025 Lawrence Berkeley National Laboratory study of more than 23,000 home sales found a premium of roughly 4 dollars per installed watt in most markets, working out to about 24,000 to 32,000 dollars of added value on a typical 6 to 8 kilowatt system. In states with higher electricity rates, the premium has run even higher.
Appraisal guidelines back this up. Fannie Mae, Freddie Mac, and FHA guidance treat owned solar, or solar financed as a fixture to the property, as part of the real estate that can be included in the appraised value. Many appraisers now use the Appraisal Institute’s Residential Green and Energy Efficient Addendum to document a system’s specifications and assign it proper value, although not every appraiser has training in solar valuation, so it can help to request one with green or solar appraisal experience.
Ownership is the line that matters most. An owned system is treated as part of the real estate and can add measurable value at appraisal and resale. A leased system is treated as personal property, similar to a rented water heater, and typically adds little to nothing to the appraised value no matter how much it lowers a utility bill.
System size and age also affect the premium. A system that offsets 80 to 100 percent of a home’s electricity usage is generally more attractive to buyers and appraisers than one that offsets only 30 to 40 percent, and older systems nearing the end of their production life, or facing an aging inverter, carry less value than a newer installation.
Leased and PPA Solar: Why the Value Story Changes
Leased systems and power purchase agreements, often called PPAs, work differently. Under a lease or PPA, a solar company owns the equipment and the homeowner pays a monthly fee for the electricity it produces. Because the homeowner has no equity in the panels, Fannie Mae, Freddie Mac, and FHA guidelines require appraisers to exclude leased and PPA systems from the appraised value entirely.
Beyond the appraisal, a lease can complicate the sale itself. A buyer typically has to apply and qualify with the leasing company to take over the remaining payments, similar to a credit approval, and some leases include an annual escalator clause that raises the payment 1 to 3 percent each year. A leased system with a long remaining term and a high payment relative to utility savings can narrow the buyer pool and, according to industry data from SEIA and EnergySage, add roughly 15 to 30 days to the average time on market compared with a non-solar sale.
If you are planning to sell a home with leased solar, contact the leasing company early to understand the transfer process, the buyout cost, and the remaining term. Getting ahead of this paperwork before you list can prevent a surprise near closing, when a buyer’s financing or comfort level suddenly depends on a lease they have not fully reviewed.
Can be included in the appraised value under Fannie Mae, Freddie Mac, and FHA guidelines
Zillow data points to an average premium near 4.1 percent for owned systems
No monthly payment for the new buyer to assume
Financing as a fixture, rather than a personal property loan, supports inclusion in value
Excluded from appraised value under current lending guidelines
Buyer must qualify to assume the remaining lease or PPA payments
Some leases carry an annual payment escalator
Can add time to the sale and narrow the pool of interested buyers
Where Financed Solar and PACE Loans Fit In
Financed solar sits between the two categories described above, and the filing behind the loan is what decides how it is treated. If the panels are financed with a loan secured by the property, similar to a fixture, they can be considered part of the home’s value. If they are financed through a personal property loan with a UCC-1 filing against the equipment itself, they are treated the same as a lease and excluded from value. Before listing or buying a home with financed solar, confirm which type of filing applies and make sure any lien will be properly released or transferred at closing.
PACE-financed systems, which stands for Property Assessed Clean Energy, add another layer. These systems are technically owned, but the loan is repaid through property tax assessments and the obligation transfers with the property, which some buyers and lenders view negatively. Not all mortgage lenders are comfortable with an active PACE assessment, so confirm early whether a PACE lien exists on any home under consideration.
How APS and SRP Rates Shape the Arizona Picture
Arizona ended traditional retail net metering years ago, and both major East Valley utilities now use export-based billing that pays homeowners less for power sent to the grid than they pay to draw power from it. As of the 2025 to 2026 interconnection cycle, APS customers receive a Resource Comparison Proxy export credit of roughly 6 cents per kilowatt hour, locked in for 10 years from their interconnection date. SRP’s newer export plans, introduced after SRP retired legacy net metering for new customers in November 2025, pay roughly 3.45 cents per kilowatt hour for exported power.
| Utility | Export Rate | What It Means for Value |
|---|---|---|
| APS | ~6 cents per kWh, locked 10 years at interconnection | Self-consumption matters more than export income for system value |
| SRP | ~3.45 cents per kWh on newer export plans | Systems sized to a household’s own usage tend to perform better |
These lower export rates are one reason appraisers and buyers increasingly focus on how much of a home’s own electricity use a system offsets, rather than treating every kilowatt of solar production as equally valuable. A well-sized, owned system that covers most of a household’s usage remains a strong selling point in Arizona’s climate, while a system that was oversized for export income under the old net metering rules may add less value than its owner expects.
Arizona also still offers a 25 percent state income tax credit up to 1,000 dollars for a newly installed system, along with a sales tax exemption and a full property tax exemption on the added value from solar, though the federal residential Investment Tax Credit under Section 25D expired for owner-installed systems at the end of 2025. These remaining state incentives apply to owned systems, not leases, which is one more reason ownership tends to be the better long-term position where it fits a buyer’s budget.
What to Check Before You Buy or List a Home With Solar
- Ownership status. Ask whether the system is owned outright, financed, or leased, and request the original contract or loan documents.
- Lien and UCC filings. For owned or financed systems, confirm whether a UCC-1 filing exists and how it will be handled at closing.
- Remaining lease term and escalator. For leased systems, review the years remaining, the current payment, and whether an annual increase applies.
- Transfer or buyout options. Ask the solar provider about the process and cost to transfer a lease to a new buyer or to buy out the remaining term.
- System age and production. Ask for recent production data and the age of the panels and inverter, since older systems and aging inverters can affect both performance and value.
- Utility and rate plan. Confirm whether the home is served by APS, SRP, or another utility, and which rate plan the system is enrolled in.
Solar can be a genuine asset in an Arizona home sale, but only when the ownership picture is clear. Whether you are buying a home with panels already installed or considering a listing strategy for a home you already own, I would be glad to help you sort out what the solar situation means for your specific transaction.
Frequently Asked Questions
Do owned solar panels increase home value in Arizona?
Generally, yes. National data from Zillow points to an average premium of about 4.1 percent for homes with owned solar, and a 2025 Lawrence Berkeley National Laboratory study of more than 23,000 home sales found a premium of roughly 4 dollars per installed watt in most markets, which works out to about 24,000 to 32,000 dollars on a typical 6 to 8 kilowatt system. Arizona’s high sun exposure and electricity costs generally support this pattern, although the actual premium depends on system age, size, and the local market.
Do leased solar panels help or hurt home value?
Leased and power purchase agreement systems generally do not add appraised value, since Fannie Mae, Freddie Mac, and FHA guidelines treat them as personal property rather than part of the real estate. A lease is not automatically a negative, but it can complicate a sale, since the buyer typically has to qualify to take over the lease payments, and some appraisers note the lease as a marketability concern.
Can a buyer take over a solar lease when they buy a home in Arizona?
In most cases, yes, but the buyer must apply and qualify with the leasing company, similar to a credit approval. This step needs to happen early in the transaction, since a buyer who does not qualify, or who is uncomfortable with the remaining lease term and any payment escalator, can slow down or derail the sale.
How do APS and SRP solar export rates affect home value?
APS pays roughly 6 cents per kilowatt hour for exported solar power under its Resource Comparison Proxy rate, locked for 10 years from the interconnection date, while SRP’s newer export plans pay roughly 3.45 cents per kilowatt hour. Both rates are well below the retail rate homeowners pay for grid power, which is why appraisers and buyers increasingly focus on how much of a home’s own usage the system offsets rather than on export income alone.
What should I check before buying an Arizona home with solar panels?
Confirm whether the system is owned, financed, or leased, and ask for the original contract. For owned or financed systems, check for any UCC-1 filing or lien and confirm it will be released or transferred properly at closing. For leased systems or PPAs, review the remaining term, the monthly payment, and any annual escalator, and start the lease transfer application as early as possible in the transaction.
Should I buy out my solar lease before selling my Arizona home?
It depends on the buyout cost compared to the impact on your sale. A leased system can narrow your buyer pool and slow down a transaction, so paying it off before listing can simplify the sale and remove a common objection, though it will not necessarily add the same premium that an originally owned system would. Comparing the buyout cost against likely time savings and negotiating leverage is the best way to decide.
Buying or selling a home with solar panels in the East Valley? I can help you sort through the ownership details and understand what they mean for your transaction.